UNIVERSITY 

OF  CALIFORNIA 

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SCHOOL  OF  LAW 
LIBRARY 


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s 


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CASES 

ON 

PRINCIPAL  AND  AGENT 


SELECTED  FROM  DECISIONS  OF 


ENGLISH  AND  AMERICAN  COURTS 


BY 

EDWIN  C.  GODDARD,  Ph.B.,  LL.  B. 

PROFESSOR  OF  LAW  IN  THE  UNIVERSITY  OF 
MICHIGAN 


AMERICAN  CASEBOOK  SERIES 
JAMES  BROWN  SCOTT 

GENERAL  EDITOR 


ST.    PAUL 

WEST  PUBLISHING  COMPANY 
1914 


T 


COPYBIGHT,     1914 
BT 

WEST  PUBLISHING  COMPANT 
(Godd.Pb,&  a.) 


5 


THE  AMERICAN  CASEBOOK 
SERIES 


For  years  past  the  science  of  law  has  been  taught  by  lectures,  the 
use  of  text-books  and  more  recently  by  the  detailed  study,  in  the 
class-room,  of  selected  cases. 

Each  method  has  its  advocates,  but  it  is  generally  agreed  that  the 
lecture  system  should  be  discarded  because  in  it  the  lecturer  does 
the  work  and  the  student  is  either  a  willing  receptacle  or  offers  a 
passive  resistance.  It  is  not  too  much  to  say  that  the  lecture  system 
is  doomed. 

Instruction  by  the  means  of  text-books  as  a  supplement  or  sub- 
stitute for  the  formal  lecture  has  made  its  formal  entry  into  the  educa- 
tional world  and  obtains  widely ;  but  the  system  is  faulty  and  must  pass 
away  as  the  exclusive  means  of  studying  and  teaching  law.  It  is  an 
improvement  on  the  formal  lecture  in  that  the  student  works,  but  if  it 
cannot  be  said  that  he  works  to  no  purpose,  it  is  a  fact  that  he  works 
from  the  wrong  end.  The  rule  Is  learned  without  the  reason,  or  both 
rule  and  reason  are  stated  in  the  abstract  as  the  resultant  rather  than 
as  the  process.  If  we  forget  the  rule  we  cannot  solve  the  problem;  if 
we  have  learned  to  solve  the  problem  it  is  a  simple  matter  to  formulate 
a  rule  of  our  own.  The  text-book  method  may  strengthen  the  mem- 
ory; it  may  not  train  the  mind,  nor  does  it  necessarily  strengthen  it. 
A  text,  if  it  be  short,  is  at  best  a  summary,  and  a  summary  presup- 
poses previous  knowledge. 

If,  however,  law  be  considered  as  a  science  rather  than  a  collection 
of  arbitrary  rules  and  regulations,  it  follows  that  it  should  be  studied 
as  a  science.  Thus  to  state  the  problem  is  to  solve  it ;  the  laboratory 
method  has  displaced  the  lecture,  and  the  text  yields  to  the  actual 
experiment.  The  law  reports  are  in  more  senses  than  one  books  of 
experiments,  and,  by  studying  tlie  actual  case,  the  student  co-operates 
with  the  judge  and  works  out  the  conclusion  however  complicated 
the  facts  or  the  principles  involved.  A  study  of  cases  arranged  his- 
torically develops  the  knowledge  of  the  law,  and  each  case  is  seen  to 
be  not  an  isolated  fact  but  a  necessary  link  in  the  chain  of  develop- 
ment. The  study  of  the  case  is  clearly  the  most  practical  method, 
for  the  student  already  does  in  his  undergraduate  days  what  he  must 
do  all  his  life;  it  is  curiously  the  most  theoretical  and  the  most  prac- 
tical. For  a  discussion  of  the  case  in  all  its  parts  develops  analysis, 
the  comparison  of   many  cases  establishes  a  general  principle,  and 

(iii) 


IV  PREFACE 

the  arrangement  and  classification  of  principles  dealing  with  a  sub- 
ject make  the  law  on  that  subject. 

In  this  way  training  and  knowledge,  the  means  and  the  end  of 
legal  study,  go  hand  and  hand. 

The  obvious  advantages  of  the  study  of  law  by  means  of  selected 
cases  make  its  universal  adoption  a  mere  question  of  time. 

The  only  serious  objections  made  to  the  case  method  are  that  it  takes 
too  much  time  to  give  a  student  the  requisite  knowledge  of  the  sub- 
ject in  this  way  and  that  the  system  loses  sight  of  the  difference  be- 
tween the  preparation  of  the  student  and  the  lifelong  training  of  the 
lawyer.  Many  collections  of  cases  seem  open  to  these  objections, 
for  they  are  so  bulky  that  it  is  impossible  to  cover  a  particular  sub- 
ject with  them  in  the  time  ordinarily  allotted  to  it  in  the  class.  In 
this  way  the  student  discusses  only  a  part  of  a  subject.  His  knowl- 
edge is  thorough  as  far  as  it  goes,  but  it  is  incomplete  and  frag- 
mentary. The  knowledge  of  the  subject  as  a  whole  is  deliberately 
sacrificed  to  training  in  a  part  of  the  subject. 

It  would  seem  axiomatic  that  the  size  of  the  casebook  should  cor- 
respond in  general  to  the  amount  of  time  at  the  disposal  of  instructor 
and  student.  As  the  time  element  is,  in  most  cases,  a  nonexpansive 
quantity,  it  necessarily  follows  that,  if  only  a  half  to  two-thirds  of  the 
cases  in  the  present  collections  can  be  discussed  in  class,  the  pres- 
ent casebooks  are  a  third  to  a  half  too  long.  From  a  purely  practical 
and  economic  standpoint  it  is  a  mistake  to  ask  students  to  pay  for 
1,200  pages  when  they  can  only  use  600,  and  it  must  be  remembered 
that  in  many  schools,  and  with  many  students  in  all  schools,  the  mat- 
ter of  the  cost  of  casebooks  is  important.  Therefore,  for  purely 
practical  reasons,  it  is  believed  that  there  is  a  demand  for  casebooks 
physically  adapted  and  intended  for  use  as  a  whole  in  the  class-room. 

But  aside  from  this,  as  has  been  said,  the  existing  plan  sacrifices 
knowledge  to  training.  It  is  not  denied  that  training  is  important, 
nor  that  for  a  law  student,  considering  the  small  amount  of  actual 
knowledge  the  school  can  hope  to  give  him  in  comparison  with  the 
vast  and  daily  growing  body  of  the  law,  it  is  more  important  than 
mere  knowledge.  It  is,  however,  confidently  asserted  that  knowledge 
is,  after  all,  not  unimportant,  and  that,  in  the  inevitable  compromise 
between  training  and  knowledge,  the  present  casebooks  not  only  de- 
vote too  little  attention  relatively  to  the  inculcation  of  knowledge, 
but  that  they  sacrifice  unnecessarily  knowledge  to  training.  It  is  be- 
lieved that  a  greater  effort  should  be  made  to  cover  the  general  prin- 
ciples of  a  given  subject  in  the  time  allotted,  even  at  the  expense  of 
a  considerable  sacrifice  of  detail.  But  in  this  proposed  readjustment 
of  the  means  to  the  end,  the  fundamental  fact  cannot  be  overlooked 
that  law  is  a  developing  science  and  that  its  present  can  only  be  un- 
derstood through  the  medium  of  its  past.  It  is  recognized  as  im- 
perative that  a  sufficient  number  of  cases  be  given  under  each  topic 


PREFACE  * 

treated  to  afford  a  basis  for  comparison  and  discrimination ;  to  show 
the  development  of  the  law  of  the  particular  topic  under  discussion; 
and  to  afford  the  mental  training  for  which  the  case  system  neces- 
sarily stands.  To  take  a  famiHar  illustration:  If  it  is  proposed  to 
include  in  a  casebook  on  Criminal  Law  one  case  on  abortion,  one  on 
libel,  two  on  perjury,  one  on  larceny  from  an  office,  and  if  in  order  to 
do  this  it  is  necessary  to  limit  the  number  of  cases  on  specific  intent  to 
such  a  degree  as  to  leave  too  few  on  this  topic  to  develop  it  fully 
and  to  furnish  the  student  with  training,  then  the  subjects  of  abor- 
tion, libel,  perjury,  and  larceny  from  an  office  should  be  wholly  omit- 
ted. The  student  must  needs  acquire  an  adequate  knowledge  of  these 
subjects,  but  the  training  already  had  in  the  underlying  principles  of 
criminal  law  will  render  the  acquisition  of  this  knowledge  compara- 
tivelv  easy.  The  exercise  of  a  wise  discretion  would  treat  fundamen- 
tals thoroughly;    principle  should  not  yield  to  detail. 

Impressed  by  the  excellence  of  the  case  system  as  a  means  of  legal 
education,  but  convinced  that  no  satisfactory  adjustment  of  the  con- 
flict between  training  and  knowledge  under  existing  time  restrictions 
has  yet  been  found,  the  General  Editor  takes  pleasure  in  announcing 
a  series  of  scholarly  casebooks,  prepared  with  special  reference  to 
the  needs  and  limitations  of  the  class-room,  on  the  fundamental  sub- 
jects of  legal  education,  which,  through  a  judicious  rearrangement 
of  emphasis,  shall  provide  adequate  training  combined  with  a  thor- 
ough knowledge  of  the  general  principles  of  the  subject.  The  collec- 
tion will  develop  the  law  historically  and  scientifically;  English  cases 
will  give  the  origin  and  development  of  the  law  in  England;  Ameri- 
can cases  will  trace  its  expansion  and  modification  in  America;  notes 
and  annotations  will  suggest  phases  omitted  in  the  printed  case. 
Cumulative  references  will  be  avoided,  for  the  footnote  may  not  hope 
to  rival  the  digest. 

The  law  will  thus  be  presented  as  an  organic  growth,  and  the  neces- 
sary connection  between  the  past  and  the  present  will  be  obvious. 

The  importance  and  difficulty  of  the  subject  as  well  as  the  time  that 
can  properly  be  devoted  to  it  will  be  carefully  considered  so  that  each 
book  may  be  completed  within  the  time  allotted  to  the  particular  sub- 
ject. 

It  is  equally  obvious  that  some  subjects  are  treated  at  too  great 
length,  and  that  a  less  important  subject  demands  briefer  treatment. 
A  small  book  for  a  small  subject. 

In  this  way  it  will  be  alike  possible  for  teacher  and  class  to  com- 
plete each  book  instead  of  skimming  it  or  neglecting  whole  sections; 
and  more  subjects  may  be  elected  by  the  student  if  presented  in  short- 
er form  based  upon  the  relative  importance  of  the  subject  and  the 
time  allotted  to  its  mastery. 

Training  and  knowledge  go  hand  in  hand,  and  Training  and  Knowl- 
edge are  the  keynotes  of  the  series. 


VI  PREFACE 

If  it  be  granted  that  all,  or  nearly  all,  the  studies  required  for  ad- 
mission to  the  bar  should  be  studied  in  course  by  every  student — and 
the  soundness  of  this  contention  can  hardly  be  seriously  doubted — it 
follows  necessarily  that  the  preparation  and  publication  of  collections 
of  cases  exactly  adapted  to  the  purpose  would  be  a  genuine  and  by 
no  means  unimportant  service  to  the  cause  of  legal  education.  And 
this  result  can  best  be  obtained  by  the  preparation  of  a  systematic 
series  of  casebooks  constructed  upon  a  uniform  plan  under  the  super- 
vision of  an  editor  in  chief. 

For  the  basis  of  calculation  the  hour  has  been  taken  as  the  unit.  The 
General  Editor's  personal  experience,  supplemented  by  the  experience 
of  others  in  the  class-room,  leads  to  the  belief  that  approximately  a 
book  of  400  pages  may  be  covered  by  the  average  student  in  half  a 
year  of  two  hours  a  week;  that  a  book  of  600  pages  may  be  discussed 
in  class  in  three  hours  for  half  a  year;  that  a  book  of  800  pages  may 
be  completed  by  the  student  in  two  hours  a  week  throughout  the  year ; 
and  a  class  may  reasonably  hope  to  master  a  volume  of  1,000  pages 
in  a  year  of  three  hours  a  week.  The  general  rule  will  be  subject  to 
some  modifications  in  connection  with  particular  topics  on  due  con- 
sideration of  their  relative  importance  and  difficulty,  and  the  time 
ordinarily  allotted  to  them  in  the  law  school  curriculum. 

The  following  subjects  are  deemed  essential  in  that  a  knowledge  of 
them  (with  the  exception  of  International  Law  and  General  Juris- 
prudence) is  universally  required  for  admission  to  the  bar: 


Administrative  Law. 

Insurance. 

Agency. 

International  Law. 

Bills  and  Notes. 

Jurisprudence. 

Carriers. 

Mortgages. 

Contracts. 

Partnership. 

Corporations. 

Personal  Property,  including 

Constitutional  Law. 

the  Law  of  Bailment, 

Criminal  Law. 
Criminal  Procedure. 

Real  Property.  \  2(i     ^"  ' 
■^     I  3d 

Common-Law  Pleading. 

Public  Corporations. 

Conflict  of  Laws. 

Quasi  Contracts. 

Code  Pleading. 

Sales. 

Damages. 

Suretyship. 

Domestic  Relations. 

Torts. 

Equity. 

Trusts. 

Equity  Pleading. 

Wills  and  Administration. 

Evidence. 

International  Law  is  included  in  the  list  of  essentials  from  its  in- 
trinsic importance  in  our  system  of  law.  As  its  principles  are  simple 
in  comparison  with  municipal  law,  as  their  application  is  less  technical, 


PREFACE  Vll 

and  as  the  cases  are  generally  interesting,  it  is  thought  that  the  book 
may  be  larger  than  otherwise  would  be  the  case. 

As  an  introduction  to  the  series  a  book  of  Selections  on  General 
Jurisprudence  of  about  500  pages  is  deemed  essential  to  completeness. 

The  preparation  of  the  casebooks  has  been  intrusted  to  experienced 
and  well-known  teachers  of  the  various  subjects  included,  so  that  the 
experience  of  the  class-room  and  the  needs  of  the  students  will  fur- 
nish a  sound  basis  of  selection. 

While  a  further  list  is  contemplated  of  usual  but  relatively  less  im- 
portant subjects  as  tested  by  the  requirements  for  admission  to  the 
bar,  no  announcement  of  them  is  made  at  present. 

The  following  gentlemen  of  standing  and  repute  in  the  profession 
have  written  or  are  at  present  actively  engaged  in  the  preparation  of 
the  various  casebooks  on  the  indicated  subjects: 

George  W.  Kirchwey,  Professor  of  Law,  Columbia  University,  School 
of  Law.     Subject,  Real  Property. 

Nathan  Abbott,  Professor  of  Law,  Columbia  University.  (Formerly 
Dean  of  the  Stanford  University  Law  School.)  Subject,  Per- 
sonal Property. 

Frank  Irvine,  Dean  of  the  Cornell  University  School  of  Law.  Sub- 
ject, Evidence. 

Harry  S.  Richards,  Dean  of  the  University  of  Wisconsin  School  of 
Law.    Subject,  Corporations. 

James  Parker  Hall,  Dean  of  the  University  of  Chicago  School  of  Law. 
Subject,  Constitutional  Law. 

William  R.  Vance,  Dean  of  the  University  of  Minnesota  Law  School. 
Subject,  Insurance. 

Charles  M.  Hepburn,  Professor  of  Law,  University  of  Indiana,  ^'w^- 
ject,  Torts. 

William  E.  Mikell,  Professor  of  Law,  University  of  Pennsylvania. 
Subjects,  Criminal  Lazv  and  Criminal  Procedure. 

George  P.  Costigan,  Jr.,  Professor  of  Law,  Northwestern  University 
Law  School.    Subject,  Wills  and  Administration. 

Floyd  R.  Mechem,  Professor  of  Law,  Chicago  University.  Subject, 
Damages.     (Co-author  with  Barry  Gilbert.) 

Barry  Gilbert,  Professor  of  Law,  University  of  Iowa.  Subject, 
Damages.     (Co-author  with  Floyd  R.  Mechem.) 

Thaddeus  D.  Kenneson,  Professor  of  Law,  University  of  New  York. 
Subject,  Trusts. 

Charles  Thaddeus  Terry,  Professor  of  Law,  Columbia  University. 
Subject,  Contracts. 


VIU  PREFACE 

Albert  M.  Kales,  Professor  of  Law,  Northwestern  University.  Sub- 
ject, Persons. 

Edwin  C.  Goddard,  Professor  of  Law,  University  of  Michigan.  Sub- 
ject, Agency. 

Howard  L.  Smith,  Professor  of  Law,  University  of  Wisconsin.  Sub- 
ject, Bills  and  Notes.     (Co-author  with  Wm.  Underhill  Moore.) 

Wm.  Underhill  Moore,  Professor  of  Law,  University  of  Wisconsin. 
Subject,  Bills  and  Notes.    (Co-author  with  Howard  L.  Smith.) 

Edward  S.  Thurston,  Professor  of  Law,  University  of  Minnesota. 
Subject,  Quasi  Contracts. 

Crawford  D.  Hening,  Professor  of  Law,  University  of  Pennsylvania. 
Subject,  Suretyship. 

Clarke  B.  Whittier,  Professor  of  Law,  University  of  Chicago.  Sub- 
ject, Pleading. 

Eugene  A.  Gilmore,  Professor  of  Law,  University  of  Wisconsin. 
Subject,  Partnership. 

Ernst  Freund,  Professor  of  Law,  University  of  Chicago.  Subject, 
Administratize  Lazv. 

Frederick  Green,  Professor  of  Law,  University  of  Illinois.  Subject, 
Carriers. 

Ernest   G.   Lorenzen,    Professor   of   Law,  University   of   Wisconsin. 

Subject,  Conilict  of  Laws. 

Frederic  C.  Woodward,  Dean  of  the  Stanford  University  Law  School. 
Subject,  Sales. 

George  H.  Boke,  Professor  of  Law,  University  of  California.  Sub- 
ject, Equity. 

James  Brown  Scott,  Lecturer  on  International  Law  and  Diplomacy  in 
Johns  Hopkins  University;  formerly  Professor  of  Law,  Colum- 
bia University.  Subjects,  International  Lazv;  General  Jurispru- 
dence. 

James  Brown  Scott, 
Washington,  D.  C,  October,  1913.  General  Editor. 


Following  are  the  books  of  the  Series  now  published,  or  in  press: 

Administrative   Law  Damages 

Aseucy  Partnership 

Bills  and  Notes  Persona 

Carriers  Pleading 

Conflict  of  Laws  Sales 

Constitutional  Law  Suretyship 

Corporations  Trusts 

Criminal  Law  Wills  and  AdmlnistratioQ 

Criminal  Procedure 


AUTHOR'S   PREFATORY  NOTE 


It  is  a  striking  proof  of  the  fact  that  Agency  is  a  modern  subject  in 
the  law  that  Blackstone,  in  his  Commentaries  on  the  Laws  of  England, 
does  not  mention  the  subject  by  name,  and  barely  makes  a  four-line 
reference  to  one  sort  of  agent  in  his  classification  of  servants.  The 
old  cases  do,  of  course,  sometimes  deal  with  pure  agency  questions, 
but  the  agent  is  usually  referred  to  as  a  servant  or  a  factor,  and  the 
questions  in  issue  are  generally  settled  upon  some  principle  of  the  law 
of  Master  and  Servant.  Agency  is  essentially  a  business'  relation; 
hence  its  modernness,  if  that  term  may  be  permitted ;  hence,  also,  the 
singular  fact  that  until  within  very  few  years  courts  treated  it  as  a 
broadened  service,  involving  wider  discretion,  and  failed  to  see  that 
its  main  difference  from  service  is  that  it  deals  with  a  relation  for  a 
very  dififerent  purpose — in  other  words,  that  the  difference  is  in  kind 
even  more  than  in  degree. 

To  an  extent  the  law  of  Principal  and  Agent  is  an  outgrowth  of  the 
law  of  Master  and  Servant.  The  doctrine  of  respondeat  superior  is 
most  active  in  both.  The  old  cases  of  Master  and  Servant  are  there- 
fore in  one  portion  of  the  field  of  Agency  valuable  and  illuminating, 
and  are  equally  valuable  to  illustrate  either  relation;  but  they  deal  to 
a  considerable  extent  with  questions  of  tort  liability  as  to  third  per- 
sons, and  of  contract  and  tort  between  the  primary  parties  to  the  rela- 
tion, and  these  are  far  from  being  the  most  important  parts  of  the 
law  of  Agency.  A  casebook  on  Agency,  then,  if  it  is  well  propor- 
tioned, will  be  made  up  of  modern  cases  far  more  than  will  a  work 
on  Property,  for  example,  or  on  Contracts  in  general.  The  present 
work  contains  many  early  cases  of  historical  importance,  some  involv- 
ing Agency,  but  more  turning  on  questions  arising  out  of  the  relation 
of  Master  and  Servant.  Very  largely,  however,  selections  have  been 
made  from  modern  cases,  in  which  the  courts  are  dealing  with  real 
agency  matters. 

No  one  has  stated  more  clearly  and  aptly  than  the  learned  Chief 
Justice  Shaw,  in  the  Norway  Plains  case,  the  great  merits  and  ad- 
vantages of  the  common  law,  that  instead  of  a  series  of  detailed  prac- 
tical rules  adapted  to  precise  circumstances,  which  would  become  ob- 
solete when  conditions  change,  it  consists  of  a  few  broad,  compre- 
hensive principles,  founded  on  reason,  natural  justice,  and  enlightened 
public  policy,  which  by  usage,  custom,  and  still  more  by  judicial  ex- 
position, are  adapted  to  new  practices  and  new  combinations  of  fact,  as 
conditions  change  and  a  new  practice  or  a  new  course  of  business  arises ; 
so  that  in  this  new  field,  without  the  aid  of  legislation,  the  principles  and 

(ix) 


X  author's  prefatory  note 

rules  soon  become  precise  and  established,  by  a  development  from  cases 
most  nearly  analogous,  modified  and  adapted  tO'  the  new  circumstances. 
By  such  a  process  as  this  has  the  law  of  this  modern  subject  of  Agency 
taken,  and  modified  and  amplified,  ancient  rules  in  cases  most  nearly 
analogous,  until  we  have,  largely  without  the  aid  of  statutes,  the  great 
body  of  law  in  this  business  relation,  the  development  of  which  was 
essential  to  the  growth  of  the  modern  commercial  world,  in  which  the 
maxim  "Qui  facit  per  alium  facit  per  se"  enables  one  man  to  be  at  the 
same  moment  in  as  many  places,  and  as  widely  apart,  as  the  extent  of 
his  resources  and  the  character  of  his  ability  permiit  him  to  secure 
and  maintain  agencies.  Whatever  the  relation  between  the  present 
idea  of  Agency,  and  the  old  conception  of  the  incidents  attaching  to 
the  relation  of  Master  and  Servant,  we  cannot  understandingly  and 
correctly  deal  with  the  questions  of  Agency  without  recognizing,  on 
the  one  hand,  that  it  evolved  from  the  law  of  Master  and  Servant,  and 
has  not  become  entirely  severed  from  it,  and,  on  the  other,  that  in  its 
most  important  fields  it  has  developed  a  great  body  of  law  quite  apart 
from  its  ancestral  subject,  because  it  is,  as  the  other  is  not,  essentially 
a  business  subject,  developed  in  response  to  the  demands  of  our  mod- 
ern commercial  world.  -^  ^   ^ 

Edwin  C.  Goddard. 

Ann  Arbor,  November  1,  1913. 


TABLE  OF  CONTENTS 


PART  I 

The;  Relation 

CHAPTER  I 

Page 

Definition  and  Nature  of  the  Relation 1 

CHAPTER  II 

The  Parties  to  the  Relation 
Section 

1.  Who  may  Act  as  Principal 22 

2.  Wlio  may  Act  as  Agent 31 

CHAPTER  III 

The  Purposes  of  the  Relation 

1.  In  General 33 

2.  Exceptions   35 

CHAPTER  IV 

Creation   of  the   Relation 

1.  In  General 47 

2.  Implied  Agency 51 

3.  By  Estoppel 57 

4.  Express  Authority 59 

I.  In  General — Written  Power 59 

II.  Power  of  Attorney  Under  Seal 63 

(A)     In  General 63 

(B)     Power  to  Fill  Blanks  in  a  Deed 65 

(C)  Statutes  Abolishing  Sealed  Requirements 68 

(D)  Deeds  as  Equitable  Contracts  to  Convey 70 

(E)  Signature  in  the  Principal's  Presence 71 

5.  Ratification 72 

I.     Definition  72 

II.  The  Act  Ratified 7S 

III.  The  Essentials  of  Ratification S5 

(A)  Agent  Act  as  Agent 85 

(B)  Existence  of  I'rincipal 90 

(C)  Act  Done  for  the  Principal 0:5 

(D)  Who  may  Ratify 05 

(E)  Knowledge  of  Facts 101 

(F)  Ratification  in  Part lis 

(G)  New    Consideration V2~t 

(H)     Necessity  of  Intent 126 

Godd.Pb.&  a.  (xi) 


Xll  TABLE    OP    CONTENTS 

Page 

lY.    Manner  of  Ratification 129 

(A)  In  General 129 

(B)  Written  Ratification 132 

(C)  Ratification  under  Seal 134 

(D)  Implied  Ratification 137 

(a)  In  General 137 

(b)  Accepting   Benefits 145 

(c)  By  Silence 155 

(d)  By  Enforcing  the  Contract  or  Bringing  Suit. . . .  165 

(e)  Limitations   170 

y.     Effect  of  Ratification 172 

(A)  Retroactiveness   172 

(B)  Revocability   183 

(C)  Ratification  as  to  Agent 186 

(D)  As  to  the  Principal 195 

(E)  As  to  Tliird  Person 201 


CHAPTER  V 

Teriiination  of  the  Relation 
Section 

1.  By  Act  of  the  Parties 207 

I.     By  Accomplishment  of  the  Purpose 207 

II.  Revocation  by  the  Principal 210 

(A)  In    General 210 

(B)  Power  Given  for  a  Consideration,  or  as  Security 216 

(C)  Power  Coupled  with  an  Interest 218 

(D)  Power  to  Revoke  and  Right  to  Revoke 227 

(E)  Specific  Performance  of  the  Agency 238 

(F)  Recovery  of  Damages  by  the  Agent 239 

(G)  Manner  of  Revocation 243 

(H)     Notice  of  the  Revocation 253 

III.  Abandonment  by  the  Agent 260 

(A)  Power  to  Renounce 260 

(B)  Remedies  for  Abandonment  by  the  Agent 267 

2.  By  Operation  of  Law 274 

I.     In  General 274 

II.     By  Death 274 

III.     By  Insanity,  Bankruptcy,  Etc 282 

3.  Effect  of  Termination 285 


PART  II 

The;  Authority 

CHAPTER  I 

Natuke  and  Extent 

1.  In  General 286 

2.  Authority  and  Instructions 300 

I.  In   General 300 

II.  Secret    Instructions 303 

III.  Known  Limitations 304 

IV.  Usage  and  Custom 310 


TABLE    OF    CONTENTS  ^Ull 

Page 
Section  oig 

3.  Apparent  Authority ^^^ 

I.  In  General ^ 

II.  Limitations    ' 

4.  Express  and  Implied  Authority ;^*^^ 

5.  General  and  Special  Authority ;^_- 

6.  Authority  for  Particular  Purposes ^J;^- 

I.  To  Buy :^^; 

II.  To  Sell  Personal  Property '^^~ 

(A)  In  General ;^:^- 

(B)  To  Make  Warranties 3^0 

(C)  To  Fix  Terms p"^ 

(D)  To   Collect 'f'^ 

(E)  To  Rescind ^^4 

III.  To  Sell  Real  Estate ;^^° 

(A)  In  General ^^^ 

(B)  To  Convey  and  AVarrant 40d 

(C)  To  Collect f^^ 

(D)  To  Fix  or  Modify  the  Terms 411 

IV.  To   Collect ■^J^ 

(A)  In    General ^j^ 

(B)  Implied  from  Possession  of  Notes  or  Securities 415 

(C)  What  Received  in  Payment 426 

(D)  To  Modify  Terms  of  Payment 431 

y.     To  Give  or  Receive  Negotiable  Paper 433 

(A)  In  General 433 

(B)  Limitations ^"^^ 


CHAPTER  II 

440 


CONSTEUCTION  OF  THE  AUTHOBITY 


CHAPTER  III 

Execution  of  the  Altiiority 

1.  In  General ^? 

2.  Sealed    Instruments J^t 

3.  Simple  Contracts ^oo 

4.  Negotiable  Instruments 4bU 

5.  Parol  Evidence  to  Explain 4()4 

6.  Effect  of  Various  Forms  of  Execution 477 


CHAPTER  IV 

Delegation  of  the  Autiiokity 

.  483 

1.  General  Rule .or, 

„,,  ..  'too 

2.  Exceptions  ^^o 

3.  Effect  of  Delegation "^ 


XIT  TABLE    OF    CONTENTS 

PART    III 

Efi*'i;ct  and  Consequences  of  the  Relation 
chapter  i 

Duties  and  Liabilities  of  the  Agent  to  his  Principal 

bection  Page 

1.  Loyalty  506 

I.     In  General 506 

IL     Agent  Act  for  More  Than  One 513 

m.     Adverse  Interests  of  the  Agent 520 

(A)  Personal   Profit 520 

(B)  Dealings  with  the  Principal 526 

2.  Obedience    546 

3.  Exercise  of  Care  and  Skill 561 

4.  Accounting 569 

I.     General  Duty 569 

II.     Title  as  Between  Principal  and  Agent 578 

(A)  In   General 578 

(B)  Illegality  as  a  Defense 581 

(C)  Jus  Tertii 585 

ni.     Commingling  of  Funds  or  Property 587 

rv.     Mode  of  Remittance 594 

T,     Form  of  Liability 594 

VI.    Necessity  of  Notice  and  Demand 597 

CHAPTER  II 

Duties  and  Liabilities  of  Principal  to  Agent 

1.  Compensation  to  the  Agent 605 

I.  General   Rule 605 

II.  When  the  Agent  Abandons  the  Agency 615 

ni.     When  the  Agent  is  Discharged 619 

IV.     Commissions  to  the  Agent 629 

2.  Reimbursement  and  Indemnity 637 

3.  The  Agent's  Lien 646 

CHAPTER  III 
Liability  of  the  Agent  to  the  Third  Person 

1.  In  Contract 650 

I.  General    Rule 650 

II.  Unauthorized  Contracts 653 

III.  On  What  Contract  Liable 657 

IV.  Non-Existent   Principal 665 

V.  Principal   Undisclosed 670 

VI.     For  Money  Paid  by  Mistake,  Fraud,  Etc 678 

2.  In  Tort 691 

CHAPTER  IV 

Liability  of  Third  Persons  to  the  Agent 

1.  In  Contract 701 

2.  In   Tort 719 


TABLE    OF    CONTENTS  >tv 

CHAPTER  V 

Liability   of   Principal  to   Third   Person  p 

Section  \^,J^ 

1.  For  the  Agent's  Contracts J}^^ 

I.     Disclosed  Principal J-^ 

II.     Undisclosed    Principal P^ 

(A)  Simple   Contracts '^^^ 

(B)  Contracts  Under  Seal 'J'49 

(C)  Negotiable  Instruments '''53 

(D)  Election  to  Hold  Principal  or  Agent 755 

2.  For  the  Tort  of  the  Agent "^60 

3.  For  the  Declarations,  Representations,  and  Admissions  of  the  Agent.  .  771 

4.  For  Notice  to  Agent "^^^ 


I.     In  General. 


776 


n.     Time  of  Receiving  Notice J81 

III.     Eisceptions  to  the  Rule  of  Notice 788 

CHAPTER  VI 
Liability  of  the  Third  Person  to  the  Principal 

1.  On  the  Contract  Made  by  the  Agent 791 

I.     Disclosed  Principal J91 

II.     Undisclosed    Principal 794 

2.  For  Funds  or  Property  of  the  Principal 799 

3.  In  Tort ^^^ 

PART  IV 

Actions 


CHAPTER  I 


The  Fobm. 


CHAPTER  II 


The  Parties  to  the  Action. 


811 


819 


CHAPTER  III 
Evidence  of  the  Agency 

1.  Presumption  and  Burden  of  Proof 820 

2.  Admissibility    |^^ 

I.     In  General ^-^ 

II.     Written    Power 830 

ni.     Declarations,  Acts  and  Testimony  of  the  Agent 833 

3.  Weight  and  Sufficiency 84G 

CHAPTER  IV 
Trial — Province  of  Court  and  Jury 850 


Judgment  and  Damages. 


CHAPTER  V 


* 


854 


TABLE    OF  CASES 

[cases  cited  in  footnotes  are  indicated  by  italics,    where  small  capitals 

ARE  used,  the  case  IS  REFERRED  TO  IN  THE  TEXT] 


Page 

V.  Harrison 253 

V.  Loomis 254 

Adams  v.  Robinson 563 

Adamson  v.  Jarvis 637 

Ahern  v.  Balvcr 274 

Ahem  v.  Baker 247 

Alexander   v.   Wade 7S 

Anderson  v.  Timljerlake 650 

Andrews  v.  Ramsay  &  Co 517 

Anonymous    253 

Antrim  Iron  Co.  v.  Anderson 320 

Arhuckle  v.  Gates 19 

Arhuckle  V.  Kirkpatrick 19 

Arkansas  Valley  SmcltitKj  Co.  v. 

BeUlen    Co 705 

Armitage  v.  Widoe 29 

Asliley  V.  Root 814 

Atkin  V.  Acton 237 

Atterbury  v.  Hopkins 6;>0 

Attrill  V.  Patterson 632 

Bacon  v.  Fourth  Nat.  Bank 640 

Baird  v.  Shipman 697 

Baldwin  Bros.  v.  Potter 581 

Bank  v.  Crafts 83 

Bank  v.  Gay 189 

Bank  of  Deer  Lodge  v.  Hope  Min. 

Co 4.35 

Bank  of  Rocky  Mount  v.  Floyd. . .  498 

Barbre  v.   Goodale 466 

Barker  v.   Greenwood 426 

Barksdale  v.  Brown 317 

Barrett  v.  Deere 414 

Barry  v.  Page 796 

Bartels  v.  Kiuninger 595 

Bartholemew  v.  Leech 544 

Bass  Dry    Goods    Co.    v.    (Jranite 

C^ty  Mfg.  Co 351 

Battelle  v.  Northwestern  Cement 

&  Concrete  Pavement  Co 92 

Batty  V.  Carswell :U9 

Batty  v.  Carswell 338 

Beat  V.  I'olhentuH 41i 

Bedell  v.  .Taiiney 597 

Beebee  v.   Robert 7!>2 

Beebke   v.    RonERT 819 

Bcecher  v.  B  ush 11 

Beecher  v.   Venn 3.52 

Bell  V.  McConnrn f'''!7 

Berger,  Appeal  of 186 

Godd,Pb.&  a.— b  (x 


Bernard  v.  Taylor 

Berry  v.   Chase 

Bibb  v.  Allen 

Birkett  v.  Postal  Telegraph  Cable 

Co 

Blackstone   v.    Buttermore 

Blackstone  v.  Buttermore.  .211, 

Bless  V.   Jenkins 

Bless  v.  Jenkins 

Blowers  v.  Southern  Ry 

Blumenthal  v.    Goodall 

Bolton  Partners  v.  Lambert 

Bonwell   v.    Howes 

Booth  V.  Kessler 

Booth  V.  Kessler 

Born  V.   Simmons 

Bosseau   v.   O'Brien 

Boston  V.  Shnmons 

Bonen  v.  Hall 

Bradford  v.  Bush 

Bradford   v.    Bush 

Bradstreet  v.   Everson 

Bradstreet  v.    Everson 

Brady  v.  Todd 

Brantley  v.  Southern  Life  Ins.  Co. 

Bray  v.   Gunn 

Brenner   v.   Lawrence 

Britton  v.   Turner 61-5, 

Brookshire  v.  Brookshire 

P.rookshire  v.  Voucannon 

Brown   v.   Henry 

Brown  v.   Johnson 

Brown  v.  West 

Bryant  v.   Moore.  .122,  156,  307, 

Bryant  v.   Moore 124,    154, 

P.ulkeley  v.   Dunbar 

I'.uUer   V.  Harrison 

BuLLER  V.   Harrison 679, 

Burby   v.    Roome 

Burch  V.  Americus  Grocery  Co... 

Burchard   v.    Hull 

Burke  v.   Bours 

Burke  v.  Bours 

P.urke   v.   Priest 

I'.urniugh    v.    Skinner 

I'.utman   v.   Bacon 

Byers  v.  Danley 


Page 
582 
760 
644 

761 
214 
632 
135 
189 
488 
240 
206 
484 
848 
448 
353 
397 
807 
722 
394 
395 
491) 
497 
373 
440 
.553 
725 
616 
245 
212 
126 
357 
384 
327 
171 
691 
680 
682 
645 
254 
2S(> 
5.39 
534 
210 
6S4 
415 
646 


Caley  v.  Morgan 22 

Cannon  Coal  Co.  v.  Taggart 265 

vii) 


XVIU 


TABLE    OF    CASES 


Page 

Capel  V.  Thornton 389 

Capel  v.   Thornton 391,  393 

Curstens  v.  McReavy 398 

Cartmell   v.   AUard 592 

Cai-y   V.   Webster t>7S 

Case  V.  Hammond  Packing   Co...  171 

Cassaboglou  v.  Gibbs 854 

Catlin   V.   Bell .  483 

Cawthorn   v.  Lusk 310 

Caicthorn  v.  Lusk 830 

Christian  Building  &  Loan  Ass'n 

V.    Walton 81 

City  of  Detroit  v.  Jackson 457 

Clatlin      V.      Continental      Jersey 

Works    337 

Claflin   v.    Continental  Jersey 

Works     354 

Claflin      V.      Continental      Jersey 

Works    439,  448,  830,  851 

Clark  V.  Dillman 59 

Clark  V.  Mullenix 243 

Clark  &  Co.  v.  Bank  of  Wheeling  600 

Clarke's  Lessee  v.  Courtney 453 

Clement  v.  Young-McShea  Amuse- 
ment   Co 779 

Clifton  V.    Ross 643 

Clough  V.  Whitcomb 367 

Cochran   v.  Rice 672 

Codding  v.  Munson 667 

Coffin  V.  Gephart 18o 

Columbia    Mill    Co.    v.    National 

Bank  of  Commerce 57 

Combe's  Case 35 

Combe's  Case 454,  459 

Conkey  v.  Bond 526 

Coukling  V.   Standard  Oil  Co 377 

Constant  v.  Unity  of  Rochester . .  785 
Cook  v.    Berlin    Woolen   Mills 

Co 538 

Cook  V.  Berlin   Woolen  Mills   Co.  543 

Cooley  V.  Perrine 170 

Vooley   r.    Perrine 373 

Copeland   v.    Touchstone 797 

Covin   V.   Hill 363 

Coykendall    v.    Constable 150 

Crane  v.  Grueneicald 418 

Cilbben  v.  Deal 66 

Cross  V.  Atchison,   T.  d  S.  F.  R. 

Co 21,  350 

Cummins   v.    Beaumont 291 

Cummins  v.   Beaumont 339 

Curtis  V.  Drought 417 

Curtis  v.   Drought 422 

Dahaher  v.  Garlock 142 

D'Arcy    v.    Lyle 642 

Darling  v.   Stanwood 489 

Darrow  v.  Home  Produce  Co....   741 

Davis  v.  Hamlin 533.  538 

Davis  V.    I-ane 23.  282 

Davis   v.    Lane 280,  284 

Davis  V.  Lynch 725 

Davis  V.  Windsor  Sav.  Bank....  278 
Da  vol  V.  Quimby 246 


Page 

Day  V.   Wamsley 780 

Daylight  Burner  Co.  v.  Odliu 379 

Dean  v.  I'lunkett 804 

Dempsy  v.  Chambers 197 

Denman    v.   Bloomer 395 

Deuuison  v.  Aldrich 541 

Denny   v.   Manhattan   Co 694 

De  Rivaflnoli  v.   Corsetti 267 

Despatch    Line    of    Packets    v. 

Bellamy    Mfg.    Co 125 

Despatch  Line  of  Packets  v.  Bel- 
lamy  Mfg.   Co 133,  481 

Deweese  v.  Muff 279 

Dexter  v.    Hall 29 

Dickinson  v.    Salmon 827 

Dispatch  Printing  Co.  v.  National 

Bank  of  Commerce 59,  293,  352 

Distilled    Spirits,    The 783 

Distilled   Spirits,   The 788 

Dixon  V.  Guay 428 

Dixon  V.  Hamond 579 

Dodge  V.    Hatchett 569 

Dodge  v.  Hopkins 206 

Dowden   v.    Cryder 730 

D.  Owen  &  Co.  v.  Cronk 688 

Dbury  v.   Foster 67,  69 

Dunwoody  v.   Saunders 339 

Dusenbury  v.  Ellis 6.55 

DUSENBURY    V.    ELLIS 658 

Eagle  Iron  Co.  v.  Baugh 840 

Echols   V.    State 1 

Ehrmantraut  v.  Robinson 113 

Eiehbaum   v.   Irons 665 

Eldridge   v.  Holway 485 

Elkhart  County  Lodge  v.  Crary..  42 

Elliott  V.    Stocks 830 

Ellison  V.  Jackson  Water  Co 72 

Elsee  V.   Gatward 260 

Elsee  v.   Gatward 266 

Empire   State   Ins.  Co.  v.  Ameri- 
can Cent.  Ins.  Co 732 

Empress  Engineering  Co.,  In  re. .  90 

Ermentrout  v.  Insurance  Co 293 

Everhart  v.   Searle 514 

Exchange  Bank  v.  Thrower 433 

Exchange  Bank  v.  Thrower 439 

Exchange    Nat.    Batik    v.     Third 

Nat.    Bank 498 

Fabens  v.  Mercantile  Bank 502 

Fairfield  Sav.  Bank  v.  Chase 786 

Falk  v.  Moebs 475 

Falk  V.   Moebs 463 

Falsken  v.  Falls  City  State  Bank  554 
Farmers'     Co-op.     Trust     Co.     v. 

Floyd    664 

Farmers'    Loan    &    Trust    Co.    v. 

Memphis  &  C.  R.  Co 201 

Farmers'    &    Mechanics'    Bank    v. 

Butchers'  &  Drovers'  Bank 334 

Farmers'    tC-    Mechanics'    Bank   v. 

Butchers'  &  Drovers'  Bank.. 20,  350 
Farnsworth   v.    Hemmer 316 


TABLE    OF    CASES 


XIX 


Page 

Faulkner  v.  Brown JIJ^ 

Feild   V.    Farriugton ^oG 

Feltus   V.    Swau t>95 

Field  V.  Campliell TT7 

Figueira  v.  Leruer 332 

First  Nat.  Bank  v.  Drake T3 

First  Xat.  Bank  v.  Drake 102 

First  Nat.   Bank  v.   Gay 'Jo 

First  Nat.   Bank  v.  Guy 120 

Fisher  v.   Marsh TOT 

Folsom  V.    Mns.sey SoO 

Ford   V.   Williams TUl 

Ford  V.  Williains 4GT 

Forlaw  v.   Augusta  Naval   Stores 

Co 531 

Forsyth  v.  Day 84,  125,  ITS 

Forsi/th  V.  Day TG.  124,  4G2 

Ft.  Worth  &  D.  C.  R.  Co.  v.  John- 
son  &  Trice T28 

Fowlds  V.  Evans 83G 

Franibach   v.    Frank 45G 

Fullerton   v.    McLaughlin 413 


(iambill  v.   Fuqua 

Garrett  v.    Sparks  Bros 

Garth   v.   Howard 

Gates  Iron  Works  v.  Denver  En- 
gineering  Works  Co 

Gates  Iron  Works  v.  Denver  En- 
gineering   Works 

Gaty   V.   Sack 

(ieylin  v.  De  Villeroi 

(Icylin  V.  De   TiUeroi 334, 

Gibson  v.  Snow  Hardware  Co 

Gibson    v.    iinow    Hardware    Co. 

10, 

Gilbert  v.    Holmes 

Gillett  V.   Corum 

(Ullman   v.   Robinson 

(Jilmore  v.  Newton 

Glover  v.    Henderson 

Glover   v.    Henderson G20, 

(Joss  V.  Stevens 

Gould  V.  Bowen 

Gower  v.  Andrew 

Graham    v.     United    States    Sav. 


Inst. 


Graham   v.    Williams 

Grand     Rajnds     Electric     Co.     v. 

Walsh  Mfg.  Co 

Grant  v.   Beard 

Graves  v.  IIokton 

Greenberg    v.    Whitcomb    Lumber 

Co 

Greenburg  v.   Palmieri 

GrefmfirUI  Bank  r.   Crafts.  .T3,  84 

(ireenleaf   v.   Moody 

Gregory  v.  Ix)ose 

Gregory  V.    Loose 342, 

(Jriggs   v.    Scldon 

GuKiGS    v.    Ski. DEN 3(j<;, 

Gunn  V.  Cantinc 

Gunter  v.  Stuart 


833 
G92 
839 

813 

342 
513 

50 
TT4 

19 

34G 
250 
G29 
320 
SOT 
229 
G45 
196 
438 
535 

430 

180 

295 

125 

56 

695 
755 

88 
550 

54 
439 
300 
:',S5 
TOl 
2S5 


Page 

Guthrie  v.   Armstrong 481 

Guthri€>  V.  Imbrie 4T0 

Hahl  V.   Kellogg 618 

Hahnenfeld   v.    Wolff 393 

Hall    V.    Crandall G56 

Hall  v.  Crandall GG4 

Hall  V.   Storrs 548 

Hamhro   v.   Burnand 291,  T31 

Hamlin   v.    Sears 89 

Hamlin  v.   Bears 88,  103 

Hampton  v.  Moorhead 411 

Hancock  v.   Gomez 585 

Hancock  v.    Yunker 659 

Haney    School    Furniture    Co.    v. 

Hightower    Baptist    Institute. .  .   145 

Harlow  v.  Oregouian  Pub.  Co 269 

Harrison  v.  Gotleib 612 

Harrison  ads.   253 

Harrison    Nat.    Bank     of    Cadiz, 

Ohio,    V.   Austin 423 

Hartley,  Appeal  of 226 

Hartley,    Appeal  of 211,  632 

Ilartlove  v.  Wm.  Fait  Co 138 

Hartop,    Ex  parte 669 

Haubelt    Bros.    v.    Rea    &    Page 

Mill    Co 301 

Haupt  V.    Vint 65T 

Haiti)t   V.    ^'int 4T3 

Hayicard  v.   Langinaid 88 

Heald   v.    Kenworthy T4T 

Heath  v.    Nutter 134 

Heath   v.   Sutter 39T 

Heath  v.    Stoddard 365 

Hemstreet  v.   Burdick 444 

Henry  v.   Heeh 84 

Henry  Christian  Building  &.  Loan 

Ass'n  v.  Walton 81 

Hern  v.  Nichols T60 

Hern   v.   Nichols T63 

Herring  v.    Skaggs 3T0 

Heugh    V.    Earl    of    Abergavenny 

and    Delves 694 

Heyn   v.    O'Hagen 164 

Heyn  v.   O'Hagen 160 

HinBLEWTIITE    V.    McMoRiXE GG 

Hibhleichite  r.  McMorlne 68 

Iliggins   V.    Moore 390 

HiGGiNS  V.   Moore 394 

Higgins   V.   Senior 464 

IIiGGiNS    V.    Senior 4GT,  T42 

Hildebrand     v.     American     Fine 

Arts   Co 620 

Hill   V.   Helton TT3 

Hill  V.  Helton 50.  289,  414 

Iloag   V.  Graves 503 

Hoggan   v.    Cahoon <)3i> 

Ilolden  v.  Rutland  R.  Co TIT 

Holt  V.  Ross 6T4 

Hook    V.    Crowe 3Sf) 

Hoover    v.    Perkins    Windmill    & 

Axe    Co -'-T 

Ilopwood   v.    Corbin 445 


XX 


TABLE    OP    CASES 


Page 

Ilovey    V.    Pitcher G52 

Howard  r.  Rice 392 

Hoyer   v.    Ludington 775 

Iliiiuplirey  v.   Lucas 793 

Iluut  V.   Roiismaiiier's  Adm'rs...  274 
Hunt    v.     Rousmanier's    Adm'rs 

211.  215,  217.  210.  221,  22(3,  284,  632 
Hunt  r.  RousiiKiiiicr's  Adm'rs.  .. .  217 
Hutsou  V.  Priuleutial  Ins.  Co....  304 

Hyatt    V.    Clark m 

Hyde  v.  Paige 729 

Illinois  Linen  Co.  v.  Hongh 587 

Ironirood  Store  Co.  v.  Harrison  & 

Green    lOl 

Irvine   v.    Watson 748 

Isii  V.   Crane 281 

Ish  V.  Crane 280 

Jacobs   V.  Warfleld 239 

Jaiies  v.  Allen  County G25 

James  v.  Allen  County 027 

Jansen    v.    Williams 508 

Johnston  v.  Milwaukee  &  W.  Inv. 

Co 322 

Jones  &  Jeter  v.  Blocker 809 

Joy   V.    Vance 417 

Judd   V.   Arnold 132 

Keidan  v.  Winegar 471 

Kciffhley   v.   Durant 88 

Keith  V.  Herschberg  Optical  Co. .  .  320 
Kelley  v.  Newburyport  <&  A.  H.  R. 

Co 110 

Kellogg  V.  Keller 573 

Kelly    V.    Breunau 247 

Kelly  V.   Phelps 258 

Kelly   v.    Phelps 104 

Kellii   V.  Phelps 030 

Kelsey  v.  National  Bank  of  Craw- 
ford  County 98 

Kent  V.  Borustein 711 

Ketchem   v.  :Marsland 103 

King  V.   Bellord 31 

King  V.   Rossett 815 

Kingan  &  Co.   v.   Silvers 6 

Kingan  <&   Co.  v.   Silvers 208,  762 

KOMOROWSKI    V.    Krumdick 359 

Komoroicski  v.  Erumdiclc. . .  .SoS,  300 
Krekeler,    Succession   of 005 

Lady    Windsor's    Case 085 

La  Force  v.   Washington  Univer- 
sity        034 

La  Grande  Nat.  Bank  v.  Blum...   105 
Lake    City    Flouring-Mill    Co.    v. 

McVean     561 

Lawrence  v.   Taylor 03 

Lawrence  v.   Taylor.  ..  .61,  133,   184 
Lawrence  v.  Winona  &  St.  P.  R. 

Co 825 

Leach  v.  Beardslee 387 

Lessee  of  Clarke  v.  Courtney.  ..  .  797 


Lester  v.  Snyder 

Leterman  v.  Charlottesville  Lum- 
ber   Co 

Lewis  v.  Read 

Lewis  v.    Read 

Lewis  V.   Watson 

Liebscher   v.   Kraus 

Lime  Rock  Bank  v.  Plimpton.... 

Lime  Rock  Bank  v.  Plimpton.. 

Lime  Rock  Bank  v.   Plimpton. . . 

Lindquist  v.  Dickson 

Lingenf elder  v.   Leschen 

Lockwood  V.  Bobbins 

Loeb  V.  Drakeford 

Loomis    ads. 

IxitUDON  Sav.  Fund  Soc.  v.  Ha- 
gerstown   Sav.   Bank 

Lovgh  V.  John  Davis  t£-  Co 

Louisville  &  N.  R.  Co.  v.  Blair.  . 

Loveless  v.  Fowler 

Ludlow-Saylor  Wire  Co.  v.  Fi-ib- 
ley    

Lum  V.  McEwen 

Lyon  V.   IMitchell 

Lyon  V.  Pollock 

Lyon   v.  Pollock 

Lyons  v.   Thompson 


McAlpin   V.    Cassidy 

McAlpin    v.    Cassidy 56, 

McAlpin   V.    Cassidy 

McArihur  v.   Times  Printing   Co. 

Maclean    v.    Dunn 

Maclean  v.   Dunn 

McCUntock  v.  South  Penn  Oil  Co. 
McCord  v.  Western  Union  Tel.  Co. 
McCracken    v.     San    Francisco 

130, 
McCracken   v.   San  Francisco. ..  . 

]McCullough  V.  Hitchcock 

MacFarlaud  v.  Helm 

MacFarren   v.   Gallinger 

MacGregor   v.    Gardner 

Mackay    v.    Commercial   Bank   of 

New    Brunswick 

McKinley   v.  Williams 

McMorris    v.    Simpson 

;\IcMullan  v.  Dickinson  Co 

Mair  v.    Himalaya  Tea   Co 

Mann's  Ex'rs  v.  Robinson 

IMarbury  v.   Barnet 

Marr  v.   Given 

Martin  v.  Roberts 

Martyn   v.   Kingsley 

MARTYN    v.    KIxXGSLEY 

Marvin   v.   Wilber 

Massachusetts    Life    Ins.    Co.    v. 

Carpenter    

Meeker  v.   Claghorn 

Memphis  &  C.  R.  Co.  v.   Scruggs 

Mercer  v.  Leihy 

Merchants'    Bank  of   Macon  v. 

Central    Bank 


Page 

2S8 

704 
114 
199 
71 
474 
803 
118 
171 
758 
188 
607 
480 
254 

853 
699 

487 
811 

303 
506 
38 
401 
400 
826 

347 
314 
427 
75 
174 
135 
206 
705 

182 
79 

397 
24 

619 

213 

703 
523 
812 
024 
238 
408 
209 
396 
606 
410 
417 
726 

589 

739 

79 

670 

750 


TABLE    OF    CASES 


XXI 


Page 
Merchants'    Bank    of    Macon    v. 

Central  Bank  of  Georgia 460 

Merchants'        &       Manufacturers' 
Bank  v.  Ohio  Valley  Furniture 

Co 306 

Merchants'       d       Manufacturers' 
Bank  v.  Ohio  Valley  Furniture 

Co 425,  434 

Merriman  v.  McCormick  Harvest- 
ing  Mach.    Co 627 

Merry   v.   Abney 776 

Mexican     Int.     Banking     Co.     v. 

Liohtenstein     582,  584 

Meyer  v.  Pulitzer  Pub.   Co (>44 

Middleton  v.  Fowler 768 

Millar  v.  Cuddy 609 

Miller   v.    Clark 590 

Miller   v.   Edmonston 429 

Miller  v.  State  Bank  of  Duluth.  .   704 
Minneapolis  Trust  Co.  v.   Mather  558 

Mobile  &  M.  R.  Co.  v.  Jay 159 

Modern  Woodmen  of   America  v. 

Colman    599 

Montague  v.   McCarroU 218 

Moore  v.  McKibbiu 594 

Moore  v.  Shields 686 

Moore  v.    Stone 207 

Moores  v.   Citizens'   Nat.   Bank . .  296 

Moran  v.  Dunphy 721 

Morey  v.    Webb 361 

Morris  v.  Cleasby 716 

Morrison  v.  Orr 564 

Morrow  v.  Higgins 70 

Moss  Mercantile  Co.  v.  First  Nat. 

Bank    585 

Mountford  v.  Scott 782 

MOUNTFORD    V.     SCOTT 784 

Mt.  Morris  Bank  v.  Gorham 831 

Mowatt   V.   McLelan 682 

Moyle   V.   Congregational   Soc.   of 

Salt  Lake  City 104,  841 

Moyle  V.  Confjref/ational  Soc 342 

Moyses  v.   Rosenl)aum 572 

MundorfC   v.   Wickersham 120 

Murphy    v.   Helmrich 670 

Mussey  v.   Beecher 293 

Muth  V.  Goddard 445,  446 

National    Imp.    &    Const.    Co.    v. 

Maiken    121 

Neff  V.  Baden 715 

Nichols  V.   Weil 674 

Nichols,  Shepherd  &  Co.  v.  Shaf- 
fer        166 

Norwich  University  v.  Denny....  4.S(> 

Nye    V.    Swan 167 

Nye  v.  Swan 123 


Overby  v.  Overby 195 

Owen  &  Co.  v.  Cronk 6.S.S 


Pacific  Biscuit  Co.  v.  Dngger.  . . .   342 
Pacific  Biscuit  Co.  v.  Duyyer....     20 


Page 

Parcell  v.  McComder 616 

Parke  v,  Frank 216 

Paterson   v.   Gandasequi 738 

Paterson  v.  Gandasequi.  ..  .465,  729 

Paterson  v.   Gandasequi 74.3 

Patterson   v.    Lippincott 30 

Patterson  v.   Neal 328 

Pattison  v.  Barnes 806 

Payne  v.  Potter 382 

Pearce   v.    Dill 801 

Peerless  Mach.  Co.  v.  Gates 362 

Penfold  V.  Warner 403 

Perkins  v.  Smith 693 

Perry  v.  Hudson 183 

Peterson  v.  Poignard 570 

Peyton  v.  Old  Woolen  Mills  Co...  843 

Pickering    v.   Busk 319 

Pickering  v.  Busk.  .364,  366,  375,  391 

Pitts   V.    Mower 798 

Pole  V.  Leask 49 

Pole  V.  Leask 821 

Porter  v.   Schendel 720 

Post  V.  Pearson 451 

Powell  V.  Trustees  of  Village   of 

Newburgh     641 

Pratt  V.  Beaupre 463 

Pursley  v.   Stahley 788 

Ralphs  V.  Hensler 137 

Raney  &  Cheney  v.  Weed 47 

Rawlings   v.    Robson 470 

Reese  v.   Medlock 341 

Reese  v.   Medlock 109,  338 

Reese   v.  Medlock 136 

Ren  wick  v.  Wheeler 447 

Rice  V.  Wood 518 

Rich    V.    Black 527 

Richardson  v.  Taylor 561 

Richmond  Locomotive  &  Machine 

Works  V.   Moi'agne 468 

Roberts  v.   Matthews 415 

Rogers  Mfg.  Co.  v.   Rogers 267 

Rudasill  v.  Falls 118 

RuDASiLL  V.   Falls 165 

Rupp  V.   Sampson 518 

Rupp  V.    Sampson 317 

Sadler   v.   Evans 685 

St.  Louis  Gunning  Advertising  Co. 

V.  Wanamaker  &  Brown 155 

St.  Louis  Gunning  Advertising  Co. 

V.  Wanamaker  d  Brown.  .  .325,  331 
St.   Louis,   I.   M.   &   S.   R.   Co.  v. 

Grant     768 

Salem  Traction  Co.  v.  Anson 578 

Salem  Traction  Co.  v.  Aitson....  813 
Salmon  v.  Austro-American  Stave 

&    Lumber   Co 3.55 

Sanders   v.    Peck 140 

Sargent    v.    Morris 702 

Saugerties  &  N.  Y.  Steamboat  Co. 

V.    Miller 358 

Savelanu    v.    Green 164 


XXll 


TABLE    OF    CASES 


Pape 

Savcland  v.   Green 1(10 

Schtiefer    v.    Heiikel 712 

Schaefer  v.  Hcnkcl 797 

Sebanz  v.   Martin 192 

Schanz  v.  Martin 597 

!^c-hniicU  v.   Shaver 820 

Schreyer     yv.      Turner      Flouring 

Mills    Co 74 

Schultz    V,    GrilHn 400 

Scudder  v.   Anderson 309 

Security  Trust  &  Life  Ins.  Co.  v. 

Ellsworth    203 

Shannon  v.   Marmaduke .529 

Sharp  V.  Knox S2S 

Sheahan  v.  National  S.  S.  Co 227 

Sheahan  v.  National  S.  S.  Co 020 

Shepard  v.  Sherin 078 

Shepherd   v.    Gibbs 194 

Sheppard's    Touchstone 05 

Short  V.  Spackman 709 

Shuenf eldt    v.    Junkermann 177 

SiBBALD  V.  Bethlehem  Iron  Co.  035 

Sfbhald  V.  Bethlehem  Iron  Co 034 

Silverwood    v.    Latrobe 33 

Simpson   v.   Waldby 493 

Singer  Mfg.  Co.  v.  Rahn 10 

Skinner   &    Co.    v.    Weguelin   Ed- 

dowes  &  Co 490 

Smith    v.    Fletcher 107,  108 

Smith    V.    Fletcher 128 

Smith  V.   Kidd 419 

Smith  v.   Kidd 109,  413 

Smith    v.    Tracy 171 

Smith  V.  Tracg 374 

Smith  Premier  Typewriter  Co.  v. 

National  Hartel  Light  Co 354 

Smout    V.    Ilbery 053 

Smout    v.    Ilbery 188 

Smout  V.  llhery 279 

Snelling   v.   Arbuckle  Bros 13 

Soames    v.    Spencer 172 

Sorrel  v.   Brewster 344 

Southern  R.   Co.  v.   Grizzle 090 

South  &  North  Alabama  R.  Co.  v. 

Henlein    850 

Spalding  v.   Mattingly 545 

Sprague    v.    Gillett 300 

Standard  Oil  Co.  v.  Linol  Co 771 

Standard  Oil  Co.  v.  Linol  Co 842 

State    v.   Buttles'    Ex'b 204 

State  V.   Buttles'   Ex'r 99,  101 

SteCfens  v.  Nelson 75 

Sternaman    v.    Metropolitan    Life 

Ins.    Co 2 

Sternaman   v.    Metropolitan    Life 

Ins.    Co 51 

Stevenson   v.   Mortimer 710 

Stickney   v.    Monroe 709 

Stier  V.  Imperial  Life  Ins.   Co..  .  233 

Still    V.    Bowers 840 

Stirn  V.  Hoffman  House  Co 381 

Strong   v.    West 020 

Swartz  V.  Ballon OS 


Page 

Taylor  v.  Burns 12,  225 

Taylor  v.  Davis'  Adm'x 10 

Taylor  v.    Plumer 799 

Taylor    &    Farley    Organ    Co.    v. 

Starkey    384 

Teasley  v.  Bradley 001 

Tebbetts  v.  Levy 847 

Tebbetts  v.  Moore 142 

Tenant  v.  Elliott 581 

Terwilliger  v.  Ontario,  C.  &  S.  R. 

Co 220 

Thacher   v.  Pray 117 

Thacher  v.   Pray 89 

Thacher  v.   Pray 1 71 

Tharp  v.  Tharp 570 

Thatcher  v.  Winslow 701 

Thilmany  v.  Iowa  Paper  Bag  Co.  001 

Thompson  v,   Havelock 513 

Thompson  v.  Laboringman's  Mer- 
cantile &  Mfg.   Co 105 

Thompson  v.  Laboringman's  Mer- 
cantile d  Mfg.   Co 

110,  158,  100,  837 

Thomson  v.  Davenport 743 

Thomson    v.    Davenport 074,  740 

Timberlake  v.  Thayer 015 

Tool  Co.  v.  Norris 40,  42,  44 

Tool  Co.   V.  Norris 40 

Tootle  V.  Cook 431 

Town  of  Ansouia  v.  Cooper 175 

Triggs  V.   Jones 190 

Triggs  v.  Jones 123 

Triggs  v.  Jones 142,  158 

Tripler  v.   Olcott 574 

Trist  V.  Child 43 

Tinido  V.  Anderson 100 

Trundy  v.  Farrar 51 

Tiiislow  V.  Parkersburg  Bridge  & 

Terminal   R.    Co 730 

Tucker  v.   Jerris 199 

Tucker  v.   Jerris 110 

Tucker  Mfg.  Co.  v.  Fairbanks ....  477 

Turnbull   v.   Garden 520 

Tuthill   V.   Wilson 750 

Underbill   v.    Jordan 048,818 

United  States  v.  Jarvis 204,  044 

United.   States   Exp.   Co.  v.  Lucas  582 
United    States    School    Furniture 

Co.  V.  School  District 149 

Upton  v.    Suffolk   County  Mills..  378 

Valentine   v.   Piper 405 

Valley  Bank  of  Phoenix  v.  Brown  101 
Vanada's     Heirs     v,     Hopkins' 

Adm'r    407 

Vanada's  Eevrs  v.  Hopkins'  Adm'r  445 

Van  Dusen  v.  Bigelow 530 

Van  Dyke  v.  Van  Dyke 749 

Van  Eppes   v.    Smith 331 

Veil  &  Petray  v.  Mitchell's  Adm'rs  591 

Velsian  v.   Lewis 80S 

Very   v.    Le\T 442 


TABLE    OF    CASES 


XXIU 


Page 

Vilas  V.  Downer 010 

Vilwig  V.  Baltimore  &  O.   R.   Co.  815 

Wade   V.   Wolfson 145 

Wales  V.   Mower 837 

Walker  v.  Smith 5(J7 

Wallace   v.    Floyd COS 

Walsh  V.  St.   Paul  Trust  Co 835 

Walsh   V.  Whitcomb 216 

Walsh    v.    Whitcomb 223 

Warwicke  v.   Noakes 594 

Wassell  V.   Reardon 734 

Waterson  v.  Rogers 151 

Watson  V.   Swann 93 

Watson  V.  Sivann 88 

Webster   v.    Clark 724 

Webster  v.   Wray 753 

Webster  v.    Wray 344 

Westurn  v.  Page 376 

Wheeler   v.    Northivestcrn    Sleigh 

Co 103,  171 

Wheeler  &  Wilson  Co.  v.  Augheij  149 

Whitecomb  v.  Jacob 591 

Whitley  v.  James 161 

Whitney  v.   Dtttcii 27 

Whitney  v.   Wyman.  . .  .451,  456,  6.50 

Whitney  v.   Wyman 4.59 

Wilcox  V.  Hines 852 

Wiley  V.   Shank 455 

Wilkes  v.  Back 459 

Wilks  V.  Back 450 

Wm.   Rogers   Mfg.   Co.   v.  Rogers  267 

Williams  v.  Everett 689 

Williams  v.  Merritt 158 


Williams   v.    Sapieha 26 

Williams    v.    Storm 153 

Wilson    V.    Beardsley 452 

Wilson   V.    Hayes 82 

Wilson  V.  Tumnian 8o 

Wilson   v.   Tumman 199,  202 

Wilsoiv  V.  Tumman 196 

Wilson  V.   Wilson 546 

Winchester   v.    Howard 794 

Wiusor   V.    Griggs 673 

Wisconsin  Bank   v.   Morley 823 

Witman    v.    Felton 580 

Wolstenholm    v.    Da  vies 416 

WOLSTENHOLM    V.    DAVIES 421 

Wood  v.  McCain 183,  205,  441 

Wood  V.  McCain 21 

Woodruff   V.    McGehee 794 

Woods  V.  Franeklyn 143 

Woods  v.  Francklyn 354 

Workman   v.   Wright 83 

Workman   v.    Wright 84 

Worrall  v.  Munu 59 

Worrall  v.   Munn 136,  847 

Worsley  v.  Earl  of  Scarborough  781 
Wyckoff,    Seaman   &    Benedict   v. 

Davis     86 

Wyckoff,    Seaman  <&   Benedict   v. 

Davis    1^1 

Young     V.     Harbor     Point     Club 
House    Ass'n 350 

Zottman  v.   City   and   County   of 
Sau    Francisco 129 


/A^Cn.-^^^tx.^^^eUL. 


/^ 


Z:^ 


O-^xjL^ 


CASES 


ON 


PRINCIPAL  AND   AGENT 


n:2_^,^>^. 


THE  RELATION 


CHAPTER  I 


/i^.UAji-^'L  f^yeuU   ^-^rx^ 


DEFINITION  AND  NATURE  OF  THE  RELATION  f/U^^^c^.^^ 


BLACKSTONE'S  COMMENTARIES,  BOOK  I,  CH.  14,  I,  4. 

There  is  yet  a  fourth  species  of  servants,  if  they  may  be  so  called, 
being  rather  m  a  superior,  a  ministerial,  capacity,  such  as  stewards, 
factors,  and  bailiffs,  whom,  however,  the  law  considers  as  servants  pro 
tempore,  with  regard  to  such  of  their  acts  as  affect  their  master's^^ 
employer's  property. 

ECHOLS  V.  STATeM^^.^^^^^,^  ^^'^^'^^l^^^ 

(Supreme  Court  of  Alabama,  1909.     158  Alafji^s'^mii.  f  g[)eA/v iW^^'^^^i^  /^ 

From  a  conviction  of  embezzlement  defendant  ap^ls.^  (Ur^t^^^^"^^^        {lA^ 
Simpson,  J.    The  appellant  was  convicted  of  the  offense  of  embcz^(^C£4/w^  ^j-i^^-. 

zlement;    the  affidavit  charging  that  he.  "being  an  agent,  servant,  ^^''  f^^yf^^-^ 
clerk  of  affiant,  embezzled  or  fraudulently  converted  to  his  own  ^]^''^J{^^y^^J^if 
money  to  about  the  amount  of  $18,  or  fraudulently  secretes,  with  in- 
tent to  convert  to  his  own  use,  or  to  the  use  of  another,  $18  in  money 
which  has  come  into  his  possession  by  virtue  of  his  office  or  employ- 
ment."   The  evidence  for  the  state,  in  its  strongest  light  against  the 
defendant,  is  that  the  defendant,  being  a  tailor,  agreed  to  make  a  suit 
of  clothes  for  the  prosecutor  for  a  certain  amount  of  money,  part  of 
which  was  to  be  paid  in  cash  and  the  remainde^  to  be  paid  in  the  fu 
(;oi)i).ri{.&  A. — 1 


A- 


L    .1   ._^^lV 


tare;    that  the  prosecutor  made  the  cash  payment  and  demanded  his 
^    suit  of  clothes;    that  defendant  refused  to  deliver  it  without  the  pay- 
ment of  more  money,  and  also  refused  to  return  his  money. 

This  court  said,  in  discussing  a  former  statute  (which  was  identical 
with  section  6831  of  the  Code  of  1907,  in  so  far  as  the  point  involved 
is  concerned),  that  an  agent  is  "one  who  undertakes  to  transact  some 
husiness  or  to  manage  some  affair  for  another,  by  the  authority  and  on 
account  of  the  latter,  and  to  render  an  account  of  it" ;  also  that 
"  'agent,'  as  employed  in  this  section,  imports  a  principal,  and  implies 
-'  V  employment,  service,  delegated  authority  to  do  something  in  the  name 

'  i^  ^  and  stead  of  the  principal."     Pullam  v.  State,  78  Ala.  31,  34,  56  Am. 

Rep.  21.  The  relation  of  principal  and  agent  did  not  exist  between 
the  prosecutor  and  the  defendant,  but  the  relation  of  seller  and  pur- 
chaser. The  defendant  did  not  undertake  to  do  anything  in  the  name 
and  stead  of  the  prosecutor.  The  money  was  not  placed  in  his  hands 
to  be  used  or  cared  for,  and  accounted  for  to  the  prosecutor,  but  was 
paid  to  him  in  part  settlement  for  a  suit  of  clothes,  and  thereby  be- 
came the  money  of  the  defendant,  to  use  as  he  pleased.  Whatever 
other  liability  or  penalty  the  defendant  may  have  incurred,  he  could 
not  be  convicted  of  embezzlement  on  the  facts  of  this  case.  Conse- 
quently the  defendant  was  entitled  to  the  general  charge,  as  requested 
and  refused. 

The  judgment  of  the  court  is  reversed,  and  the  cause  remanded. 


STERNAMAN  v.  METROPOLITAN  LIFE  INS.  CO. 

(Court  of  Appeals  of  New  York,  1902.     170  N.  Y.  1.3.  62  N.  E.  763,  57  L.  R.  A. 
318,  88  Am.  St.  Rep.  025.) 

Appeal  from  a  judgment  for  defendant  in  an  action  upon  a  policy 
of  insurance  issued  to  plaintiff  upon  the  life  of  her  husband,  George 
Sternaman.  The  contract  provided  that  the  application  for  the  insur- 
ance should  become  part  of  the  contract  of  insurance,  and  that  the 
medical  examiner,  in  writing  in  the  answers  of  the  applicant,  was  the 
agent  of  the  latter  and  not  of  the  company.  LTpon  the  death  of  the 
insured  payment  of  the  policy  was  refused,  on  the  ground  that  some 
of  the  answers  written  in  by  the  medical  examiner  were  not  true,  and 
hence  the  policy  was  void. 

Vann,  J.^  [After  stating  the  facts:]  The  decision  of  this  appeal 
turns  substantially  upon  the  following  question :  When  an  applicant 
for  life  insurance  makes  truthful  answers  to  all  questions  asked  by  the 
medical  examiner,  who  fails  to  record  them  as  given,  and  omits  an 
important  part,  stating  that  it  is  unimportant,  can  the  beneficiary  show 
the  answers  actually  given,  in  order  to  defeat  a  forfeiture  claimed  by 

1  Part  of  the  opinion  is  omitted. 


*f>  (LAJUfi^^(c^(    Pta     G^^>^./4^^c-f^V^-^J^^^^^fc<^^^^l-*y^ 


'7^^2^^€JU.4r^.^r^ 


U^ 


yi^ 


L^ 


'/i^ 


■t^ 


Ch.  1)  DEFINITION   AND   NATURE    OF   THE   RELATION  3 

the  insurer  on  account  of  the  falsity  of  the  answers  as  recorded,  even  (^^\_4A<,cCd-n 
if  it  was  agreed  in  the  appHcation  that  the  medical  examiner,  employed  i^  f  9  ^^^^ 
and  paid  by  the  insurer  only,  should  not  be  its  agent,  but  solely  the  ^j 

agent  of  the  insured?  V-^-^-y*--^^^^^ 

The  power  to  contract  is  not  unlimited.  While,  as  a  general  rule.'W?  ryy^-*-AM^ 
there  is  the  utmost  freedom  of  action  in  this  regard,  some  rcstnct\onslLyLAZ^tU>>  IT  /Uy^ 
are  placed  upon  the  right  by  legislation,  by  public  policy,  and  by  the /i^^<_c<_  ^  /)^  <^ 
nature  of  things.  Parties  cannot  make  a  binding  contract  in  violation'.^^.,^^^^^^  'i-^y^^-^Jliru^ 
of  law  or  of  public  policy.  They  cannot  in  the  same  instrument  agree  .  y^/f  o/S-r^ 
that  a  thing  exists,  and  that  it  does  not  exist,  or  provide  that  one  is  \\\^  Jj  ^>^  ^c.*^,^^,^ 
agent  of  the  other,  and  at  the  same  time,  and  with  reference  to  tlie'^^^-^\^\^  p 

same  subject,  that  there  is  no  relation  of  agency  between  them.    They  _  v^uf^^^'^T/       / 
cannot  bind  themselves  by  agreeing  that  a  loan  in  fact  void  for  usury  is^K?  ^^--^^^'^^-^ ^ 
not  usurious,  or  that  a  copartnership  which  actually  exists  between^^  ,^^^^^,^^^^ 
them  does  not  exist.     They  cannot  by  agreement  change  the  laws  ot 
nature  or  of  logic,  or  create  relations,  physical,  legal,  or  moral,  whicl 
cannot  be  created.     In  other  words,  they  cannot  accomplish  the  impos-     / 
sible  by  contract.  ^ 

The  parties  to  the  policy  in  question  could  agree  that  the  person  who 
filled  out  part  A  of  the  application  was  the  agent  of  the  insured  and 
not  of  the  company.  There  is  a  difference  in  the  nature  of  the  work 
of  filling  out  the  blank  to  be  signed  by  the  insured,  and  that  of  filling 
out  the  blank  furnished  for  the  use  of  the  medical  examiner.  The 
former  is  the  work  of  the  insured,  and  may  be  done  as  well  by  one 
person  as  by  another.  He  may  do  it  himself,  or  appoint  an  agent  to  do 
it  for  him.  It  is  quite  dift'erent,  however,  with  the  work  of  the  medical  ■ 
examiner,  because  that  requires  professional  skill  and  experience  and' 
the  insurer  permits  it  to  be  done  only  by  its  own  appointee.  The  in-  ' 
sured  can  neither  do  that  work  himself,  nor  appoint  a  physician  to  do 
it,  because  the  insurer  very  properly  insists  upon  making  the  selection 
itself.  The  medical  examiner  was  selected,  employed,  and  paid  by  the 
company.  The  insured  had  nothing  to  do  with  him,  except  to  submit 
to  an  examination  by  him,  as  the  expert  of  the  company,  and  to  answer 
the  questions  asked  by  him  in  behalf  of  the  company.  This  he  was 
forced  to  do  in  order  to  procure  insurance ;  for  the  company  required 
him  to  undergo  a  medical  examination  by  an  examiner  selected  and 
instructed  by  itself,  before  it  would  act  upon  his  application  for  a  pol- 
icy. He  could  neither  refuse  to  be  examined,  nor  select  the  exam- 
iner, and  he  was  not  responsible  if  the  latter  was  negligent  or  unfit  for 
the  duty  assigned  to  him.  He  could  not  direct  or  control  him,  but  the 
company  could  and  did ;  for  it  required  him  to  make  the  examination, 
fill  out  part  V>  of  the  application  blank,  and  report  the  facts  with  his 
opinion.  The  insured  made  no  contract  with  the  examiner,  and  was 
under  no  obligation  to  pay  him  for  his  services.  The  company,  how-  ^0 
ever,  made  a  contract  with  him.  to  do  certain  work  for  it,  and  agreed 
to  pay  him  for  the  work  when  done.  ^ 

/iW'    • 
7 


-M 


uc\ 


^ 


J^  ' 


4  THE    RELATION  (Parti 

As  between  the  examiner  and  the  insured,  the  relation  of  principal 
and  agent  did  not  exist,  while,  as  between  the  examiner  and  the  com- 
pany, that  relation  did  exist  by  operation  of  law;  yet  it  is  claimed 
that,  as  between  the  insured  and  the  company,  the  examiner  was 
the  agent  of  the  former  only,  because  he  had  so  agreed,  not  with 
the  examiner,  but  with  the  company  itself.  Under  the  circumstances, 
an  agreement  that  the  physician  was  the  agent  of  the  insured  was 
like  an  agreement  that  the  company  or  its  president  was  his  agent. 
It  was  in  contradiction  of  every  act  of  the  parties  and  of  every  fact 
known  to  either.  The  law,  when  applied  to  the  facts,  made  the  physi- 
cian the  agent  of  the  company,  and  not  of  the  insured ;  and  can  it  be 
held  that,  as  the  insured  agreed  that  the  physician  was  his  agent,  he 
became  such  in  spite  of  the  law  and  the  facts?  This  is  not  a  case  of 
agency  of  one  party  for  one  purpose,  and  of  another  party  for  a  differ- 
ent purpose;  for  the  physician  was  employed  for  a  single  purpose 
only,  and  that  was  to  make  a  physical  examination  of  the  insured,  ask 
him  the  questions  furnished  by  the  company,  record  his  answers,  and 
report  the  result.  They  were  not  the  questions  of  the  insured,  put  to 
himself,  to  elicit  facts  for  his  use.  He  knew  the  facts.  He  did  not 
need  to  question  himself  to  find  out  what  he  knew,  nor  to  employ  an 
agent  for  that  purpose.  The  questions  were  those  of  the  company, 
carefully  prepared  for  it  by  skillful  hands,  and  furnished  to  its  medical 
examiner  to  be  asked,  so  that  it  could  learn  what  the  insured  knew 
about  himself.  It  needed  the  facts  for  its  use,  and  what  was  done  by 
its  own  examiner  to  get  the  facts  and  report  them  to  the  company  was 
its  work,  done  for  its  benefit  and  in  the  course  of  its  business.  The 
answers  were  not  volunteered,  but  were  given  in  response  to  questions 
asked  by  the  company,  as  much  as  if,  impersonated,  it  had  actually 
asked  them  as  an  individual.  Whatever  it  told  Dr.  Langley  to  do  for 
it,  in  the  view  of  the  law,  it  did  itself.  "Qui  facit  per  alium,  facit  per 
se."  It  appointed  Dr.  Langley  its  agent  for  the  purpose  named,  and 
he  derived  all  his  authority  to  act  from  the  company,  which  could  regu- 
late his  conduct  by  its  rules,  and  could  provide  for  such  security  to 
protect  its  interests  from  the  consequences  of  his  neglect  or  default 
as  it  saw  fit. 

Can  parties  agree  that  facts,  which  the  law  declares  establish  a  cer- 
tain relation,  not  only  do  not  establish  that  relation,  but  establish  di- 
rectly the  opposite?  Can  A.  appoint  B.  his  agent  for  a  definite  purpose, 
and  then  agree  with  C.  that  B.  is  not  the  agent  of  A.,  but  is  the  agent 
of  C.  for  that  purpose ;  there  being  no  agreement  whatever  between  B. 
andC? 

An  agency  is  created  by  contract,  express  or  implied.  It  "is  a  legal 
relation  by  virtue  of  which  one  party  (the  agent)  is  employed  and  au- 
thorized to  represent  and  act  for  the  other  (the  principal)  in  business 
dealings  with  third  persons.  The  distinguishing  features  of  the  agent 
are  his  representative  character  and  his  derivative  authority."     Mech- 


^:^    '  ^i      L\  y  y^.f^  /  ~<^    L'*  "^ 


^'y^    U  ^ 


^A    !  u.(juC^L  A't 


DEJFINmON   AND   NATURE    OF   THE   RELATION  5       /--         ^ 


em,  Ag.  §  1 ;    Story,  Ag.  §  3.     "To  constitute  agency  there  must  be 

consent  both  of  principal  and  of  agent."    Whart.  Ag.  §  1.    What  was 

the  contract  between  the  company  and  the  examiner?    The  defendant, >    // 

being  a   corporation,  could  act  only  through   agents.     Having   some      '''%^^^;^ 

work  to  do  in  the  form  of  a  medical  examination,  it  requested  Dr. 

Langley  to  do  it.     It  created  the  relation  of  agency  between  him  and,.<v:^   ,  ' 

itself  by  employing  him,  paying  him,  etc.     It  alone  could  discharge    ^ 

him,  and  to  it  alone  was  he  responsible  for  disobedience  or  negligencerj»^  y 

It  could  control  his  conduct  by  any  reasonable  instructions,  and  hold  ''^^-^-^  :   ''"-^  '• 

him  liable  if  he  violated  them.     It  prescribed  certain  questions  that 

he  should  ask,  and  required  him  to  take  down  the  answers  in  a  blank  ^^  '-^ 

prepared  by  itself.     It  could  sue  him  if  he  did  not  do  it  properly,  and  <>-^ 

he  could  sue  the  company  if  it  did  not  pay  him  for  doing  it.    Thus  we  • -t-^^TT-d^v^ 

have  an  agency  between  the  company  and  the  examiner  established  /  /(t^  /}j}-~^f_ \ 

by  mutual  agreement,  with  the  right  on  the  one  hand  to  instruct,  to  ^         ^^~"^^/ 

discharge,  and  to  hold  liable  for  default,  and  on  the  other  to  compel 

payment   for  services   rendered.      Hence  what   the   examiner   did   in  U    jC^f  (*j,J 

the  course  of  his  employment  the  company  did,  and  what  he  knew  \  ^1-A-O^-^Wk^ 

from  discovery  while  acting  for  it  the  company  knew.  GLA/ 

What  was  the  contract  between  the   insured   and   the   examiner?    ^^W'^^d^ 

None  whatever.     The  insured  did  not  employ  the  examiner,  and  the       j  / 

examiner  did  not  agree  to  work  for  him.    Neither  was  under  any  legal  "^/f  y 

obligation  or  liability  to  the  other.    The  insured  could  not  instruct  iht^/Lcl^  ^^"5^ 
doctor,  nor  discharge  him,  nor  sue  him  for  negligence,  and  the  doctor  / 

could  not  sue  the  insured  for  compensation.     The  relation  of  prin-  /t^Tf    (H^^J^-X- 
cipal  and  agent  did  not  exist  between  them,  either  by  virtue  of  any  /        J 

contract  or  by  operation  of  law.  _     i.-'L^^^-   /^ 

What  was  the  contract  between  the  insured  and  the  insurer?    With_^    -^  - 
the  relations  above  described  as  existing  between  the  insurer  and  thef^'#«-c6-|  L-'A-^ 
examiner  in  full  force,  and  in  the  absence  of  any  legal  relation  between^,^  /  j 

the  examiner  and  the  insured,  an  attempt  was  made  by  the  insurer,'--vrrtc/tX'6C«r 
by  an  agreement  imposed  upon  the  insured,  to  subvert  the  relation  ^^  J        a         / 
its  own  examiner  to  itself,  and  establish  a  relation  between  him  and  the^^^y  ^^  ^^^ 
insured,  without  the  consent  of  either  given  to  the  other.    There  was 
no  tripartite  contract.    While  the  contract  between  the  doctor  and  th9{^,,<j^.^i,^^^y^ 
company  was  still  in  existence,  the  latter  agreed  with  a  third  party 
only  that  that  contract  did  not  in  fact  exist  between  the  two  parties^  ^^ 
who  made  it,  but  did  exist  between  two  parties  who  did  not  make  itf 
This  was  not  possible  by  any  form  of  words,  any  more  than  to  make  f\    Otj^yut. 
black  white,  or  truth  falsehood.     We  think  that  the  medical  exam-  A^**'*"'^'^* 
iner  was  the  agent  of  the  defendant  in  making  the  examination  of/ 
the  insured,  recording  his  answers,  and  reporting  them  to  the  com-  '6^1/^ 

*i>         ^         '^  I 


pany      *     *     * 


Judgment  reversed.^ 

2  The  dissenting  opinion  of  Tarlier,  C.  J.,  with  whom  Gray,  J.,  concurs,  lif* 
omitted.  ''     / 


6  THE  RELATION  (Part  1 

KINGAN  &  CO.  V.  SILVERS  et  al. 
(Appellate  Court  of  Indiana,   1S94.     13  Intl.  App.  SO,  37  N.  E.  413.) 

Appeal  from  a  judgment  for  defendant  in  an  action  on  a  promissory 
note  bearing  interest  at  8  per  cent.,  "after  maturity."  The  note  was 
procured  by  plaintiff's  traveling  salesman,  one  Nichols,  who,  without 
the  consent  or  knowledge  of  defendants,  altered  it  by  striking  out  the 
words  "after  maturity"  and  inserting  words  so  as  to  make  it  bear  8 
per  cent,  interest  "from  date."  Plaintiffs  never  approved  the  altera- 
tion, and  now  sue  upon  the  note  as  originally  made.  It  was  no  part 
of  the  duty  of  Nichols  to  make  settlements,  nor  to  take  notes,  but  in 
this  instance  he  had  been  instructed  by  plaintiffs  to  procure  from  de- 
fendants a  note  to  cover  their  indebtedness  to  plaintiffs,  and  to  transmit 
the  same  to  his  principals. 

LoTz,  J.^  [After  stating  the  facts,  and  pointing  out  the  general 
principle  that  public  policy  demands  that  a  material  alteration  of  a 
written  instrument  shall  destroy  it  so  as  to  prevent  a  recovery  upon 
it:]  *  *  *  The  rules  that  now  prevail,  as  we  gather  them  from 
the  decided  cases,  are:  (1)  That  the  alteration  of  a  note  or  written  in- 
strument in  a  material  matter  by  a  stranger  is  but  a  spoliation,  and 
does  not  destroy  it,  and  a  recovery  may  be  had  on  it  in  its  original 
condition.  (2)  If  the  plaintiff,  the  obligee,  or  the  holder  make  an  alter- 
ation in  an  immaterial  matter,  the  alteration  does  not  destroy  the  note, 
but  a  recovery  may  be  had  on  it  in  its  original  condition.  (3)  But  if 
the  alteration  be  in  a  material  matter,  and  be  purposely  or  intentionally 
made  by  the  plaintiff,  the  obligee,  or  the  holder,  such  alteration  de- 
stroys the  note  or  instrument,  and  no  recovery  can  be  had  upon  it  in 
either  its  original  or  altered  condition.  The  last  rule  is  the  same  as 
one  of  the  rules  laid  down  by  Lord  Coke  in  Pigot's  Case,  and  is  still 
the  law. 

If  the  case  at  bar  falls  within  this  latter  rule,  then  the  demurrers 
were  correctly  sustained.  The  change  in  the  note  was  not  made  by 
the  plaintiff's  order  or  direction,  but  it  intrusted  certain  business  to 
another  as  its  agent,  and  such  person  made  the  alteration.  If  the  al- 
teration was  made  by  the  agent  while  in  the  transaction  of  the  prin- 
cipal's business,  and  in  the  scope  of  his  authority,  then  the  act  of  the 
agent  is  the  act  of  the  principal, — "qui  facit  per  alium  facit  per  se." 
The  solution  of  this  case  depends  upon  the  relation  existing  between 
Nichols  and  the  plaintiff  at  the  time  the  alteration  was  made.  If  he 
was  the  plaintiff's  agent,  and  the  act  was  within  the  scope  of  his  au- 
thority, then  his  act  must  be  deemed  the  act  of  the  plaintiff,  and  the 
law  is  with  the  defendants.  If  his  position  was  that  of  a  mere  stranger 
to  the  note,  then  the  law  is  with  the  plaintiff. 

The  appellees  rely  confidently  upon  the  case  of  Eckert  v.  Louis,  84 

3  Part  of  the  opinion  is  omitted. 


Ch.  1)  jiEFINITION   AND   NATURE    OF   THE   RELATION  '       7  I 

Ind.  99,  as  furnishing  a  rule  binding  upon  this  court,  and  as  decisive  l/\~l}-T^JULrC^ 
of  the  questions  here  involved.  The  facts  of  that  case  briefly  are  that ^^j^^^_,^/^_^  V^ 
a  note  had  been  signed  by  a  principal  and  his  surety,  and  was  by  the  ^/-  * 
principal  delivered  to  the  agent  of  the  payees.  In  a  short  time  afterA^-<? 
the  delivery  the  note  was  altered  in  a  material  respect,  by  the  person  «L_p 
.  to  whom  it  had  been  delivered.  Such  change  was  made  in  the  presence 
of  the  principal,  and  with  his  consent ;  but  the  change  was  without  the  '""V-^"-^ 
knowledge  or  consent  of  the  surety.  Suit  was  instituted  against  thc^^lIZZ  ~  ]  ~^ 
surety  alone  on  the  note  in  its  altered  condition.  The  court  held  that  ^^^  ^T^^-CcjLJi 
there  could  be  no  recovery  in  such  an  action  against  the  surety.  It  (X-jO^^ — -f— 
seems  to  us  that  the  bare  statement  of  the  facts  shows  the  correctness  /V^>t.///r7c.#.^Cc-a, 
of  the  holding.     The  note  was  changed  in  a  material  respect,  and  yet     .        /  V    ^ 

the  effort  was  to  enforce  it  in  its  altered  condition.     The  position  oc-  '^/A/        '^-^-K^ 
cupied  by  the  person  making  the  change  was  wholly  immaterial  to  the-^^J_^^^^^,^^ 
decision  of  that  case.    If  he  was  a  stranger  to  the  note,  and  his  act  a  A 

spoliation,  the  note  could  not  be  enforced  against  the  surety  in  its =- ^ 

altered  condition.  Neither  could  the  payees  enforce  the  note  in  its 
altered  condition,  if  the  person  making  the  change  was  their  agent. 
There  could  be  no  recovery  upon  the  note  in  its  altered  condition. 
What  is  said  in  that  case  on  the  subject  of  agency  is  foreign  to  the 
point  in  judgment,  and  cannot  be  deemed  authority.  Even  if  it  be  con- 
ceded that  what  is  said  in  that  case  upon  the  subject  of  agency  cor- 
rectly states  the  law  as  to  the  facts  of  that  case,  still  the  facts  there 
are  very  different  from  this  case.  There  the  agent  was  instructed  and 
directed  by  the  principal  to  collect  the  money,  or  obtain  undoubted 
security,  and  not  to  leave  until  he  had  done  so.  In  making  the  change 
the  agent's  "sole  effort  and  desire  were  to  obey  strictly  the  orders  of  the 
plaintiff  (the  payee)  which  were  *  *  *  to  collect  their  debt  or  pro- 
cure *  *  *  undoubted  security."  The  alteration  was  made  in  the 
presence  of  the  principal  debtor,  and  with  his  knowledge  and  consent. 
In  making  the  change  the  agent  was  acting  with  a  third  party  in  com- 
mercial dealings.  The  payees  sought  to  enforce  the  note  in  the  altered 
condition.  In  so  doing,  they  accepted  and  ratified  the  action  of  their 
agent,  and  made  his  act  their  own  act.  Under  such  circumstances,  it 
was  unimportant  whether  the  agent  was  acting  within  his  authority  or 
not  at  the  time  of  the  alteration.  The  subsequent  ratification  made  his 
act  the  act  of  the  payees.  Here  the  effort  is  not  to  enforce  the  note  in 
its  altered  condition,  but  in  its  original  state.  Again,  the  case  to  which 
we  have  alluded  differs  from  this  in  another  respect.  That  was  an  ac- 
tion against  a  surety,  and  a  surety  is  a  favorite  of  the  law. 

The  appellees  further  insist  that  Nichols  was  the  agent  of  the  payee 
in  making  the  alteration ;  that  he  was  acting  in  the  line  of  his  agency, 
and  under  color  of  his  employment ;  that  his  wrongful  act  is  imputable 
to  his  principal.  In  support  of  this  position  appellees'  learned  counsel 
say  this  is  upon  the  legal  maxim,  "  'Whatever  a  man  sui  juris  may  do 
of  himself,  he  may  do  by  another,'  and,  as  a  correlative,  whatever  is 


8  THE    RELATION  (Part  1 

done  by  such  other  in  the  course  of  his  employment  is  deemed  to  be 
done  by  the  party  himself.  On  this  principle  the  liability  of  one  person 
for  the  acts  of  another  who  is  employed  in  the  capacity  of  an  agent 
is  extended  to  the  wrongful  and  tortious  acts  of  the  latter  committed 
in  the  line  and  under  color  of  the  agency,  although  such  unlawful  acts 
were  not  contemplated  by  the  employment,  and  were  done  by  the  agent 
in  good  faith,  and  by  mistake.  In  other  words,  where  a  principal  di- 
rects an  act  to  be  done  by  an  agent  in  a  lawful  manner,  but  the  agent 
errs  in  the  mode  of  executing  his  authority  to  the  prejudice  of  another 
person,  the  principal  will  be  held  responsible."  This  is  a  correct  state- 
ment of  the  law.  The  same  principles  extend  to  the  relations  existing 
between  a  master  and  his  servant.  Thus,  if  the  engineer  of  a  railway 
company  negligently  run  a  train  of  cars  over  a  person  who  is  without 
fault,  the  company  is  liable  for  the  injury  caused.  The  same  doctrine 
is  applied  to  the  willful  acts  and  the  mistakes  of  agents  and  servants, 
committed  by  them  while  acting  within  the  scope  of  the  agency  or  line 
of  the  employment.  May  v.  Bliss,  22  Vt.  477 ;  Luttrell  v.  Hazen,  3 
Sneed  (Tenn.)  20;  Pennsylvania  Co.  v.  Weddle,  100  Ind.  138;  Rail- 
road Co.  V.  McKee,  99  Ind.  519,  50  Am.  Rep.  102;  Crockett  v.  Cal- 
vert, 8  Ind.  127. 

At  the  time  Nichols  made  the  alteration  of  the  note,  was  he  the  agent 
or  servant  of  the  plaintiff  in  respect  to  his  duties  pertaining  to  said 
note?  It  is  averred  that  he  was  the  traveling  salesman,  but  that  he 
was  not  a  general  agent,  and  had  no  authority  to  make  settlements  or 
take  notes  on  plaintiff's  account,  nor  was  that  any  part  of  his  duties ; 
that,  being  about  to  go  to  Lebanon  in  the  course  of  his  duties  as  such 
traveling  salesman,  the  plaintiff  instructed  him  to  procure  for  plaintiff 
from  the  defendants  a  note  on  account  of  an  indebtedness  due  from 
them  to  the  plaintiff.  But  the  averments  of  the  complaint  negativing 
the  fact  of  agency  will  not  control  if  it  appear  from  all  the  averments 
that  the  legal  relation  of  agency  exists.  The  same  person  may  be  a 
special  agent  for  the  same  principal  in  several  different  matters.  Nich- 
ols was  the  agent  of  the  plaintiff  to  sell  goods.  He  was  also  its  agent 
to  procure  the  note.  We  are  here  concerned  with  the  latter  agency 
only.  Did  his  relation  as  agent  cease  when  he  obtained  the  note,  or 
did  it  continue  until  the  note  was  delivered  to  the  plaintiff?  If  the 
agency  ceased  when  the  note  was  obtained  by  him,  what  relation  did 
he  sustain  to  the  plaintiff  in  the  interval  of  time  between  the  delivery 
to  him  and  the  delivery  to  the  plaintiff  ?  This  leads  to  the  inquiry,  who 
are  agents,  and  who  are  servants?  In  the  primitive  conditions  of 
society,  the  things  which  were  the  subjects  of  sale  and  trade  were  few 
in  number.  There  was  little  occasion  for  any  one  to  engage  in  com- 
mercial transactions,  and  when  it  did  become  necessary  the  business 
was  generally  transacted  by  the  parties  thereto  in  person.  But  the 
strong  and  powerful  had  many  servants,  who  were  usually  slaves. 
The  servants  performed  menial  and  manual  services  for  the  master. 


Ch.  1  ^  DEFINITION  AND   NATURE    OF   THE   RELATION  9 

As  civilization  advanced,  the  things  which  are  the  subjects  of  com- 
merce increased,  and  it  became  necessary  to  perform  commercial  trans- 
actions through  the  medium  of  other  persons. 

The  relation  of  principal  and  agent  is  but  an  outgrowth  or  expan- 
sion of  the  relation  of  master  and  servant.  The  same  rules  that  apply 
to  the  one  generally  apply  to  the  other.  There  is  a  marked  similarity 
in  the  legal  consequences  flowing  from  the  two  relations.  It  is  often 
difficult  to  distinguish  the  difference  between  an  agent  and  a  servant. 
This  difficulty  is  increased  by  the  fact  that  the  same  individual  often 
combines  in  his  own  person  the  functions  of  both  agent  and  servant. 
Agents  are  often  denominated  servants,  and  servants  are  often  called 
agents.  The  word  "servant"  in  its  broadest  meaning,  includes  an 
agent.  There  is,  however,  in  legal  contemplation,  a  difference  between 
an  agent  and  a  servant.  The  Romans,  to  whom  we  are  indebted  for 
many  of  the  principles  of  agency,  in  the  early  stages  of  their  laws 
used  the  terms  "mandatum"  (to  put  into  one's  hand,  or  confide  to  the 
discretion  of  another)  and  "negotium"  (to  transact  business,  or  to  treat 
concerning  purchases)  in  describing  this  relation.  Story,  Ag.  §  4. 
Agency,  properly  speaking,  relates  to  commercial  or  business  transac- 
tions, while  service  has  reference  to  actions  upon  or  concerning  things. 
Service  deals  with  matters  of  manual  or  mechanical  execution.  An 
agent  is  the  more  direct  representative  of  the  master,  and  clothed 
with  higher  powers  and  broader  discretion  than  a  servant.  Mechem, 
Ag.  §§  1,  2. 

The  terms  "agent"  and  "servant"  are  so  frequently  used  inter- 
changeably in  the  adjudications  that  the  reader  is  apt  to  conclude 
they  mean  the  same  thing.  We  think,  however,  that  the  history  of  the 
law  bearing  on  this  subject  shows  that  there  is  a  difference  between 
them.  Agency,  in  its  legal  sense,  always  imports  commercial  dealings 
between  two  parties  by  and  through  the  medium  of  another.  An  agent, 
negotiates  or  treats  with  third  parties  in  commercial  matters  for  an- 
other. When  Nichols  was  engaged  in  treating  with  the  defendants 
concerning  the  note,  he  was  an  agent.  When  the  note  was  delivered 
to  him,  it  was  in  law  delivered  to  the  plaintiff,  and  he  ceased  to  treat 
or  deal  with  the  defendants.  All  his^  duties  concerning  the  note  then 
related  to  the  plaintiff.  It  was  his  duty  to  carry  and  deliver  it  to  the 
plaintiff.  In  doing  this  he  owed  no  duty  to  the  defendants.  He  ceased 
to  be  an  agent,  because  he  was  not  required  to  deal  further  with  third 
parties.  He  was  then  a  mere  servant  of  the  plaintiff,  charged  with  the 
duty  of  faithfully  carrying  and  delivering  the  note  to  his  master. 
When  Nichols  made  the  alteration  in  the  note  he  was  the  servant,  and 
not  the  agent,  of  the  plaintiff.*     *     *     * 

Judgment  reversed. 

Davis,  C.  J.,  and  Gavin,  J.,  dissent. 

*  The  rest  of  the  opinion  i.s  an  historical  survey  of  the  relation  of  master 
and  servant.    It  is  often  said  tliat  the  distinction  between  principal  and  u;,'ent 


^■■ 


c\ 


10  THE    KELATION  (Part  1 

TAYLOR  et  al.  v.  DAVIS'  ADM'X. 

(Supreme  Court  of  the  United  States,  1884.     110  U.  S.  330,  4  Sup.   Ct.  147, 

28  L.  Ed.  163.) 

Taylor  and  Davis  were  trustees  of  the  Cairo  City  property.  Davis 
agreed  to  resign  his  trust  to  one  Parsons,  and  Taylor  and  Parsons  then 
agreed  to  pay  Davis,  out  of  the  trust  funds  as  they  should  come  into 
their  hands,  the  amount  due  him  at  the  time  of  his  resignation.  This 
they  never  did.  Davis  died,  and  his  administratrix  sues  to  hold  them 
personally  on  their  agreement.  They  claimed  to  have  acted  only  for 
the  trust  property. 

Mr.  Justice  Woods  ^  [After  stating  the  facts  and  disposing  of  a  ques- 
tion of  practice:]      *     *     *     ^  trustee  is  not  an  agent.''     An  agent 

and  master  and  servant  is  difficult  to  define.  Tlie  tvro  relations  are  essen- 
tially similar.  The  true  distinction  lies  in  the  nature  of  the  service  to  be 
performed  and  the  manner  of  its  performance.     Merritt  v.  Huber,  137  Iowa, 

^^X  135,  114  N.  W.  627  (1908).    The  distinction  is  often  said  to  be  a  question  of 

discretion ;  the  agent  having  more  or  less  discretion,  while  the  seiwant  acrs 
under  his  master's  direction  and  control.  Singer  Mfg.  Co.  v.  Rahn,  132  U. 
S.  518.  10  Sup.  Ct.  175,  33  L.  Ed.  440  (1889);  McCroskey  v.  Hamilton,  108 
Ca.  G40.  34  S.  E.  Ill,  75  Am.  St.  Rep.  79  (1899) ;  Gibson  v.  Hardware  Co.,  94 
Ala.  346,  10  South.  304  (1891),  post,  p.  19.  Occasionally  the  distinction  is  im- 
portant in  criminal  actions  under  a  penal  statute  referring  to  servants.  An 
agent  cannot  be  punished  under  such  a  statute.  Regina  v.  Walker,  8  Cox,  C. 
C.  1.  Dears.  &  B.  600,  4  Jur.  N.  S.  465,  27  E.  J.  M.  C.  207,  6  W.  R.  505  (1858). 
Independent  Contractor. — In  determining  the  liability  of  a  contractor  to 
third  persons  for  acts  or  contracts  of  a  second  person,  it  often  becomes  neces- 
sary to  determine  whether  such  second  person  dealt  with  the  third  person 
as  an  independent  contractor  or  as  the  agent  or   servant  of  the   first   con- 

"^V,^  tractor.     The  distinction  is   said  to  lie  in   this :    That  the  agent  or  servant 

^^*^  represents  the  will  of  the  employer,  while  the  independent  contractor  repre- 
sents that  will  only  as  to  the  result  of  the  work,  and  not  as  to  the  means 
whereby  it  is  accomplished.  Jensen  v.  Barbour,  15  Mont.  582,  .39  Pac.  906 
(1895),  citing  Bibb's  Adm'r  v.  N.  &  W.  R.  Co.,  87  Va.  711,  14  S.  E.  163  (1891) ; 
Brackett  v.  Lubke,  4  Allen,  138,  81  Am.  Dec.  694  (1862).  The  distinction  be- 
tween an  independent  contractor  and  an  agent  is  well  illustrated  bv  compar- 
ing Casement  v.  Brown,  148  U.  S.  615,  13  Sup.  Ct.  672,  37  L.  Ed.  582  (1893) 
(independent  contractor),  with  Railroad  v.  Hanning,  1.5  Wall.  649,  21  L.  Ed. 
220  (1872)  (agent).  See,  also.  Burns  v.  McDonald,  57  Mo.  App.  599  (1894). 
The  independent  contractor,  like  the  agent,  enters  into  business  relations  with 
third  persons,  but  on  his  own  account,  and  not,  like  the  agent,  in  behalf  of 
his  employer.  Atlas  Lumber  Co.  v.  Schenck,  2  Colo.  App.  246,  29  Pac.  1137 
(1892). 

5  Part  of  the  opinion  is  omitted. 

6  Compare  Rowe  v.  Rand.  Ill  Ind.  206,  12  N.  E.  377  (1887),  in  which  one 
who  called  himself  a  '"trustee"  was  held,  nevertheless,  to  be  an  agent,  with 
Lyle  v.  Burke,  40  Mich.  499  (1879).  where  it  was  held,  per  Cooley,  J.,  that 
an  instrument  providing  for  placing  in  the  hands  of  defendant  a  fund  for 
the  support  of  the  maker  of  the  instrument  during  life,  and  to  be  thereafter 
divided,  created  a  trust,  and  not  a  mere  agency,  revocable  by  the  maker's 
death.  In  the  former  case  the  court  said :  "A  trustee  is  one  to  whom  an  es- 
tate has  been  conveyed  in  trust,  and,  consequently,  the  holding  of  property 
in  trust  constitutes  a  person  a  trustee.  An  agent  is  one  who  acts  for,  or  in 
place  of,  another,  denominated  the  principal,  in  virtue  of  power  or  authority 
conferred  by  the  latter,  to  whom  an  account  must  be  rendered.  In  the  case 
of  an  ordinary  agency  for  the  sale  or  disposition  of  property  the  title  to  the 
property,  as  well  as  to  the  proceeds,  remains  in  the  principal."     See,   also. 


■^  "^  "^-^y^ 


Cl^l) 


DEFINITION   AND   NATURE    OF   THE   RELATION 


represents  and  acts  for  his  principal,  who  may  be  either  a  natural  or 
artificial  person.  A  trustee  may  be  defined  generally  as  a  person  in 
whom  some  estate  interest  or  power  in  or  affecting  property  is  vested 
for  the  benefit  of  another.  When  an  agent  contracts  in  the  name  of 
his  principal,  the  principal  contracts,  and  is  bound,  but  the  agent  is  not. 
When  a  trustee  contracts  as  such,  unless  he  is  bound,  no  one  is  bound, 
for  he  has  no  principal.  The  trust  estate  cannot  promise;  the  con- 
tract is  therefore  the  personal  undertaking  of  the  trustee.  As  a  trus- 
tee holds  the  estate,  although  only  with  the  power  and  for  the  purpose 
of  managing  it,  he  is  personally  bound  by  the  contracts  he  makes  as 
trustee,  even  when  designating  himself  as  such.  The  mere  use  by  the 
promisor  of  the  name  of  trustee  or  any  other  name  of  ofiice  or  em- 
ployment will  not  discharge  him.  Of  course,  when  a  trustee  acts  in 
good  faith  for  the  benefit  of  the  trust,  he  is  entitled  to  indemnify  him- 
self for  his  engagements  out  of  the  estate  in  his  hands,  and  for  this 
purpose  a  credit  for  his  expenditures  will  be  allowed  in  his  accounts 
by  the  court  having  jurisdiction  thereof.     *     *     * 

The  judgment  of  the  court  below  for  the  plaintiff,  defendant  in  er- 
ror in  this  court,  was  affirmed. 


Weer  v.  Gaud,  88  111.  490  (1878),  in  which  it  was  pointed  out  that,  while  trusty 
and  confidence  were  reposed  in  an  agent,  his  relation  to  his  principal  doe 
not  fall  under  any  recognized  class  of  trusts. 

Agency  and  Partnership. — In  the  leading  case  of  Cox  v.  Hickman, 
B.  N.  S.  47,  99  E.  C.  L.  47,  8  H.  L.  Cas.  268,  11  Eng.  Reprint  431,  7  Jur.^ 
N.  S.  105,  30  L.  J.  C.  P.  125,  3  L.  T.  Rep.  N.  S.  185,  8  AVy.  R.  754  (1860) 
it  was  laid  down  by  Lord  Wensleydale  that  the  law  of  partnership  was  a 
branch  of  the  law  of  principal  and  agent.  And  the  most  certain  test  of  part 
nership  is,  not  the  sharing  of  profits,  but  the  authority  of  each  partner  to 
act  as  principal  for  himself  and  as  agent  for  the  other  partners.  Per  Cooley, 
J.,  in  Beecher  v.  Bush,  45  Mich.  188,  7  N.  W.  785,  40  Am.  Rep.  4G5  (1881). 
But  the  ordinary  agent  is,  of  course,  not  a  partner.  It  has  sometimes  been 
urged  that  he  becomes  one  if  it  is  the  agreement  that  he  is  to  share  in  the 
profits  of  the  enterprise.  That  is  undoubtedly  true,  if  he  becomes  himself  a 
principal ;  but  he  may  still  remain  a  mere  agent,  provided  he  acts  only  for 
otliers  in  the  enterprise,  and  as  compensation  for  liis  services  receives  a  share 
of  the  profits.  The  question  is  one  of  intent,  to  be  gathered,  not  from  wliat 
the  parties  called  the  relation,  but  from  the  legal  effect  of  the  acts  and  con- 
tracts in  the  transaction.  Ellsworth  v.  Pomeroy,  2G  Ind.  158  (1866) ;  Eastman 
v.  Clark,  53  X.  H.  276,  16  Am.  Rep.  192  (1872)  (a  leading  case);  Parchen  v. 
Anderson,  5  Mont.  438,  5  Pac.  588,  51  Am.  Rep.  65  (1885)  (collecting  the  au- 
thorities). 

AciENT  AND  Lessee. — An  agent  is  sometimes  put  in  charge  of  his  principal's 
bu.'^iness  under  a  so-called  lease.  Here,  too.  the  legal  result  dejionds.  not  upon 
the  names  used  by  the  i)arties,  but  upon  the  legal  effect  of  their  acts  and 
agreements.  If  the  "lessee"  was  merely  acting  in  a  representative  cajiacity 
for  the  "les.sor."  the  relation  is  one  of  agenc.v.  State  v.  Page,  1  Speers,  408, 
40  Am.  Dec.  608  (1843).  If  the  lessee  conducts  a  business  on  his  own  ac- 
count, even  though  he  pays  as  rent  part  of  the  profits,  the  relation  is  that 
of  landlord  and  tenant.  Beecher  v.  Bush,  45  Mich.  188,  7  N.  W.  7n5,  40  .\m 
Rep.  465  (1881). 


■a^mjao- 


12  THE    RELATION  (Part  1 


TAYLOR  V.  BURNS. 

(Supreme  Court  of  Arizona,  1904.     8  Ariz.  463,  76  Pac.  623,  affirmed  in  203 
U.  S.  120,  27  Sup.  Ct.  40,  51  L.  Ed.  116.) 

Action  to  quiet  title  to  three  mining  claims.  Taylor  based  his  claim 
on  an  agreement  in  which  Burns  "sells"  to  him  the  claims  upon  condi- 
tion that,  whenever  he  shall  negotiate  and  sell  them  to  any  third  per- 
sons, he  shall  pay  to  Burns  $45,000  and  one-eighth  of  any  excess  he 
may  secure. 

Sloan,  J.^  [After  stating  the  facts:]  *  *  *  The  only  ques- 
tion involved  is  the  construction  to  be  given  the  agreement  between 
Taylor  and  Burns.  The  contention  of  the  appellant  is  that  the  agree- 
ment amounted  to  a  sale  to  him  of  the  mines  for  a  given  and  valid 
consideration  expressed  in  the  instrument.  The  contention  of  counsel 
for  the  appellees  is  that,  from  the  instrument  as  a  whole,  it  clearly 
amounts  to  nothing  more  than  a  power  of  attorney  authorizing  Taylor 
to  negotiate  the  sale  of  the  claims  upon  the  terms  stated  in  the  agree- 
ment, revocable  at  will.  Upon  the  latter  contention,  it  was  admitted 
by  the  appellant  that,  if  the  instrument  was  revocable  at  the  will  of 
Burns,  such  revocation  was  made  by  Burns  on  February  27,  1903. 

It  is  a  settled  rule  of  construction  of  instruments  of  this  character 
that  the  intention  of  the  parties  must  govern,  as  this  intention  is  evi- 
denced by  a  consideration  of  the  entire  instrument.  Williams  v.  Paine, 
169  U.  S.  76,  18  Sup.  Ct.  279,  42  L.  Ed.  658.  "The  elementary  canon 
of  interpretation  is  not  that  particular  words  may  be  isolatedly  con- 
sidered, but  that  the  whole  contract  must  be  brought  into  view  and 
interpreted  with  reference  to  the  nature  of  the  obligations  between  the 
parties,  and  the  intention  which  they  have  manifested  in  forming 
them."  O'Brien  v.  Miller,  168  U.  S.  287,  18  Sup.  Ct.  140,  42  L.  Ed. 
469. 

Tested  by  this  rule,  the  agreement  cannot  be  construed  as  a  convey- 
ance. For  a  consideration.  Burns  agreed  to  sell  upon  certain  terms  and 
conditions  expressed.  These  terms  and  conditions  were  that  Taylor 
was  empowered  and  authorized  to  sell  and  negotiate  the  mines  for  any 
price  above  $45,000;  that,  upon  such  sale  being  made,  he  should  pay 
to  Burns  $45,000  of  the  purchase  price,  and  one-eighth  of  the  excess 
of  the  purchase  price  over  and  above  $45,000,  and  that  both  parties 
should  aid  and  assist  each  other  in  the  negotiation  and  sale  of  the 
claims,  in  order  that  they  might  quickly  be  sold,  and  the  considera- 
tion realized;  and  that  further,  upon  said  sale,  Burns  should  execute 
any  deed  or  deeds  of  conveyances  that  might  be  necessary  to  convey 
a  good  title  to  the  purchaser  or  purchasers.  It  will  be  noted  that 
Taylor  was  not  obligated  to  pay  any  sum  or  sums  of  money  what- 
ever. There  is  nothing  in  the  instrument  which  would  permit  a  re- 
covery by  Burns  against  Taylor  of  any  part  of  the  purchase  price. 

7  Part  of  the  opinion  is  given  on  p.  225,  post. 


Ch.    I)  DEFINITION   AND   NATURE    OF   THE   RELATION  13 

Upon  no  theory  can  the  instrument  be  construed  as  a  sale  in  prse- 
senti.  As  an  agreement  to  sell  in  future,  it  lacks  the  essential  element 
of  mutuality,  in  that  Taylor  was  not  obligated  to  pay  the  purchase 
price,  or  any  part  of  it,  or  even  to  effect  a  sale.  Again,  the  instru- 
ment expressly  provides  that,  in  case  Taylor  should  effect  a  sale,  the 
deed  of  conveyance  should  be  made  by  Burns,  which  is  an  admission 
that  the  instrument  was  not  to  be  construed  as  divesting  Burns  of  his 
title,  and  that  a  conveyance  from  him  would  be  necessary  to  vest  his 
title  in  any  purchaser.  Not  only  does  the  contract  fail  to  vest  any 
title  in  Taylor,  but  it  does  not  contemplate  that  Taylor  should  ever 
acquire  the  title.  It  merely  provides  that  upon  the  contingency  of  a 
sale  to  another,  brought  about  by  his  efforts  or  the  joint  efforts  of 
himself  and  Burns,  Taylor  should  share  in  the  proceeds  of  such  sale. 
Taking  the  instrument  as  a  whole,  it  appears  that  it  was  intended 
merely  as  a  power  of  attorney  authorizing  Taylor  to  effect  a  sale  of 
the  mines,  upon  the  terms  mentioned,  as  the  agent  of  Burns.     *     *     * 

We  hold,  therefore,  that  the  agreement  did  not  confer  any  title  to 
or  estate  in  the  mines  in  question  upon  Taylor,  and  that  the  findings 
and  decree  of  the  trial  court  are  correct. 

The  judgment  will  be  affirmed.* 


SNELLING  V.  ARBUCKLE  BROS. 

(Supreme  Court  of  Georgia,  1S98.     104  Ga.  362,  30  S.  E.  863.) 

The  case  involved  the  construction  of  a  contract  which  Arbuckle 
Bros,  were  accustomed  to  make  with  those  who  sold  their  coffees.  The 
contract  provided,  among  other  things,  that  all  goods  consigned  re- 
main the  property  of  the  consignor  until  sold  and  paid  for,  the  con- 
signee holding  as  factor;  that  goods  shall  be  sold  only  at  the  prices 
and  terms  fixed  by  the  consignors ;  that  the  consignee  guarantees  the 
sale  of  all  coffee  consigned  and  payment  therefor  within  60  days ; 
that  he  will  remit  such  payment,  whether  the  whole  of  the  consign- 
ment is  sold  or  not ;  and  that  the  consignee  assumes  the  risk  of  any 
fall  in  price  and  the  benefit  of  any  advance. 

One  Allen  sold  coffees  under  such  a  contract.  Before  paying  for 
certain  goods  he  became  insolvent,  and  his  assignee  collected  for  the 
coffee  so  sold.    Arbuckle  Bros,  sue  the  assignee  to  recover  this  money. 

Fish,  J."  The  case  turns  upon  the  proper  legal  construction  to  be 
given  to  the  written  agreement  or  contract  between  Arbuckle  Bros, 
and   Allen.     If,  as  contended  by  the  defendants   in   error,   the  legal 

«To  the  same  effect  are  Lenz  v.  Harrison.  148  111.  r.08.  30  N.  E.  507  (1893); 
Williams  Mower  &  Reaper  Co.  v.  Ravnor,  38  Wis.  110  (1875);  Dcwes  Hrew- 
ery  Co.  v.  Morrltt,  82  Mich.  108,  40  N.  W.  379,  9  L.  R.  A.  270  (1S90) ;  Norton 
V,  Melick.  97  Iowa.  .''.Ol.  00  X.  W.  7S0  (1890). 

»  Part  of  the  opinion  is  omitted. 


14  /    THE    RELATION  (Part  1 

effect  of  the  paper  in  qudstion  is  to  create  between  the  parties  tliereto 
the  relation  of  principal  \and  factor^— the  latter  selling  the  goods  of 
the  former  under  a  del  credere ^J^fmnissi on, — then  Arbuckle  Bros,  are 
entitled  to  the  fundTnTtlie  hands  of  Allen's  assignee,  arising  from 
accounts  against  customers  to  whom  Allen  had  sold  goods  consigned 
to  him  by  the  Arbuckles.  If,  on  the  other  hand,  this  paper,  properly 
construed,  rendered  the  relation  of  the  parties  that  of  vendor  and 
purchaser,  then  Arbuckle  Bros,  were  not  entitled  to  the  proceeds  of 
these  accounts.  The  contract  is  certainly  a  very  extraordinary  one, 
and  contains  seemingly  contradictory  provisions.  Some  of  its  stipu- 
lations, if  construed  only  in  connection  with  others  of  a  kindred  na- 
ture, seem  to  indicate  the  creation  of  a  del  credere  agency.  Other 
stipulations,  taken  in  connection  with  those  which  readily  harmonize 
with  them,  clearly  show  a  contract  of  sale.  It  appears  to  have  been 
drawn  for  the  purpose  of  enabling  Arbuckle  Bros,  to  "run  with  the 
hare,  or  hold  with  the  hounds,"  according  as,  in  the  exigencies  of  a 
given  case,  their  interests  might  dictate, — on  the  one  hand,  to  hold 
Allen  absolutely  bound,  in  any  event,  to  pay  for  all  goods  shipped  to 
him  by  the  Arbuckles ;  on  the  other  hand,  in  the  event  of  his  failure 
to  pay  and  his  insolvency,  to  enable  them  to  successfully  claim  all  un- 
sold goods  in  Allen's  possession,  and  the  accounts,  or  their  proceeds, 
against  his  customers,  representing  goods  which  he  had  sold,  but  for 
which  he  had  not  paid  Arbuckle  Bros. 

The  contract  must  be  construed  in  the  light  of  all  of  its  provisions, 
and  the  legal  outcome  of  its  several  stipulations,  construed  together, 
must  control  its  classification.  The  mere  name  which  may  have  been 
given  to  it  by  the  parties  thereto  cannot  change  the  legal  effect  of  its 
stipulations.  In  Herryford  v.  Davis,  102  U.  S.  235,  26  L.  Ed.  160,  the 
supreme  court  of  the  United  States  construed  a  written  contract  be- 
tween a  car  manufacturing  corporation  and  a  railroad  company  to  be 
a  sale,  notwithstanding  the  fact  that  the  contract,  in  the  language  of 
the  court,  "industriously  and  repeatedly  spoke  of  loaning  the  cars  to 
the  railroad  company  for  hire  for  four  months,  and  delivering  them 
for  use  for  hire."  Mr.  Justice  Strong,  delivering  the  opinion  of  the 
court,  said:  "What,  then,  is  the  true  construction  of  the  contract? 
The  answer  to  this  question  is  not  to  be  found  in  any  name  which  the 
parties  may  have  given  to  the  instrument,  and  not  alone  in  any  par- 
ticular provisions  it  contains,  disconnected  from  all  others,  but  in  the 
ruling  intention  of  the  parties,  gathered  from  all  the  language  they 
have  used.  It  is  the  legal  effect  of  the  whole  which  is  to  be  sought  for. 
The  form  of  the  instrument  is  of  little  account."  See,  also.  Hays  v. 
Jordan,  85  Ga.  741,  11  S.  E.  833,  99  L.  R.  A.  ZIZ;  Cowan  v.  Manu- 
facturing Co.,  92  Tenn.  376,  21  S.  W.  663;  Manufacturing  Co.  v. 
Cole,  4  Lea,  439,  40  Am.  Rep.  20. 

Under  tha  fifth  clause  of  this  contract,  Allen  was  bound  to  remit 
to  Arbuckle  Bros.,  at  fixed  times,  the  full  price  of  each  consignment, 


lyu^^^^ix^  ^ A^UUlc^^^^y^^^ 


CIl.  1)  DEFINITION   AND   NATURE    OF   THE    RELATION  15 

without  regard  to  payments  made  to  him  by  the  customers  to  whom  he 
sold  the  goods,  or  the  terms  upon  which  he  sold  to  such  customers,  and 
without  regard  to  whether  any  sales  had  been  made  by  him  or  not ; 
and  he  was  bound,  at  such  fixed  times,  to  remit  to  the  Arbuckles  at  a 
price  fixed  by  them  to  him  at  the  time  when  the  goods  were  consigned 
to  him.  Allen's  obligation,  then,  was  radically  different  from  that  of 
a  mere  del  credere  agent ;  for  he  did  not  simply  guaranty  to  Arbuckle 
Bros,  that  the  customers  to  whom  he  sold  their  goods  on  a  credit 
should  pay  them,  through  him,  as  their  agent,  the  price  for  which  the 
goods  were  sold  to  such  purchasers,  but  he  agreed,  at  the  expiration 
of  60  days  from  each  consignment,  to  remit  to  Arbuckle  Bros,  full 
payment  for  the  entire  consignment,  regardless  of  the  question  whether 
the  goods  of  which  such  consignment  consisted  had  been  sold  by  him 
or  not.  If  none  of  the  goods  of  such  consignment  had  been  sold  by 
Allen,  he  was  just  as  much  obligated  to  pay  Arbuckle  Bros,  for  them, 
at  a  price  fixed  by  the  latter  at  the  time  of  the  consignment,  as  he 
would  have  been  if  he  had  in  fact  sold  all  of  the  goods  contained  in 
the  consignment.  In  keeping  with,  and  as  if  to  emphasize,  this  clause 
of  the  agreement,  the  tenth  clause  expressly  stipulated  that  if,  at  the 
expiration  of  60  days,  Allen  had  not  paid  for  the  goods,  the  Arbuckles 
should  have  the  right  to  draw  on  him  for  the  price  of  the  same.  What 
stronger  feature  of  a  sale  on  60  days'  time  can  there  be  than  a  stipula- 
tion which  renders  the  consignee,  from  the  moment  the  goods  are  re- 
ceived by  him,  absolutely  and  unconditionally  bound  at  the  end  of 
that  time  to  pay  for  them,  and  to  pay  for  them  at  a  price  fixed  at  the 
time  they  are  consigned? 

As  if  the  provisions  which  we  have  just  been  discussing  were  not 
enough  to  hold  Allen  bound,  under  any  and  all  circumstances,  to  pay 
for  the  goods  at  the  price  fixed  when  they  were  consigned  to  him. 
the  sixth  clause  provided  that  he  was  to  insure  Arbuckle  Bros,  against 
any  decline  in  the  price  of  the  goods.  So,  if  the  market  price  fell, 
the  loss  was  Allen's,  and  not  that  of  the  Arbuckles.  And,  as  if  to 
bialance  this  provision,  the  seventh  clause  provided  that,  if  the  goods 
advanced  in  price,  Allen  was  to  have  the  benefit  of  such  advance.  So, 
if  the  market  price  rose,  the  profit  was  Allen's,  and  not  that  of  Ar- 
buckle Bros.  Why  should  Allen  assume  the  risk  of  any  decline  in 
the  price  or  market  value  of  the  goods,  if  the  goods  belonged  to  Ar- 
buckle r»ros.  ?  Why  should  he  be  entitled  to  the  benefit  of  atiy  increase 
in  the  price  or  value  of  the  goods,  if  they  did  not  belong  to  him?  Why 
should  he  be  conij)cllcd  to  pay  for  the  goods  at  the  end  of  60  days, 
whether  he  had  sold  them  or  not,  if  he  was  simply  an  agent  to  sell  the 
goods  for  the  consignors?  These  earmarks  indicate  a  sale,  and,  taking 
them  together,  it  is  very  difficult,  notwithstanding  the  apparently  con- 
flicting provisions  of  the  instrument,  to  escape  the  conclusion  that  such 
is  the  legal  effect  of  this  contract. 


16  THE  RELATION  (Part  1 

When  we  further  consider  that  no  account  of  sales  was  to  be  ren- 
dered by  the  so-called  "factor"  to  his  alleged  principals;  that  he  was 
not  required  to  furnish  to  them  the  names  of  the  parties  to  whom  he 
sold  upon  a  credit,  and  the  terms  of  the  credit  which  he  extended,  nor 
to  report  or  transmit  to  them  the  evidences  of  indebtedness,  if  any, 
which  he  received  from  such  customers;  that,  no  matter  how  much 
cash  he  might  accumulate  from  sales  within  the  60  days,  he  was  under 
no  obligation  to  remit  it  to  them  until  the  60  days  had  elapsed,  and 
then  was  bound  to  remit  not  simply  as  a  del  credere  agent  accounting 
to  his  principals  for  the  money  of  such  principals  in  his  hands,  and 
for  the  amount  of  matured  indebtedness  against  customers  who  liad 
failed  to  meet  their  obligations,  but  to  remit  the  whole  amount  of  the 
entire  consignment;  and  that  discounts,  such  as  are  usual  in  cases  of 
sales  upon  time,  were  to  be  allowed  upon  all  bills  paid  before  the  ex- 
piration of  60  days  from  their  dates, — the  conclusion  seems  unavoid- 
able that  the  true  legal  relation  between  the  parties  to  this  agreement 
was  that  of  vendors  and  vendee.  The  stipulation  that  the  title  to  the 
goods  should  remain  in  the  Arbuckles  until  Allen  had  sold  them  is  not 
inconsistent  with  a  contract  of  sale.  It  might  make  the  sale,  as  be- 
tween the  parties,  to  that  extent  conditional.  The  seller  of  personal 
property  often  stipulates  that  the  title  thereto  shall  remain  in  him  until 
the  purchase  price  is  paid.  As  Allen  wanted  the  goods  for  the  purpose 
of  reselling  them  at  retail  to  his  customers,  if  the  stipulation  had 
gone  to  this  extent  it  would  have  seriously  hampered  his  business,  and 
caused  him  to  lose  the  benefit  of  the  60-days'  credit  extended  to  him. 

The  stipulation  in  question  may  therefore  be  treated  as  simply  an 
effort  on  the  part  of  the  vendors  to  retain  the  title  until  the  vendee 
had  either  sold  the  goods  or  paid  for  them ;  the  retention  of  title,  by 
express  provision,  ceasing  when  he  sold  the  goods,  and  by  necessary 
implication  ceasing  when  he  paid  for  them.  Nor  is  the  fact  that  Allen 
was  to  sell  the  goods  at  prices  fixed  by  Arbuckle  Bros,  necessarily 
inconsistent  with  the  idea  of  a  sale.  It  is  not  very  uncommon  in  these 
times  for  the  manufacturer  of  a  certain  article  to  endeavor  to  fix  the 
price  at  which  it  shall  be  sold  at  retail  by  the  merchants  who  purchase 
it  for  that  purpose.  This  effort  on  the  part  of  the  manufacturer  is 
doubtless  for  the  purpose  of  establishing  a  uniform  price,  applicable  to 
all  markets,  and  to  prevent  competition  between  the  retailers. 

Coming  now  to  stipulations  and  expressions  which  really  seem  to 
conflict  with  the  idea  of  a  sale,  how  futile  to  call  the  instrument  in 
question  a  "special  selling  factor  appointment,"  and,  in  its  opening 
sentence,  to  "appoint"  Allen  a  "special  selling  factor,"  when  under  its 
provisions  he  is  bound  as  a  purchaser  ?  Of  what  avail  was  it  to  intro- 
duce provisions  which,  taken  by  themselves,  indicate  the  creation  of  a 
del  credere  agency,  and  yet  to  bind  the  so-called  "factor"  to  pay  for 
the  goods,  whether  he  ever  sold  them  or  not?  Of  what  use  was  it  to 
declare  in  one  clause  that  Allen  should  never  become  a  purchaser  of 


Ch.  1)  DEFINITION   AND   NATURE    OF   THE   RELATION  17 

the  goods  consigned  to  him,  when  in  a  subsequent  clause  it  was  stipu- 
lated that  he  should  pay  for  them,  at  the  end  of  60  days,  at  a  price 
fixed  at  the  time  of  the  consignment?  The  latter  clause  annihilates 
the  former.  As  is  well  said  by  Mr.  Justice  Strong  in  Herryford  v. 
Davis,  supra,  "It  is  quite  unmeaning  for  parties  to  a  contract  to  say  it 
shall  not  amount  to  a  sale,  when  it  contains  every  element  of  a  sale, 
and  transmission  of  ownership." 

Probably  the  leading  case  among  cases  of  this  character  is  that  of 
Ex  parte  White,  6  Ch.  App.  397.  In  that  case  there  was  no  written 
contract,  but  the  course  of  dealing  between  the  parties  showed  that 
Towle  &  Co.,  who  were  cotton  manufacturers,  consigned  goods  of 
their  manufacture  to  Alfred  Nevill,  accompanied  by  a  price  list,  and 
he  sent  them  monthly  an  account  of  the  goods  which  he  had  sold, 
debiting  himself  with  the  price  specified  in  the  price  list,  not  specifying 
the  particular  contracts,  nor  giving  the  names  of  the  purchasers,  nor 
the  price  at  which,  nor  the  terms  on  which,  he  had  sold  the  goods ;  and 
in  the  next  month  he  paid  to  Towle  &  Co.  the  moneys  which  were  due 
to  them  in  respect  of  the  sales  thus  accounted  for.  He  frequently  had 
the  goods  bleached  or  dyed  before  he  sold  them,  but  gave  no  account 
to  Towle  &  Co.  of  the  expense.  In  discussing  the  nature  of  the  rela- 
tion between  the  parties  under  this  course  of  dealing,  James,  L.  J., 
said :  "The  case  seems  very  analogous  to  one  suggested  by  Mr.  De 
Gex  in  the  course  of  the  argument.  If  a  publisher  publishes  for  an 
author,  and  sells  for  the  author,  and  holds  all  the  copies  of  the  book, 
and  at  some  specified  time  has  to  return  to  the  author  an  account  of 
all  those  sold,  and  pay  for  them  at  a  price  fixed  between  the  author 
and  the  publisher,  the  publisher  being  at  liberty  to  make  his  own 
bargains  with  retail  booksellers  all  over  the  country,  it  could  never 
be  supposed  that  the  relation  of  creditor  and  debtor  or  vendor  and 
purchaser  ever  existed  between  the  author  and  the  retail  booksellers. 
I  have  not  the  slightest  doubt  that  a  great  quantity  of  'agency  busi- 
ness' is  carried  on  in  the  same  way  in  the  country,  and  that  there  are 
large  dealers  who  have  agents  in  all  the  towns  of  Great  Britain  and 
Ireland.  Possibly  they  may  say:  'We  will  give  you  the  goods.  Yon 
shall  be  the  sole  person  whom  we  supply  in  a  particular  district,  and 
we  shall  not  call  upon  you  to  pay  until  you  have  disposed  of  them. 
You  are  at  liberty  to  sell  upon  your  own  terms.  We  have  nothing  to 
do  with  the  persons  with  whom  you  deal,  but  we  look  to  you  to  pay 
at  our  trade  prices  for  the  goods  you  sell.  You  must  return  the  sales 
that  you  have  made  up  to  certain  times.  We  will  give  you  a  certain 
credit,  but  when  that  has  expired  we  look  to  you  to  pay  us  the  cash.' 
That  is  a  very  reasonable  bargain,  and  that  is  the  kind  of  bargain 
which,  in  my  opinion,  the  course  of  dealing  shows  to  have  existed  in 
this  case;  and,  if  so,  how  is  it  possible  to  say  that  the  proceeds  of 
the  sales  were  trust  moneys  in  the  hands  of  Mr.  Nevill?    Mr.  Nevill 

G0DD.1'K.&  A. — 2 


18  THE    RELATION  (Part  1 

was  not  to  pay  immediately,  and  if  he  sold  for  cash,  it  seems  to  me 
impossible  that  Towle  &  Co.  could  have  any  right  to  say:  'You  have 
sold  the  goods  for  cash.  Therefore  hand  over  the  moneys  to  us  at 
once.'  Nevill  would  have  said.:  'No;  the  bargain  between  us  is  that 
I  am  to  give  you  an  account  at  the  end  of  the  month,  and  to  pay  you 
at  the  end  of  another  month.  My  selling  for  hard  cash  does  not  alter 
the  nature  of  the  bargain  between  you  and  me,  or  entitle  you  to  call 
upon  me  to  hand  the  moneys  over  to  you,  or  to  put  the  moneys  in 
medio  and  keep  them  for  you.'  The  proceeds  of  sale  were  his  own 
moneys,  and  not  trust  moneys,  and  he  was  at  liberty  to  deposit  them 
with  a  banker,  or  deal  with  them  as  he  pleased." 

How  aptly  the  lord  justice's  illustration  of  the  impossibility  of  the 
existence  of  any  right  in  Towle  &  Co.  to  demand  the  proceeds  of  cash 
sales  from  Nevill  applies  in  the  case  at  bar !  To  such  demand  upon 
the  part  of  Arbuckle  Bros.,  Allen  could  have  replied :  "No ;  under  the 
bargain  between  us,  I  am  not  to  give  you  any  account  of  sales  at  all ; 
I  am  simply  to  pay  you  for  the  goods  at  the  end  of  sixty  days.  'My 
selling  for  hard  cash  does  not  alter  the  nature  of  the  bargain  between 
you  and  me,  or  entitle  you  to  call  upon  me  to  hand  the  moneys  over  to 
you,  or  to  put  the  moneys  in  medio  and  keep  them  for  you.'  "  In  the 
same  case  from  which  we  have  quoted,  Mellish,  L.  J.,  said :  "It  is 
quite  clear  that  Nevill,  if  he  sold  these  goods,  was  to  pay  Towle  &  Co. 
for  them,  at  a  fixed  price, — that  is  to  say,  a  price  fixed  beforehand  be- 
tween him  and  them, — and  at  a  fixed  time.  Now,  if  it  had  been  his 
duty  to  sell  to  his  customers  at  that  price,  and  to  receive  payment  for 
them  at  that  time,  then  the  course  of  dealing  would  be  consistent  with 
his  being  merely  a  del  credere  agent,  because  I  apprehend  that  a  del 
credere  agent,  like  any  other  agent,  is  to  sell  according  to  the  instruc- 
tions of  his  principal,  and  to  make  such  contracts  as  he  is  authorized 
to  make  for  his  principal ;  and  he  is  distinguished  from  other  agents 
simply  in  this :  that  he  guaranties  that  those  persons  to  whom  he  sells 
shall  perform  the  contracts  which  he  makes  with  them ;  and  there- 
fore if  he  sells  at  the  price  at  which  he  is  authorized  by  his  principal 
to  sell,  and  upon  the  credit  he  is  authorized  by  his  principal  to  give, 
and  the  customer  pays  him  according  to  his  contract,  then,  no  doubt  he 
is  bound,  like  any  other  agent,  as  soon  as  he  receives  the  money,  to 
hand  it  over  to  the  principal.  But  if  the  consignee  is  at  liberty,  ac- 
cording to  the  contract  between  him  and  the  consignor,  to  sell  at  any 
price  he  likes,  and  receive  payment  at  any  time  he  likes,  but  he  is 
bound,  if  he  sells  the  goods,  to  pay  the  consignor  for  them  at  a  fixed 
price  and  at  a  fixed  time,  in  my  opinion,  whatever  the  parties  may 
think,  their  relation  is  not  that  of  principal  and  agent.  The  contract 
of  sale  which  the  alleged  agent  makes  with  his  purchasers  is  not  a 
contract  made  on  account  of  his  principal,  for  he  is  to  pay  a  price 
which  may  be  different,  and  at  a  time  which  may  be  different,  from 
those  fixed  by  the  contract.     He  is  not  guarantying  the  performance. 


Ch.  1)  DEFINITION    AND   NATURE    OF   THE   RELATION  19 

by  the  persons  to  whom  he  sells,  of  their  contract  with  him,  which  is 
the  proper  business  of  a  del  credere  agent ;  but  he  is  to  undertake  to 
pay  a  certain  fixed  price  for  those  goods,  wholly  independent  of  what 
the  contract  may  be  which  he  makes  with  the  person  to  whpm  he 
sells ;  and  my  opinion  is  that,  in  point  of  law,  the  alleged  agent  in  such 
a  case  is  making  on  his  own  account  a  contract  of  purchase  with  his 
alleged  principal,  and  is  again  reselling."  This  decision  was  affirmed 
by  the  house  of  lords,  sub  nom.  Towle  v.  White,  21  Wkly.  Rep.  465. 

We  have  quoted  at  some  length  from  this  case,  because  it  has  been 
regarded  as  very  high  authority  by  the  courts  in  this  country,  and 
has  been  often  cited  and  followed.  While  there  were  some  features 
indicating  a  sale  in  that  case  which  are  not  in  the  present  one,  we  re- 
gard the  features  in  this  case  which  indicate  a  sale,  taken  all  together, 
as  being  really  stronger  than  those  of  a  similar  character  in  the  case 
decided  by  the  English  court.  We  think  that  the  single  fact,  in  the 
case  at  bar,  that  Allen  was  bound  to  pay  for  all  goods  which  he  re- 
ceived from  the  Arbuckles,  whether  he  ever  sold  them  or  not,  out- 
weighs any  facts  indicating  a  sale  in  that  case  which  are  not  found  in 
this  one.^**     *     *     * 

Judgment  for  plaintiffs  below  reversed. 


GIBSON  V.  SNOW  HARDWARE  CO. 

(Supreme  Court  of  Alabama,  1891.     94  Ala.  340,  10  South.  304.) 

Action  against  Mrs.  Gibson  on  account  for  hardware  sold  upon 
the  order  of  her  son,  John  Brady,  for  use  upon  a  building  constructed 
for  her  by  one  Allen.  The  evidence  showed  that  she  had  allowed 
him  to  purchase  other  material  for  her  and  that  she  had  paid  for  it. 
Mrs.  Gibson  denied  that  he  was  her  general  agent,  or  was  ever  au- 
thorized to  make  the  purchases  for  her. 

McClkllan,  J.^^  [after  passing  upon  various  questions  of  evidence 
and  charges]   held:     *     *     *     Nor  was  there  error  in  excluding  the 

10  In  iiassiiij;  upon  a  .similar  contract  in  Arbucklo  v.  (Jates,  i)o  Va.  802,  30 
S.  E.  49t;  (]89Sj,  the  court  .said:  "The  aj^reement  was  an  attempt  to  accom- 
plish that  which  cannot  be  done:  To  make  a  sale  of  personal  property,  and 
at  the  same  time  to  constitute  the  bu.ver  simply  an  agent  of  the  seller  to 
hold  the  property  until  it  is  paid  for.  The  two  things  are  incompatible  and 
cannot  coexist.  The  agreement  had  in  it  every  element  of  sale.  It  was,  in 
substance  and  effect,  a  sale,  and  must  be  so  declared.  It  does  not  matter  by 
what  name  the  i)arties  diose  to  dcsiguale  it.  'J'hat  does  not  determine  its 
cliaracter.  Tlie  courts  look  l^eyond  mere  names,  and  within,  to  see  tlie  re;il 
nature?  of  an  agreement,  and  determine  from  all  its  provisions  taken  together, 
and  not  from  the  name  that  has  lieen  given  to  it  by  the  parties,  or  from  some 
isolated  jirovision,  its  legal  character  and  effect."  The  court  then  reviewed 
and  discriminated  the  jirincipal  cases  on  the  subject.  An  elaborate  discu.s- 
sion  is  also  to  be  found  in  Arl)uck]e  v.  Kirkpatrick,  98  Tenn.  221,  .39  S  W.. 
3,  36  L.  R.  A.  285,  GO  Am.   St.  Rep.  .S;j4  (1S97). 

1 1  Part  of  the  opinion  is  omitted. 


l/> 


t^| 


THE  .  RELATION  (Part  1 

testimony  of  Mrs.  Gibson  to  the  effect  that  she  had  paid  Allen  for 
the  material  charged  in  the  account  sued  on.  That  fact  could  exert 
no  influence  on  this  case  in  any  aspect.  If  Brady  was  her  agent,  and 
had  authority  to  bind  her  to  the  payment  of  the  account  to  the  J.  Snow- 
Hardware  Company,  palpably  payment  by  her  to  Allen  or  anybody 
else  would  not  avoid  her  liability  to  plaintiff;  and,  if  Brady  was  not 
her  agent,  she  would  not  be  liable  to  plaintiff,  whether  she  had  paid  to 
Allen  or  not.  The  inquiry  was  foreign  to  the  case,  and  properly 
eliminated  from  it. 

Agencies  are  of  three  classes, — universal,  general,  and  special.  "A 
universal  agent  is  one  authorized  to  transact  all  of  the  business  of 
his  principal  of  every  kind;  a  general  agent  is  one  who  is  employed 
to  transact  all  of  the  business  of  his  principal  of  a  particular  kind  or  in 
a  particular  place;  a  special  agent  is  one  authorized  to  act  only  in  a 
specific  transaction."  Mechem,  Ag.  §  6;  1  Amer.  &:  Eng.  Enc.  Law, 
p.  348  et  seq.  "A  special  agency  properly  exists  when  there  is  a  dele- 
gation of  authority  to  do  a  special  act."  Story,  Ag.  §  17.  "A  special 
agent  is  one  authorized  to  do  one  or  two  special  things."  1  Ross, 
Cont.  41.  "A  special  agent  is  appointed  only  for  a  particular  pur- 
pose, and  is  invested  with  limited  powers."    Chit.  Cont.  285. 

In  the  case  at  bar  there  was  not  only  the  declaration  of  Brady  that 
he  was  Mrs.  Gibson's  general  agent,  but  other  evidence  from  which 
the  jury  might  have  inferred  that  he  represented  her  generally  in  mak- 
ing purchases,  or,  at  least,  that  he  was  her  agent  for  all  purposes  in 
respect  of  the  opera-house,  including  the  making  of  the  contract  with 
Allen,  the  purchasing  of  material,  the  supervision  of  the  work,  chang- 
ing of  plans,  and  specifications,  etc.  This  would,  in  our  opinion,  con- 
stitute him  her  general  agent  with  respect  to  that  enterprise,  if  the 
jury  found  the  facts  in  line  with  these  tendencies  of  the  evidence, 
having  authority  to  do,  not  "one  or  two  special  things,"  not  "a.  single 
act"  merely,  but  all  acts  necessary  to  the  consummation  of  the  enter- 
prise in  hand.  And  the  court's  charge  to  the  jury  at  plaintiff's  in- 
stance, that  one  who  deals  with  a  general  agent  is  not  bound  to  in- 
quire as  to  the  extent  of  his  authority  with  respect  to  the  matter  of 
the  agency,  and  that,  "if  the  plaintiffs  show  that  John  Brady  was  Mrs. 
Gibson's  general  agent  in  building  the  opera-house,  they  [it]  would 
have  a  right  to  deal  with  him  in  regard  to  matters  connected  with  the 
opera-house,  without  inquiring  the  exact  extent  of  his  authority," 
was  pertinent  to  the  evidence  adduced,  and  a  correct  exposition  of  the 
law  applicable  to  it.  Coffin  Co.  v.  Stokes,  78  Ala.  372;  Mechem,  Ag. 
§§  283-287.12     *     *     * 

Reversed  for  errors  in  admission  of  evidence. 

12  See,  also,  Pacific  Biscuit  Co.  v.  Dugger,  40  Or.  362,  67  Pac.  32  (1901), 
post,  p.  842,  and  compare  Farmers'  &  Mechanics'  Bank  v.  Butchers'  &  Drovers' 
Bank,  16  N.  Y.  125,  148,  69  Am.  Dec.  678  (1857),  post,  p.  334,  dissenting  opin- 
ion of  Comstock,  J.    For  full  discussion,  see  post,  p.  342  ff. 

General  and  Special  Agents. — It  has  often  been  said  that  the  terms  "gei> 


Ch.  1)  DEFINITION   AND   NATUEE   OF   THE   RELATION  21 

eral"  and  "special"  mark  a  difference  in  degree,  rather  than  in  kind,  and  that 
the  distinction  is  not  often  clear.  Most  agents  are  general,  but  act  more  or 
less  under  special  limitations  upon  their  authority.  See  post,  p.  342.  In 
Springtield  Engine  Co.  v.  Kennedy,  7  Ind.  App.  502,  34  N.  E.  856  (1893), 
the  court  says :  "The  terms  -general  agent'  and  'special  agent'  are  relative. 
An  agent  may  have  power  to  act  for  his  principal  in  all  matters.  He  is  then 
strictly  a  general  agent.  He  may  have  power  to  act  for  him  in  particular 
matters.  He  is  then  a  special  agent.  But  within  the  scope  of  such  particular 
matters  his  power  may  be  general,  and  with  reference  thereto  he  is  a  gen- 
eral agent."  In  discussing  the  question  in  Cross  v.  Atchison,  T.  &  S.  F.  R. 
Co.,  141  Mo.  132,  42  S.  W.  675  (1897),  the  court  said  that  the  distinction  in 
the  books  between  general  and  special  agencies  was  sometimes  very  unsatis- 
factory. It  marks,  not  a  diversity  of  the  principles  governing  the  principal's 
liability,  but  merely  adjusts  the  actual  measure  of  it.  But  compare  Butler 
V.  Maples,  9  Wall.  766,  19  L.  Ed.  822  (1S69),  in  which  it  was  held  that  "the 
distinction  between  the  two  kinds  of  agencies  is  that  the  one  is  created  by 
power  given  to  do  acts  of  a  class,  and  the  other  by  power  to  do  individual 
acts  only";  i.  e.,  whether  an  agency  is  general  or  special  is  dependent  on 
whether  the  agent  is  empowered  to  do  acts  of  a  class,  or  only  individual  acts, 
and  it  is  quite  independent  of  whether  the  authority  is  limited  and  restricted, 

Universal  Agent.— It  may  well  be  doubted  whether  there  is  such  a  thing_^  ^4/"rr2A--<^ 
as  a  universal  agent.     In  Wood  v.  McCain,  7  Ala.  800,  42  Am.  Dec.  612  (1S45),         ^  QjendUU^ 

the  court,  in  discussing  the  power  of  an  agent,  left  in  charge  of  his  priuci-^rX/^       / 
pal's  business  during  the  absence  of  his  principal  from  the  state,  to  assign  ,     U./x^^t.^^JL^ 

his  book  accounts  to  a  creditor,  said,  per  Collier,  C.  J.:  "The  precise  lan-(V  ^/U-''^-*-*^^'--'"— C 
guage  employed  in  the  bill  of  exceptions,  is  this:  'Stedman  visited  North  {) 
Carolina  and  left  Wm.  A.  Eevis  his  general  agent,  or  agent  generally  (said 
Revis  having  no  written  authority),  to  transact  his  business  in  this  State; 
that  he  delivered  up  his  books  and  accounts  for  medical  services  to  said  agent 
(including  the  account  against  garnishee)  for  settlement,  and  that  said  agency 
was  advertised  and  generally  known  in  the  neighborhood.'  It  is  supposed  by 
the  counsel  for  the  plaintiff  in  error,  that  as  Revis  was  the  general  agent  of 
his  principal,  it  must  be  presumed  he  was  authorized  to  make  the  assignment 
in  question.  This  conclusion  is  by  no  means  a  necessary  sequence  from  the 
premises.  General,  are  clearly  distinguishable  from  universal  agents,  that 
is  from  such  as  may  be  appointed  to  do  all  the  acts,  which  the  principal  can 
personally  do,  and  which  he  may  lawfully  delegate  the  power  to  another  to 
do.  'Such  an  universal  agency  may  potentially  exist;  but  it  must  be  of  the 
very  rarest  occurrence.  And,  indeed  it  is  difficult,'  says  Mr.  Justice  Story, 
'to  conceive  of  the  existence  of  such  an  agency,  inasmuch  as  it  would  be  to 
make  such  an  agent  the  complete  master,  not  merely  dux  facti,  but  dominus 
rerum,  the  complete  disposer  of  all  the  rights  and  property  of  the  principal.' 
Such  an  unusual  authority  will  never  be  inferred  from  any  general  expres- 
sions, however  broad,  but  the  law  will  restrain  them  to  the  particular  busi- 
ness of  the  party,  in  respect  to  which,  it  is  presumed,  his  intention  to  dele- 
gate the  authority  was  principally  directed.  Thus,  if  a  merchant  in  view  of 
his  temporary  absence,  should  delegate  to  an  agent  his  full  and  entire  au- 
thority to  sell  his  personal  property,  to  buy  any  property  for  him,  or  on  his 
account,  or  to  make  any  contracts,  or  to  do  any  other  acts  whatsoever,  which 
he  could  do  if  personally  present — these  general  terms  would  be  limited  to 
buying  or  selling,  connected  with  his  ordinary  business  as  a  merchant;  and 
without  some  more  specific  designation,  would  not  be  construed,  to  apply  to 
a  sale  of  his  household  furniture,  or  library,  or  the  utensils,  provisions,  and 
other  necessaries  used  in  his  family.  Story's  Ag.  20,  21.  The  difference  be- 
tween a  general  and  special  agent,  is  said  to  be  this:  The  former  is  ap- 
pointed to  act  in  the  affairs  of  his  principal  generally,  and  the  latter  to  act 
concerning  some  particular  object.  In  the  former  case,  the  principal  will  be 
bound  by  the  acts  of  his  agent,  within  the  scope  of  the  general  authority  con- 
ferred on  biin,  although  those  acts  are  violative  of  bis  private  instructions 
and  directions.  In  the  latter  case,  if  the  agent  exceeds  the  special  authority 
conferred  on  him,  the  principal  is  not  bound  liy  his  acts.  Id.  114;  Paley  on 
Ag.  199;    Munn  v.  Commission  Co.,  15  Johns.  44,  54,  8  Am.  Dec.  219." 

Compare  Gulick  v.  Grover,  .33  N.  J.  Law,  463,  97  Am.  Dec.  728  (1868)  (in 


THE    KELATION  (Parti 

CHAPTER  II 
THE  PARTIES  TO  THE  RELATION 


SECTION  1.— WHO  MAY  ACT  AS  PRINCIPAL 


CALEY  V.  MORGAN. 

(Supreme  Court  of  Iiuliaua,  1887.    114  Ind.  350,  16  N.  E.  790.) 

Action  by  Caley  to  quiet  title  to  forty  acres  of  land  of  which  he 
was  in  possession  and  claimed  to  be  the  owner.  Cross-complaint  by 
Morgan  setting  up  claim  of  title  and  demanding  that  it  be  quieted. 
Caley  claimed  by  conveyance  direct  from  one  Lucas;  Morgan,  upon 
a  sheriff's  sale  antedating  the  conveyance  to  Caley,  upon  a  judgment 
entered  by  confession  by  Lucas  in  favor  of  one  Hendrix.  This  judg- 
ment was  assigned  to  Morgan  by  one  IMilligan,  acting  under  a  power 
of  attorney  from  Hendrix. 

NiBLACK,  J.^  [After  stating  the  facts  and  holding  that  the  judg- 
ment by  confession  was  effective  and  valid:]  *  *  *  It  is  next 
claimed  that  authority  to  assign  a  judgment  cannot  be  conferred  by  a 
power  of  attorney,  and  that,  at  all  events,  the  power  of  attorney  from 
Hendrix  to  Milligan  was  inoperative,  because  it  was  not  recorded  in 
some  record  in  the  recorder's  office  of  Huntington  county.  Any  per- 
son capable  of  transacting  his  own  business  may  appoint  an  agent  to 
act  in  his  behalf  in  all  the  ordinary  affairs  of  life.  In  many  cases  the 
appointment  may  be  by  parol  only,  but  may,  in  any  case,  be  in  writ- 
ing. For  some  purposes  the  appointment  must  be  by  a  letter  or  power 
of  attorney,  which  makes  the  agent  an  attorney  in  fact.  A  person  thus 
appointed,  however,  is  none  the  less  the  mere  agent  of  the  person 
appointing  him.  Story,  Ag.  p.  2,  §  3 ;  Ewell's  Evans,  Ag.  1 ;  Roehl 
V.  Haumesser.  114  Ind.  311,  15  N.  E.  345,  (No.  13,062.)  A  power  of 
attorney  is  valid  as  between  the  parties,  and  for  all  ordinary  purposes, 
without  being  recorded.  It  is  only  when  notice  to  third  parties  is 
requisite  that  the  recording  of  a  power  of  attorney  becomes  material. 
There  was,  consequently,  nothing  in  the  facts,  as  the  court  found  them, 

NA'hieh  a  wife,  having  full  authority  for  her  husband  in  business  matters,  was 
held  not  to  be  a  univei'sal  agent  with  power  to  indorse  accommodation  paper 
in  his  name),  with  Barr  v.  Schroeder.  32  Cal.  609  (1867)  (which  holds,  though 
it  was  not  necessary  to  a  decision,  that  an  agent  having  similar  power  as  to 
his  principal's  property,  was  a  universal  agent). 
1  Part  of  the  opinion  is  omitted. 


Ch.  2)  THE   PARTIES   TO   THE   RELATION  23 

which  restrained  Hendrix  from  constituting  Milligan  his  attorney  in 
fact  to  sell  and  assign  his  judgment  against  Lucas,  or  which  invalidat- 
ed ]\Iilligan's  assignment  of  the  judgment  to  Alorgan.     *     *     * 
The  judgment  is  affirmed,  with  costs. 


DAVIS  V.  LANE. 

(Superior  Court  of  Judicature  of  New  Hampshire,  1S39.     10  N.  H.  156.) 

Plaintiff's  intestate  held  a  note  for  $50  against  Lane.  Foss'  wife 
had  been  his  general  agent,  transacting  all  his  business.  On  the  day 
of  his  death,  when  he  was  wholly  senseless  and  beyond  hope  of  re- 
covery, she  gave  this  note  to  one  Prescott,  to  whom  deceased  owed 
$46.  Lane  paid  the  note  to  Prescott,  and  the  administrator  now  sues 
to  recover  the  amount  of  the  note. 

Parker,  C.  J.2  *  *  *  There  is  no  pretence  that  a  wife,  as  such, 
has  any  authority  to  dispose  of  the  husband's  goods,  or  adjust  his  af- 
fairs, by  reason  of  his  incapacity  to  transact  business. 

But  it  is  contended,  in  this  case,  that  the  wife  having  had  a  gen- 
eral power  to  transact  business  for  her  husband  previous  to  his  illness, 
nothing  but  an  express  revocation  of  that  power,  or  some  occurrence 
which  divests  and  transmits  the  property,  as  death,  or  bankruptcy, 
will  terminate  her  authority  to  act  as  the  agent  of  her  husband,  and 
that  she  therefore  might  well  dispose  of  the  note  in  question,  notwith- 
standing her  husband  was  utterly  insensible  and  incapable  of  any 
volition  whatever,  and  this  well  known  to  her  and  to  Prescott,  to 
whom  she  passed  it,  and  notwithstanding  he  continued  in  that  state 
until  his  decease. 

The  authorities  show  that  the  death  of  the  constituent  terminates 
the  authority,  unless  the  power  is  coupled  with  an  interest  so  that 
it  may  be  executed  in  the  name  of  the  agent.  Harper  v.  Little,  2 
Greenl.  18,  11  Am.  Dec.  25  ;  Hunt  v.  Rousmaniere's  Admr.,  2  Mason's 
R.  244,  Fed.  Cas.  No.  6,898;  Id.,  8  Wheat.  174,  5  L.  Ed.  589;  Wat- 
son V.  King,  4  Camp.  274;  2  Livermore  on  Agency,  302.  So  bank- 
ruptcy, on  his  part,  operates  as  a  revocation.  Parker  v.  Smith,  16 
East's  R.  386.  So  marriage  of  a  single  woman  terminates  a  power  to 
confess  a  judgment  in  her  behalf.  Anonymous,  1  Salk.  399;  2  Liver- 
more  on  Agency,  307. 

In  all  these  cases  an  end  is  put  to  the  power  of  the  principal  to  act ; 
and,  moreover,  the  operation  of  law  transfers  the  estate,  upon  which 
the  power  might  operate,  to  the  custody  and  control  of  others.  In 
this  latter  respect  these  cases  are  unlike  the  one  before  us;  and  no 
authority  has  been  cited,  or  found,  which  will  directly  settle  the  present 
case. 

2  Tlie  rest  of  the  opinion  is  on  page  2S2. 


24  THE  RELATION  (Part  1 

We  are  of  opinion,  however,  that  the  authority  of  the  agent,  where 
the  agency  is  revocable,  must  cease,  or  be  suspended,  by  an  act  of 
Providence  depriving  the  constituent  of  all  mind  and  ability  to  act  for 
himself,  and  that  this  doctrine  can  be  sustained  by  very  satisfactory 
principles. 

An  authority  to  do  an  act,  for,  and  in  the  name  of,  another,  pre- 
supposes a  power  in  the  individual  to  do  the  act  himself,  if  present. 
The  act  to  be  done  is  not  the  act  of  the  agent,  but  the  act  of  the  prin- 
cipal ;  and  the  agent  can  do  no  act  in  the  name  of  the  principal  which 
the  principal  might  not  himself  do,  if  he  were  personally  present.  The 
principal  is  present  by  his  representative,  and  the  making  or  execution 
of  the  contract,  or  acknowledgment  of  a  deed,  is  his  act,  or  acknowl- 
edgment.    *     *     * 


MacFARLAND  v.  HEIM. 

(Supreme  Court  of  Missouri,  1894.     127  Mo.  327,  29  S.  W.  1030,  48  Am.  St. 

Rep.  629.) 

Action  against  a  guarantor  of  a  lease  of  land  belonging  to  Mrs. 
MacFarland,  and  described  "as  her  general  estate."  Her  husband  had 
acted  for  her  in  making  out  the  lease,  and  he  and  a  janitor,  Harding, 
for  her  had  secured  Heim's  signature  as  guarantor  of  the  lease.  Judg- 
ment for  defendant. 

Sherwood,  J.^  [After  passing  upon  the  consideration  for  the  guar- 
anty and  holding  there  had  been  no  assumption  by  Heim  of  any  legal 
liability:]  *  *  *  But  the  trial  court  erred  in  holding  and  instruct- 
ing that  Mrs.  MacFarland  (not  being  seised  of  an  equitable  separate 
estate)  could  have  any  agent,  either  in  Harding  or  in  her  husband,  to 
bind  her  by  any  act  of  theirs,  or  that  she  could  ratify  their  void  acts. 
A  void  act  is  incapable  of  ratification.  It  is  impossible  to  understand 
what  is  meant  by  the  words  "general  estate,"  of  which  it  is  said  Mrs. 
MacFarland  was  seised.  It  suffices,  for  the  present  purpose,  that  it  is 
stated  in  the  record  that  it  was  not  her  "equitable  separate  estate." 

It  is  among  the  fundamentals  of  the  common  law  that  a  married 
woman  is  incapable  of  contracting,  and  her  supposed  contracts  are 
void.  This  is  still  the  law,  except  where  statutory  modifications  have 
occurred.  If  thus  incapable  of  contracting,  then  incapable,  also,  of 
authorizing  another  to  contract  for  her;  for  this  would  be  to  make 
the  stream  rise  higher  than  its  fountain  head.  Story  says :  "  *  *  * 
Every  person,  therefore,  of  full  age,  and  not  otherwise  disabled,  has  a 
complete  capacity  for  this  purpose.  But  infants,  married  women, 
idiots,  lunatics,  and  other  persons  not  sui  juris  are  either  wholly  or 
partially  incapable  of  appointing  an  agent.  Idiots,  lunatics,  and  other 
persons  not  sui  juris  are  wholly  incapable;  and  infants  and  married 

3  Part  of  opinion  is  omitted. 


Ch.  2)  THE   PARTIES   TO   THE   RELATION  25 

women  are  incapable,  except  under  special  circumstances.  *  *  * 
So  in  regard  to  married  women,  ordinarily,  they  are  incapable  of 
appointing  an  agent  or  attorney.  *  *  *  With  regard  to  her  sep- 
arate property,  she  may,  perhaps,  be  entitled  to  dispose  of  it,  or  to 
incumber  it,  through  an  agent  or  attorney,  because  in  relation  to  such 
separate  property  she  is  generally  treated  as  a  feme  sole.  I  say,  'per- 
haps' ;  for  it  may  admit  of  question,  and  there  do  not  seem  to  be  any 
satisfactory  authorities  directly  on  the  point."  Story,  Ag.  (9th  Ed.) 
§  6.  A  similar  doubt  has  been  elsewhere  intimated.  Weisbrod  v. 
Railway  Co.,  18  Wis.,  loc.  cit.  40,  86  Am.  Dec.  743,  and  cases  cited. 

In  this  state,  however,  it  has  long  been  steadily  maintained  that  a 
feme  covert,  as  to  her  separate  estate  in  equity,  is  a  feme  sole  (Turner 
V.  Shaw,  96  Mo.,  loc.  cit.  28,  8  S.  W.  897,  9  Am.  St.  Rep.  319,  and 
cases  cited) ;  and  therefore  may  charge  her  separate  estate,  and  make 
an  agent  in  regard  thereto,  to  all  intents  and  purposes  as  if  she  had 
never  passed  sub  jugum  matrimonii.  But,  where  she  is  not  thus 
seised,  we  have  held,  over  and  over  again,  that,  not  being  sui  juris,  of 
course  she  could  not  appoint  an  agent.  Wilcox  v.  Todd,  64  Mo.  388 ; 
Hall  V.  Callahan,  66  Mo.  316;  Silvey  v.  Summer,  61  Mo.  253;  Henry 
V.  Sneed,  99  Mo.  407,  12  S.  W.  663,  17  Am.  St.  Rep.  580;  Flesh  v. 
Lindsay,  115  Mo.  1,  21  S.  W.  907,  37  Am.  St.  Rep.  374;  Mueller  v. 
Kaessmann,  84  Mo.  318. 

Counsel  for  defendant,  however,  make  citation  of  Mead  v.  Spal- 
ding, 94  Mo.,  loc.  cit.  48,  6  S.  W.  384,  as  asserting  a  contrary  doctrine, 
and  so  it  does,  for  it  is  there  broadly  asserted  that  "there  can  be  no 
doubt  but  the  husband  may  be  the  agent  of  the  wife."  The  two  cases 
cited  from  our  own  Reports  do  not  sustain  that  position,  because  the 
first  one  was  one  where  the  land  of  the  wife,  the  proceeds  of  which 
she  brought  suit  for,  was  "her  sole  and  separate  property."  Eystra 
v.  Capelle,  61  Mo.  578.  The  second  one  cited  is  Rodgers  v.  Bank, 
69  Mo.  560,  where  the  subject  of  the  suit  was  the  wife's  money  ac- 
quired by  her  under  the  married  woman's  act  of  1875  (section  3296, 
Rev.  St.  1879),  But  that  section  authorizes  the  wife  to  appoint  her 
husband  as  her  agent  for  the  disposition  of  her  personal  property,  pro- 
vided the  authority  be  in  writing,  and  we  have  expressly  held  that,  in 
regard  to  that  section,  a  married  woman,  respecting  her  personal  prop- 
erty held  under  its  provisions,  is  a  feme  sole.  Blair  v.  Railroad  Co., 
89  Mo.,  loc.  cit.  391,  1  S.  W.  350.  We  therefore  decline  to  follow  the 
ruling  in  Mead  v.  Spalding. 

On  account  of  the  reasons  expressed  in  a  prior  part  of  this  opinion, 
the  error  mentioned  is  a  harmless  one,  and,  when  this  is  the  case,  such 
error  in  giving  erroneous  instructions  constitutes  no  ground  for  re- 
versal. Fitzgerald  v.  Barker,  96  Mo.  loc.  cit.  666,  10  S.  W.  45,  9  Am. 
St.  Rep.  375;  Brobst  v.  Brock,  10  Wall.  519,  19  L.  Ed.  1002.  There- 
fore judgment  affirmed.    All  concur. 


26  THE  RELATION  (Part  1 

WILLIAMS  V.  SAPIEHA". 

(Supreme  Court  of  Texas,  1901.    94  Tex.  430,  61  S.  W.  115.) 

Brown,  J.  The  Court  of  Civil  Appeals  for  the  First  District  has  cer- 
tified to  this  court  the  following  statement  and  questions : 

"In  this  cause,  now  pending  before  this  court  on  motion  for  rehear- 
ing, we  respectfully  certify  for  your  decision  the  questions  hereinafter 
set  out.    The  facts  are  as  follows : 

"T.  D.  Mason,  by  his  guardian,  brought  this  suit  to  remove  cloud 
from  his  title  to  certain  lands,  alleging  title  in  himself.  The  instru- 
ments which  are  alleged  to  constitute  the  cloud  are  a  power  of  attor- 
ney purporting  to  have  been  executed  by  T.  D.  Mason  to  one  J.  W. 
Tolson,  and  a  deed  from  Tolson  to  the  appellee,  Sapieha,  conveying 
the  land  in  question.  Mason  seeks  to  have  both  annulled  on  the  ground 
that  he  was  an  imbecile  at  the  date  of  their  execution.  Mason  acquired 
the  land  through  the  will  of  his  deceased  grandfather,  the  tract  being 
devised  to  him  and  his  brother,  D.  O.  Mason,  as  tenants  in  common. 
On  6th  day  of  July,  1878,  T.  D.  Mason  executed  and  delivered  to 
J.  W.  Tolson  a  power  of  attorney,  whereby  Tolson  was  authorized,  as 
his  attorney  in  fact,  to  sell  his  interest  in  the  land,  and  to  make  a  deed 
to  the  purchaser.  This  instrument  was  duly  signed  and  acknowledged 
by  him,  and  was  promptly  placed  of  record  in  the  county  where  the 
land  was  situated.  On  the  19th  day  of  March,  1879,  Tolson,  as  such 
attorney  in  fact,  executed  and  delivered  to  the  appellee,  Sapieha,  a 
deed  conveying  the  entire  tract  of  land ;  D.  O.  Mason,  the  brother  of 
T.  D.  Mason,  joining  in  such  deed,  and  thereby  conveying  his  interest 
also.  Appellee  paid  a  fair  and  adequate  price  for  the  land,  the  deed 
reciting  the  amount,  and  its  payment,  and  the  transaction  was  in  all 
respects  fair  and  open.  At  the  date  of  the  execution  of  the  power  of 
attorney,  T.  D.  Mason  was  about  35  years  old,  and  the  undisputed  evi- 
dence shows  that  he  was  at  that  time,  had  been  from  his  birth,  and  was 
at  the  date  of  the  trial,  an  imbecile,  without  mental  capacity  to  manage 
his  affairs,  and  that  on  that  account  he  was  without  mental  capacity 
to  contract  at  the  dates  of  the  two  instruments  above  named.  Sapieha 
had  no  knowledge  or  notice  of  Mason's  mental  condition,  and  dealt 
with  Tolson  without  knowledge  of  any  fact  which  should  have  led  him 
to  inquire  as  to  the  mental  condition  of  T.  D.  Mason.  T.  D.  Mason 
had  never  been  under  guardianship  at  the  date  of  these  transactions, 
and  had  never  been  judicially  declared  of  unsound  mind.  A  guardian 
was  first  appointed  for  him  in  1891. 

'Tn  the  absence  of  opposing  testimony,  we  find,  as  did  the  trial 
court,  that  T,  D.  Mason  received  the  consideration  paid  by  Sapieha 
for  his  interest  in  the  land.  Wade  v.  Love,  69  Tex.  524,  7  S.  W. 
225.  Notwithstanding  the  pleadings  of  appellant  set  up  the  power  of 
attorney  and  deed  which  he  assails,  no  ofifer  is  made  to  return  the 


Ch.  2)  THE    PARTIES   TO    THE    RELATION  27 

consideration,  nor  was  it  shown  that  the  appellee  could  be  placed  in 
statu  quo. 

"The  questions  propounded  are:  (1)  Is  the  power  of  attorney  from 
T.  D.  Mason  to  Tolson  void  as  against  the  appellee,  the  principal  being 
non  compos  mentis  at  the  date  of  its  execution?  (2)  If  only  voidable, 
will  the  appellant  be  permitted  to  rescind  the  power  of  attorney  and 
deed  made  in  pursuance  thereof,  in  the  absence  of  an  offer  to  return 
the  purchase  price,  or  otherwise  place  the  purchaser  in  statu  quo  ? 

"In  disposing  of  this  appeal  this  court,  in  view  of  expressions  in 
Cummings  v.  Powell,  8  Tex.  81;  Askey  v.  Williams,  74  Tex.  294,  11 
S.  W.  1101,  5  L.  R.  A.  176,  and  other  Texas  cases,  treated  the  deed 
to  Sapieha  as  if  it  had  been  made  by  Mason  in  person;  and  held  the 
power  of  attorney,  as  well  as  the  deed,  voidable  only.  The  question 
seems  not  to  have  been  directly  decided  in  this  state,  and  we  therefore 
certify  the  above  questions.  Your  attention  is  called  to  valuable  notes 
in  16  Eng.  Rul.  Cas.  735,  6  Eng.  Rul.  Cas.  54,  and  Swafford  v.  Fergu- 
son, 3  Lea,  292,  31  Am.  Rep.  639.  Sapieha,  being  a  nonresident  of 
the  United  States,  was  cited  by  publication,  and,  not  appearing  either 
in  person  or  by  attorney,  the  trial  court  appointed  an  attorney  to  rep- 
resent the  nonresident. 

"Judgment  being  rendered  in  Sapieha's  favor,  a  fee  was  allowed  him 
for  his  services,  which  was  taxed  as  costs  against  the  plaintiff.  Ques- 
tion :  Was  it  lawful  to  tax  such  fee  against  the  plaintiff  in  a  suit  of 
this  character?" 

To  the  first  question  we  answer,  the  power  of  attorney  mentioned  in 
this  question  was  voidable,  but  not  void.  Elston  v.  Jasper,  45  Tex. 
409;  Askey  v.  Williams,  74  Tex.  294,  11  S.  W.  1101,  5  L.  R.  A.  176; 
Ferguson  v.  Railway  Co.,  73  Tex.  344,  11  S.  W.  347;  Cummings  v. 
Powell,  8  Tex.  81.  The  deed  of  an  insane  person  is  not  void,  but,  like 
that  of  an  infant,  is  voidable,  at  the  election  of  the  party.  Irvine  v. 
Irvine,  9  Wall.  626,  19  L.  Ed.  800.  We  believe  that  this  doctrine  is 
not  now  seriously  controverted  in  the  courts  of  this  country.  We  can 
see  no  difference  in  principle  between  the  act  of  making  a  deed  which 
passes  the  title  and  making  an  instrument  which  authorizes  another 
person  to  do  the  same  thing.  In  this  state  the  powers  of  persons  over 
real  and  personal  property  are  so  nearly  the  same  that  no  distinction 
can  be  said  to  exist  in  the  capacity  required  for  making  a  sale  and 
transfer  of  the  one  or  the  other.  The  law  provides  different  methods 
of  executing  the  will  of  the  party,  but  places  no  greater  restriction 
upon  the  power  to  sell  the  one  than  the  other.  It  has  been  held  upon 
sound  reasoning  that  a  lunatic  or  an  infant  may  make  a  power  of  attor- 
ney by  which  simple  contracts  might  be  entered  into  for  them;  such 
as  the  signing  of  notes,  or  the  indorsement  and  transfer  of  commercial 
paper.  Whitney  v.  Dutch,  14  Mass.  457,  7  Am.  Dec.  229 ;  Hastings  v. 
Dollarhide,  24  Cal.  195 ;  Hardy  v.  Waters,  38  Me.  450. 

In  the  case  of  Whitney  v.  Dutch,  cited  above,  a  partnership  was 


28  THE  RELATION  (Part  1 

formed  between  an  adult  and  a  minor,  and  in  the  course  of  the  busi- 
ness the  adult  partner  executed  a  note  in  the  firm  name.  When  the  mi- 
nor became  of  age  he  ratified  the  note,  but  when  suit  was  brought  upon 
it  he  pleaded  his  infancy,  and  claimed  that  the  note  was  void,  and  not 
subject  to  ratification.  The  supreme  court  of  Massachusetts  held  that 
the  note  was  voidable,  and  that  it,  having  been  ratified  by  the  minor 
after  reaching  his  majority,  was  a  valid  claim  against  him.  That  court 
said :  "Then,  upon  principle,  what  difference  can  there  be  between  the 
ratification  of  a  contract  made  by  the  infant  himself  and  one  made  by 
another  acting  under  a  parol  authority  from  him?  And  why  may  not 
the  ratification  apply  to  the  authority  as  well  as  to  the  contract  made 
under  it?  It  may  be  said  that  minors  may  be  exposed  if  they  may 
delegate  power  over  their  property  or  credit  to  another.  But  they  will 
be  as  much  exposed  by  the  power  to  make  such  contracts  themselves, 
and  more,  for  the  person  delegated  will  generally  have  more  experience 
in  business  than  the  minor.  And  it  is  a  sufficient  security  against  the 
danger  from  both  these  sources  that  infants  cannot  be  prejudiced,  for 
the  contracts  are  in  neither  case  binding,  unless,  when  arrived  at  legal 
competency,  they  voluntarily  and  deliberately  give  effect  to  the  contract 
so  made.  And  in  such  case  justice  requires  that  they  should  be  com- 
pelled to  perform  them."  In  the  cases  of  Hardy  v.  Waters  and 
Hastings  v.  Dollarhide,  before  cited,  the  issue  was  upon  the  validity  of 
the  transfer  of  a  promissory  note  made  by  the  agent  of  the  payee,  who 
was  a  minor;  and  it  was  claimed  that  the  transfer  was  void  because 
the  minor  could  not  confer  power  upon  another  to  transact  such  busi- 
ness for  him.  In  each  of  the  cases,  however,  the  court  held  the  trans- 
fer good  when  ratified  by  the  minor  after  arriving  at  majority.  In 
other  words,  the  court  held  the  power  of  attorney  to  be  voidable,  and 
the  act,  being  ratified,  became  valid,  just  as  if  it  had  been  done  by  the 
infant  himself. 

The  Supreme  Court  of  this  state  in  the  case  of  Cummings  v.  Powell 
intimated  very  strongly  the  opinion  that  a  power  of  attorney  executed 
by  an  infant  or  a  lunatic  authorizing  the  sale  and  conveyance  of  real 
estate  was  merely  voidable ;  but  the  question  was  not  involved,  and 
the  opinion  is  not  authority.  In  the  case  of  Ferguson  v.  Railway  Co. 
the  court  did  in  fact  decide  that  the  power  of  attorney  given  by  an 
infant  was  voidable  only.  The  question  was  in  the  case,  a  proper  sub- 
ject for  its  decision,  but  in  the  close  of  the  opinion  the  court  placed  the 
decision  upon  another  question.  In  Askey  v.  Williams  the  defendant, 
a  minor,  employed  an  attorney  to  defend  him  against  a  criminal  charge, 
and  to  secure  the  fee  gave  a  note  with  a  deed  of  trust  upon  land  con- 
taining a  power  of  sale.  The  debt  being  unpaid,  the  trustee  sold  the 
land  to  pay  the  note,  and  in  suit  for  the  land  the  validity  of  the  sale 
was  in  issue.  It  was  held  that  the  deed  of  trust  which  contained  the 
power  of  sale  was  voidable ;  that  the  sale  made  by  the  trustee  under 
the  power  was  subject  to  be  avoided  by  the  minor,  just  as  if  the  deed 


Ch.    2)  THE   PARTIES   TO    THE   RELATION  29 

had  been  executed  by  the  minor  in  person.  We  regard  this  case  as 
directly  in  point,  and  as  deciding  the  very  question  presented.  It  is 
true  that  in  the  course  of  the  opinion  Judge  Gaines  remarked  that 
powers  given  by  a  minor,  when  coupled  with  an  interest,  were  held  to 
be  voidable ;  but  the  opinion  is  not  placed  upon  that  ground.  The  fol- 
lowing language  of  the  court  shows  that  the  power  was  sustained  as 
if  it  had  been  a  deed,  placing  them  upon  the  same  basis :  "If  the  infant 
had  conveyed  the  land  absolutely  as  a  fee,  his  deed  would  not  have 
been  void,  but  he  could  have  avoided  it  within  a  reasonable  time  after 
coming  of  full  age  upon  payment  of  a  just  compensation  for  the  serv- 
ices rendered  by  his  grantee.  We  think  the  same  rule  should  apply  in 
this  case." 

The  contention  of  the  appellant  that  the  power  of  attorney  and  the 
deed  made  under  it  which  are  involved  in  this  controversy  are  ab- 
solutely void  because  the  maker  of  the  power  of  attorney  was  at  the 
time  a  lunatic  is  supported  by  the  greater  number  of  adjudicated  cases. 
It  is  the  doctrine  of  the  English  courts,  and  has  been  followed  in 
the  supreme  court  of  the  United  States  and  by  the  supreme  courts  of 
a  number  of  the  states  without  questioning  the  soundness  upon  which 
it  is  based,  or  its  consistency  with  the  system  of  laws  under  which 
property  rights  are  held  in  this  country.  Of  the  cases  which  sustain 
this  rule  we  cite  the  following:  Dexter  v.  Hall,  15  Wall.  9,  21  L.  Ed. 
73 ;  Philpot  V.  Bingham,  55  Ala.  435 ;  Armitage  v.  Widoe,  36  Mich. 
124;  Fetrow  v.  Wiseman,  40  Ind.  148;  Lawrence's  Lessee  v.  Mc- 
Arter,  10  Ohio,  37;  Fonder  v.  Van  Home,  15  Wend.  631,  30  Am. 
Dec.  77;  Pyle  v.  Cravens,  4  Litt.  17.  In  Dexter  v.  Hall,  cited  above, 
the  supreme  court  of  the  United  States  reviews  at  length  the  English 
cases,  and  criticises  the  doctrine  that  the  contracts  of  infants  and 
lunatics  are  voidable  only;  finally  basing  its  judgment  upon  the  propo- 
sition that  contracts  made  by  infants  and  lunatics,  and  not  delivered 
by  the  hand  of  the  maker,  are  void.  We  quote  the  following  to  show 
the  basis  of  that  opinion :  "The  doctrine  that  a  lunatic's  power  of 
attorney  is  void  finds  confirmation  in  the  analogy  there  is  between  the 
situation  and  acts  of  infants  and  lunatics.  Both  classes  of  persons  are 
regarded  as  under  the  protection  of  the  law.  *  *  *  Yet  it  is 
universally  held,  as  laid  down  by  Lord  Mansfield  in  Zouch  v.  Parsons. 
3  Burrows,  1804,  that  deeds  of  an  infant  which  do  not  take  effect  by 
delivery  of  his  hand  (in  which  class  he  places  a  letter  of  attorney)  are 
void.  We  are  not  aware  that  any  different  rule  exists  in  England  or 
in  this  country."  In  the  same  court,  the  same  judge,  Justice  Strong, 
delivered  an  opinion  in  the  case  of  Irvine  v.  Irvine,  9  Wall.  617,  19 
L.  Ed.  800,  which  involved  the  validity  of  a  sale  made  under  power 
contained  in  a  mortgage,  in  which  case  that  court  held  that  the  sale 
was  voidable ;  saying :  "Whatever  may  have  been  the  doubts  once 
entertained,  it  has  long  been  settled  that  the  deed  of  an  infant,  being 


30  THE  RELATION  (Part  1 

an  executed  contract,  is  only  voidable  at  his  election;    that  it  is  not 
void.       It  operates  to  transmit  the  title." 

The  ablest  judges  who  have  dealt  with  this  question  have  not  under- 
taken to  sustain  by  reason  the  rule  adopted  by  the  supreme  court  of 
the  United  States.  In  the  case  of  Armitage  v.  Widoe,  before  cited, 
Judge  Cooley  said:  "On  the  authorities,  no  rule  is  clearer  than  that 
an  infant  cannot  empower  an  agent  or  attorney  to  act  for  him."  And 
that  able  judge  contented  himself  with  a  citation  of  authorities  in 
support  of  a  rule  for  which  he  could  assign  no  sound  reason.  In 
Philpot  V.  Bingham,  before  cited.  Judge  Stone,  of  the  supreme  court 
of  Alabama,  said  of  this  question :  "From  such  an  array  of  authorities, 
sanctioned  as  the  principle  has  been  by  this  court,  we  do  not  feel  at 
liberty  to  depart,  although  the  argument  in  favor  of  the  exception  is 
rather  specious  than  solid.  We  therefore  hold  that  the  power  of  attor- 
ney under  which  the  plaintiff's  land  was  sold,  made,  as  it  appears  to 
have  been,  while  he  was  an  infant,  was  and  is  what  the  law  denomi- 
nates void."  In  the  case  of  Fetrow  v.  Wiseman,  above  cited,  the 
supreme  court  of  Indiana,  after  having  stated  the  proposition,  said : 
"The  proposition  may  not  be  founded  in  solid  reason,  but  it  is  so  held 
by  all  the  authorities."  These  are  fair  samples  of  the  cases  which 
uphold  the  doctrine  that  the  power  of  attorney  of  an  infant  or  a 
lunatic  is  absolutely  void.  The  fundamental  principle  of  the  cases  in 
which  the  doctrine  originated  is  wholly  absent  from  and  at  variance 
with  our  system  of  laws,  and  we  feel  that  the  strong  reasoning  of 
Judge  Hemphill  in  Cummings  v.  Powell,  and  the  qualified  decision  in 
Ferguson  v.  Railway  Co.,  supported  by  the  later  case  of  Askey  v.  Wil- 
liams, furnish  a  safer  guide  by  which  to  regulate  the  property  rights 
of  the  people  of  this  country,  and  are  more  in  harmony  with  our 
system  of  laws.  We  therefore  follow  them  in  preference  to  the  arbi- 
trary rule  asserted  in  the  greater  number  of  decisions  upon  that  ques- 
tion.* *  *  *  [The  answers  to  the  second  and  third  questions  are 
omitted.] 

*  The  above  case  cites  the  leading  cases  holding  a  lunatic's  power  of  attor- 
ney absolutely  void.  But  see,  also,  Trueblood  v.  Trueblood,  8  Ind.  19.j,  65 
Am.  Dec.  756  (1856)  ;  Turner  v.  Bondalier,  31  Mo.  App.  582  (1888),  and  note 
to  1  Am.  Lead.  Cas.  247.  The  following  may  be  added  as  holding  a  power  by 
an  insane  person  voidable  merely,  at  the  option  of  the  principal  when  he 
reaches  a  lucid  period,  or  valid,  so  far  as  to  save  the  rights  of  third  persons 
"who,  before  the  insanity  intervened,  became  interested  in  the  power  by  rea- 
son of  a  consideration  advanced,  or  who,  in  ignorance  of  the  incapacity,  and 
in  good  faith,  parted  with  a  consideration  of  value,  relying  on  the  apparent 
authority  of  the  agent."  Matthiessen  &  Weichers  Refining  Co.  v.  McMahon, 
Adm'r,  .38  N.  J.  Law,  5.36  (1876) ;  Blinn  v.  Schwarz,  177  N.  Y.  252,  69  N.  E. 
542,  101  Am.  St.  Rep.  806  (1904),  affirming  63  App.  Div.  25,  71  N.  Y.  Supp. 
343  (1901). 

That  an  infant's  power  of  attorney  is  voidable  merely,  and  not  void,  is 
maintained  in  Simpson  v.  Prudential  Ins.  Co.,  184  Mass.  348,  68  N.  E.  673, 
63  L.  R.  A.  741,  100  Am.  St.  Rep.  560  (1903).  See,  also,  Hardy  v.  Waters. 
38  Me.  450  (1853);  Patterson  v.  Lippincott,  47  N.  J.  Law,  457,  1  Atl.  506 
C4  Am.  Rep.  178  (1885),  and  extended  note  in  18  Am.  St.  Rep.  629. 


Ch.  2)  THE   PARTIES   TO   THE   RELATION  31 

SECTION  2.— WHO  MAY  ACT  AS  AGENT 


KING  V.  BELLORD. 

(High  Court  of  Chancery,  1863.    1  Hem.  &  M.  343,  32  L.  J.  Ch.  646, 

8  L.  T.  Rep.  N.  S.  633,  2  New  Rep.  442.  11  Wkly.  Rep. 

900,   71  Eng.  Reprint,  149.) 

Vice  Chancellor  Sir  W.  Page  Wood.  The  point  raised  in  this  case, 
though  not  covered  by  express  decision,  seems  to  fall  within  the  gen- 
eral rule  that  an  infant  is  incapable  of  entering  into  a  binding  contract. 
The  actual  contest  arises  thus:  A  testator  having  chosen  to  devise 
estates,  upon  trusts  requiring  discretion  as  to  the  expediency,  as  to 
the  time,  and  as  to  the  manner  of  a  sale,  to  three  persons,  one  of  whom 
is  an  infant,  the  question  is,  whether  a  contract  for  sale  entered  into 
by  those  three  trustees  is  a  valid  contract,  which  this  court  can  spe- 
cifically perform.  There  are  numerous  authorities  which  approach 
this  question,  but  none  which  decide  it.  All  of  them  are  distinguished 
from  this  case  by  the  well-known  difference  between  power  and  prop- 
erty, a  marked  distinction  which  has  been  invariably  upheld. 

There  can  be  no  doubt  upon  the  authorities  from  the  earliest  times, 
that  if  a  man,  by  his  will,  gives  an  infant  a  simple  power  of  sale  with- 
out an  interest,  the  infant  may  exercise  it.  All  the  decisions  on  the 
subject  are  referred  to  by  Lord  St.  Leonards  in  his  work  on  "Powers,"' 
and  I  need  not  discuss  them  minutely.  They  all  turn  on  the  execu- 
tion of  powers ;  and  there  is  not  a  single  authority  upon  the  question 
whether  an  infant  can  sell  an  estate  devised  to  him  upon  trust  for 
sale.  There  is  an  opinion  of  Mr.  Preston's,  mentioned  without  dis- 
approval by  Lord  St.  Leonards,  that  an  infant  can  exercise  a  power 
even  though  it  be  coupled  w^ith  an  interest;  but  this  is  very  different 
from  selling  an  estate  vested  in  the  infant  by  a  devise  in  fee. 

It  is  to  be  observed,  that  all  the  cases  relied  on  with  reference  to 
powers,  have  gone  upon  the  principle  that  the  infant,  in  executing  tlie 
power,  is  a  mere  conduit-pipe,  as  it  has  been  termed,  of  the  will  of  the 
donor  of  the  power ;  so  that  when  the  estate  is  created,  the  infant 
(as  was  said  in  the  case  in  Rridgman)  is  merely  the  instrument  by 
whose  hands  the  testator  or  donor  acts.  The  donor,  it  is  said,  may 
use  any  hand,  however  weak,  to  carry  out  his  intentions.  This  prin- 
ciple fails  altogether  to  reach  the  case  of  a  devise  in  trust  to  an  in- 
fant. 

It  is  not  in  the  power  of  a  testator  to  confer  upon  an  infant  a 
capacity  in  himself  which  the  law  docs  not  give  him,  although  he  may 
make  the  infant  his  hand,  his  agent,  to  execute  his  purpose,  lie  can- 
not give  an  estate  to  an  infant  and  say  that  he  may  sell  it.  when  the 


32  THE  RELATION  (Part  1 

law  says  that  he  cannot  do  so.  It  is  unfortunate  that  the  testator 
should  have  selected  an  infant  as  a  trustee;  but  the  inconvenience 
arising  from  this  circumstance  in  the  particular  case,  is  not  to  be 
compared  with  that  which  would  result  from  holding  an  infant  to  have 
a  capacity  to  sell,  which  the  law  denies  him.  If  the  defendants  still 
adhere  to  the  offer  made  by  them  before  the  litigation,  I  shall  dismiss 
the  bill  with  costs.^ 

5  In  Lyon  v.  Kent,  45  Ala.  656  (1871),  it  is  said :  "Any  one,  except  a  lunatic, 
an  imbecile,  or  child  of  tender  years,  may  be  an  agent  for  another."  The  court 
approves  Story  on  Agency,  §§  6,  7,  9,  to  the  effect  that  monks,  infants,  femes 
covert,  persons  attainted,  outlawed,  or  excommunicated,  villains  and  aliens, 
may  be  agents  for  others.  If  the  principal  is  willing  to  intrust  the  busi- 
ness to  an  infant  and  third  persons  consent  to  deal  with  him,  they  cannot 
later  object  to  his  incapacity.  Cameron  v.  Ward,  22  Ga.  168  (1857).  While 
the  infant  agent  may  bind  his  principal,  the  infant  himself,  of  course,  will  in 
no  way  incur  contractual  liability  thereby,  either  to  his  principal  or  to  third 
persons.  Talbot  v.  Bowen,  1  A.  K.  Marsh.  436,  10  Am.  Dec.  747  (1819).  See, 
also,  ante,  p.  143  (infant  as  agent  of  parent). 


Ch.3) 


^/' 


THE   PDKPOSES    OF   THE    RELATION 


CHAPTER  III 


THE  PURPOSES  OF  THE  RELATION  "' 


tdMJUM'X 


QyfJ-yJycL/r\^yf-   ^tioN  1.— IN  GENERAL 


EVERWOOD  V.  LATROBE  et  al. 

(Court  of  Appeals  of  Maryland,  1888.    68  Md.  620,  13  Atl 

Bill  of  complaint  by  appellant  for  an  injunction  to  restrain  the 
board  of  managers  and  superintendent  of  a  cemetery  company  from 
interfering  with  appellant's  right  by  obstructing  or  denying  to  his 
agents  free  access  to  a  lot  in  the  cemetery  which  he  owned.  The  com- 
pany had  adopted  a  by-law  prohibiting  any  person,  other  than  a  lot 
holder  or  a  member  of  his  or  her  family,  from  doing  any  work  in 
the  cemetery,  except  by  a  permit  from  the  superintendent.  From  a 
judgment  denying  relief  plaintiff  appeals. 

Yellott,  ]}  [After  stating  the  facts  ;]  *  *  *  Nothing  is  clear- 
er than  that  if  a  man,  in  the  transaction  of  his  own  business,  has  a  right 
to  do  any  act,  he  can  perform  it  by  the  hands  of  his  agent.  The  general 
maxim,  as  old  as  our  system  of  jurisprudence,  is  that  whatever  a  man 
sui  juris  may  do  of  himself,  he  may  do  by  another.  Co.  Litt.  258.  Had 
not  this  principle  been  always  recognized,  it  is  difficult  to  perceive  how 
the  multiform  transactions  of  mankind  could  have  been  successfully 
conducted.  The  maxim,  "qui  facit  per  alium  facit  per  se,"  carries  with 
it,  by  implication,  a  recognition  of  the  right  of  every  man,  unless 
exercising  certain  delegated  powers,  and  acting  in  a  fiduciary  capacity, 
to  employ  an  agent  in  the  transaction  of  his  business.  Therefore, 
when,  by  the  terms  of  a  deed  or  other  instrument,  a  man  has  a  right  to 
do  a  certain  thing,  he  can  do  it  either  with  his  own  hands  or  by  the 
hands  of  an  agent,  and  if  the  agent  is  interfered  with  by  the  grantor 
it  is  an  interference  with  the  rights  of  the  grantee.  When  burying 
lots  in  a  cemetery  have  been  conveyed  by  a  corporation,  a  right  of 
property  is  conferred  on  the  purchaser  which  is  like  any  other  right  to 
real  estate.  Windt  v.  Church,  4  Sandf.  Ch.  471.  Unlike  the  Case  of 
Partridge,  39  Md.  631,  the  appellant  has  a  title  to  the  lot  by  virtue  of 
an  instrument  of  writing,  under  seal,  which  operates  as  a  deed  of  con- 
veyance.    The  act  of  1837  declares  the  property  thus  acquired  to  be 


1  Part  of  tho  opinion  Is  omitted. 
G0DD.PB.&  A.— 3 


34  THE  lucr.ATioN  (Parti 

real  estate.  The  grantee  has  a  qualified  fee  limited  to  the  purposes 
of  sepulture. 

The  second  clause  of  the  instrument,  conveying  the  property,  gives 
him  the  right  to  plant  and  cultivate  trees,  shrubs,  and  flowers.  This 
he  could  do  either  with  his  own  hands  or  by  employing  an  agent  to  do 
the  work  for  him.  When  he  accepted  the  deed,  and  paid  the  purchase 
money,  he  acquired  this  right.  Had  he  been  unable  to  secure  the 
right,  it  is  possible,  and  even  probable,  that  he  would  not  have  pur- 
chased the  property.  No  order  subsequently  passed  by  the  grantors 
can  be  so  construed  as  to  have  a  retroactive  operation,  and  thus  limit 
or  annul  the  privilege  secured  to  the  grantee  by  a  solemn  instrument 
under  seal.  As  said  by  Alderson,  J. :  "When  the  law  allows  a  party 
to  contract,  it  will  not  permit  that  contract,  by  any  matter  arising  ex 
post  facto,  to  be  made  of  no  value."    Giles  v.  Grover,  1  Clark  &  F.  106. 

In  Ashby  v.  Harris,  L.  R.  3  C.  P.  523,  this  very  question  was  decid- 
ed. The  burial  board  of  the  parish  of  St.  Pancras,  being  a  corporation, 
had  granted,  by  an  instrument  under  seal,  the  privilege  of  making  and 
constructing  a  private  grave,  and  the  exclusive  right  of  burial  and 
interment  therein.  The  grantee  had  been  accustomed  to  plant  and 
cultivate  flowers  by  the  hands  of  agents.  Ten  years  after  the  grant 
had  been  made,  the  board  determined  to  undertake  the  planting  of 
graves  themselves,  and  the  superintendent  was  authorized  to  prevent 
other  persons  from  entering  the  cemetery  for  such  purpose.  Notice 
was  also  given  to  the  owners  of  private  graves  of  the  determination 
of  the  board.  After  such  notice  had  been  given,  Harris,  as  the  agent 
of  the  grantee,  entered  for  the  purpose  of  planting  the  grave  con- 
veyed by  the  said  instrument  under  seal.  He  was  assaulted,  and  an 
action  for  damages  was  instituted.  It  was  held  that  "the  board  clearly 
had  no  right  to  make  regulations  to  interfere  with  that  which  they  had 
granted  in  perpetuity;"  that  "any  subsequent  regulations  made  by 
them  W'Ould  be  repugnant  and  void.  They  might  make  general  rules 
and  regulations  for  the  management  of  the  cemetery,  but  not  special 
rules  which  would  derogate  from  prior  grants." 

It  is  clear  that  the  court  below  committed  an  error  in  refusing  to 
grant  the  relief  asked  for  in  the  bill  of  complaint,  and  its  decree  should 
therefore  be  reversed.    Decree  reversed  and  cause  remanded. 

Bryan  and  Millicr,  JJ.,  dissent. 


Ch.  3)  THE  PURPOSES   OF   THE  RELATION  35 


SECTION  2.— EXCEPTIONS: 


COMBE'S  CASE. 

(Court  of  Common  Pleas,   1G13.     9  Coke,  75a,   77  English   Reprint,  813.) 

In  replevin  by  William  Atlee,  against  Daniel  Banks  and  Thomas 
Osborn  of  taking  of  his  cattle  at  Harmonsworth,  in  a  place  called 
Walnut-Tree  Close,  in  the  county  of  ^Middlesex,  &c.  Which  plea 
began  Trin.  8  Jac.  Reg.  Rot.  330.  Upon  the  pleading,  and  issue 
joined,  and  special  verdict  given,  the  case  was  such.  Thomas  Combes 
copyholder  in  fee  of  ten  acres  of  pasture  in  H.  of  the  manor  of 
Harmonsworth  in  the  county  of  Middlesex,  by  his  deed  22  November, 
5  E.  6,  constituted  and  ordained  William  Combes  and  Stephen  Erlie 
two  copyhold  tenants  of  the  same  manor  his  lawful  attornies,  to  sur- 
render vice  &  nomine  suo  to  the  lord  of  the  said  manor,  the  said  ten 
acres  of  pasture  to  the  use  of  John  Nicholas  and  his  heirs,  and  after- 
wards at  a  court  held  of  the  said  manor  8  Julii  anno  6  E.  6,  the  said 
attornies  tunc  tenentes  dom'  per  copiam  Rot'  Cur'  in  eadem  Cur'  os- 
tenderunt  scriptum  prjed'  gerens  dat'  prsedict'  22  Nov'  anno  5,  supra- 
dicto,  et  iidem  Willielmus  et  Stephanus  authoritate  eis  per  praed'  liter- 
am  attornatus  dat'  in  plena  cur"  sursum  reddiderunt  in  manus  dom' 
praed'  decem  acras  pastura3  ad  opus  &  usum  prasd'  Johannis  Nicholas 
haeredum  et  assignatorum  suorum,  who  was  at  the  same  Court  ad- 
mitted accordingly ;  and  that  within  the  said  manor  there  was  not 
any  custom  to  surrender  copyhold  land,  &c.  by  letter  of  attorney  either 
in  Court  or  out  of  Court.  And  if  the  said  surrender  by  letter  of 
attorney  of  the  said  lands  held  by  copy,  &c.  was  good  or  not,  was  the 
doubt  which  the  Jury  referred  to  the  consideration  of  the  Court.  And 
this  case  was  argued  at  the  bar,  in  Michaelmas,  Hilary,  and  Easter 
Terms,  and  in  this  term,  and  in  this  it  was  also  argued  by  the  Justices 
at  the  Bench;  and  in  this  case  two  points  were  moved.  1.  If  a  sur- 
render could  be  made  by  force  of  the  letter  of  attorney.  2.  If  the 
attornies  had  pursued  their  authority. 

As  to  the  first  it  was  unanimously  agreed  by  all  the  Judges  in  their 
several  arguments,  that  the  surrender  in  the  case  at  bar  made  by 
letter  of  attorney,  was  good ;  and  their  reason  was,  because  every 
copyholcler  having  a  customary  estate  of  inheritance,  may  de  communi 
jure,  without  any  particular  custom,  surrender  his  lands  held  by  copy 
in  full  Court,  and  therefore  in  pleading,  the  copyholder  need  not 
allcdge  a  custom  within  the  manor  to  surrender  in  Court ;  for  that 
which  is  the  usage  per  totam  Angliam,  is  the  common  law  as  it  is 
held  in  34  H.  8,  Br.  Custom  59,  c\:  34  H.  8.  Dy.  54.  Quod  habetur 
consuetude  inter  mercatores  per  totam  Angliam,  &c.  is  no  good  man- 


•36  THE  RELATION  (Parti 

ner  of  alledging  a  custom,  for  that  is  the  common  law;  and  in  the 
Book  of  Entries,  Tit.  Tresp.  Divisione  Copyhold  1.  f.  568,  no  custom 
is  alledged  to  enable  a  copyholder  to  surrender  in  full  Court,  no  more 
than  that  a  copyholder  may  make  a  lease  for  one  year;  because  that 
he  may  do  by  the  general  custom  of  the  realm,  which  is  the  common 
law,  vide  Bracton,  lib.  2,  c.  8.  Then  if  a  copyholder  may  surrender 
his  estate  in  Court  by  the  general  custom  of  the  realm,  which  is  the 
common  law,  from  thence  it  follows  that  he  may  do  it  by  attorney, 
as  a  thing  incident  by  the  common  law;  and  that  will  more  clearly 
appear  if  the  reason  of  such  things  which  a  man  cannot  do  by  attor- 
ney be  well  considered.  And  therefore  if  a  man  has  a  bare  authority 
coupled  with  a  trust,  as  executors  have  to  sell  land  they  cannot  sell 
by  attorney;  but  if  a  man  has  authority,  as  absolute  owner  of  the 
land,  there  he  may  do  it  by  attorney,  as  cestuy  que  use  might  after 
the  statute  of  1  R.  3,  and  before  the  statute  of  27  H.  8,  for  cestuy 
que  use  had  an  absolute  authority  to  dispose  of  the  land  at  his  will, 
without  any  confidence  reposed  in  him,  as  appears  in  11  EHz.  Dyer, 
283,  and  there  a  judgment  is  cited  in  25  H.  8,  accordingly,  against  the 
opinion  of  some  Judges  in  9  H.  7,  24.  But  in  the  case  at  bar,  the 
copyholder  has  a  customary  estate  of  inheritance,  and  not  an  authority 
or  power  only.  Also  there  is  a  difference  betwixt  a  general  absolute 
power  and  authority  as  owner  of  the  land,  as  aforesaid,  and  a  par- 
ticular power  and  authority  (by  him  who  has  but  a  particular  interest) 
to  make  leases  for  life  or  years.  And  therefore  if  A.  be  tenant  for 
life,  the  remainder  in  tail,  &c.  and  A.  has  power  to  make  leases  for 
21  years  rendering  the  ancient  rent,  &c.  he  cannot  make  a  lease  by 
letter  of  attorney  by  force  of  his  power,  because  he  has  but  a  particular 
power  which  is  personal  to  him ;  and  so  was  it  resolved  in  the  case  of 
the  Lady  Gresham  at  the  assises  in  Suffolk  in  quadragesim'  24  El.  by 
Wray  and  Anderson,  Chief  Justices,  Justices  of  Assise  there.  Also 
there  are  some  things  personal,  and  so  inseparably  annexed  to  the  per- 
son of  a  man,  that  he  cannot  do  them  by  another,  as  doing  of  homage 
and  fealty;  so  it  is  held  in  33  E.  3,  Trespass,  253.  the  lord  may  beat 
his  villain  for  cause,  or  without  cause,  and  the  villain  shall  not  have 
any  remedy ;  but  if  the  lord  commands  another  to  beat  his  villain  with- 
out cause,  he  shall  have  an  action  of  battery  against  him  who  beats 
him  in  such  case.  So  if  the  lord  distrains  the  cattle  of  his  tenant, 
although  nothing  be  behind,  the  tenant  for  the  respect  and  duty  which 
belong  to  the  lord,  shall  not  have  trespass  vi  et  armis  against  him; 
but  if  the  lord  commands  his  bailiff  or  servant  in  such  case  to  distrain 
where  nothing  is  behind,  the  tenant  shall  have  an  action  of  trespass 
vi  et  armis  against  the  bailiff  or  servant.  2  H.  4,  4,  a;  11  H.  4,  78,  b; 
1  H.  6,6,  a;  9  H.  7,  14,  a. 

Littleton  in  his  chapter  of  Burgage  holds,  that  where  in  a  borough 
he  who  is  seised  of  lands  in  fee  may  devise  by  custom,  there  the 
owner  of  such  land  may  devise  that  his  executors  shall  sell,  which 


Ch.  3)  THE   PUKPOSES   OF   THE   RELATION  37 

they  shall  do  as  attornies  to  him,  3  E.  3,  Coron.  310,  by  the  custom  of 
a  manor  a  freehold  will  pass  from  one  to  another  by  surrender  in  Court, 
against  the  will  of  the  lord,  and  where  the  custom  is  such,  the  tenant 
may  do  it  by  attorney,  vide  14  H.  4,  1,  a,  by  Hankford,  &  vide  19 
Ass,  p.  9. 

And  it  was  said,  as  he  to  whose  use  a  surrender  is  made  may  be 
admitted  by  attorney,  so  a  copyholder  may  surrender  by  attorney  in 
full  Court ;  and  the  case  of  him  to  whose  use  seems  the  stronger  case, 
because  he  who  is  to  be  admitted  is  to  do  fealty,  which  none  can  do 
fealty  but  he  who  shall  be  admitted,  and  therefore  in  such  case  the 
lord  may  refuse  to  admit  him  by  attorney;  but  if  he  admits  him  by 
attorney,  it  is  good  enough. 

But  Hil.  28  Eliz.  in  Chapman's  Case  it  was  held  in  the  King's  Bench, 
that  where  the  custom  of  a  manor  is,  that  the  copyholder  out  of  Court 
may  surrender  into  the  hands  of  the  lord  of  the  manor  by  the  hands 
of  two  customary  tenants,  who  in  effect  are  but  instruments  or  attor- 
nies of  the  copyholder  to  take  his  surrender,  that  in  such  case  the 
copyholder  by  his  attorney  cannot  surrender  into  the  hands  of  the 
lord  by  the  hands  of  two  copyhold  tenants;  for  inasmuch  as  the  sur- 
render in  such  case  ought  to  be  warranted  by  the  custom,  the  sur- 
render without  special  custom  to  warrant  it  by  attorney  will  not  be 
good.  Also  that  was  upon  the  matter  by  attorney  to  make  a  surrender 
by  others  who  are  but  attornies,  for  that  is  not  warranted  by  the  par- 
ticular custom  of  the  manor  to  make  a  surrender  out  of  court.  But 
in  the  case  at  bar  the  common  law,  and  no  particular  custom,  warrants 
the  surrender,  and  therefore  it  may  well  be  made  according  to  the  rule 
and  reason  of  the  common  law  by  attorney.  But  it  was  resolved,  that 
the  attorney  ought  to  pursue  the  manner  and  form  of  the  surrender 
in  all  points  according  to  the  custom,  as  the  copyholder  himself  ought 
to  have  done ;  as  if  the  surrender  by  the  custom  ought  to  be  by  the 
rod,  or  by  any  other  thing,  or  in  any  other  manner,  the  attorney  ought 
to  pursue  it.  And  the  Chief  Justice  said,  that  the  stile  of  a  copy- 
holder imports  three  things:  1.  Nomen,  his  name.  2.  Originem,  his 
commencement.  3.  Titul'  his  assurance :  his  name  is  tenant  by  copy 
of  court-roll,  for  his  name  is  not  tenant  by  court-roll,  but  by  copy  of 
a  court-roll,  who  is  the  sole  tenant  in  law  that  holds  by  copy  of  any 
record,  charter,  deed,  or  any  other  thing.  2.  His  commencement,  ad 
voluntatem  domini ;  for  at  the  beginning  he  was  but  tenant  at  the  will 
of  the  lord.  3.  His  title  or  assurance  secundum  consuetudinem  man- 
erii,  for  the  custom  of  the  manor  has  fixed  his  estate,  and  assured  the 
land  to  him  so  long  as  he  doth  his  services  and  duties,  and  performs 
the  customs  of  the  manor.  And  therefore  Danby  saith  in  7  E.  4,  19, 
a,  that  by  the  custom  he  is  as  well  inheritable  to  have  the  land  as  tenant 
to  hold  his  freehold  by  the  common  law.  And  it  was  resolved  that 
this  case  was  stronger,  because  the  letter  of  attorney  was  made  to 
those  who  were  tenants  by  copy,  &c.  of  the  said  manor.     But  it  was 


38  THE  RELATION  (Part  1 

agreed,  that  where  an  infant  at  the  age  of  fifteen  years  may  make  a 
feoffment  that  he  cannot  do  it  by  attorney,  because  a  custom  which 
enables  a  person  disabled  by  the  law,  ought  to  be  pursued,  and  an 
infant  can  do  nothing  to  pass  any  thing  out  of  him  by  attorney :  vide 
11,  H.  4,  33,  a,  and  it  would  be  hard,  if  men  in  prison,  or  sick,  or 
beyond  the  sea,  could  not  make  surrenders  of  their  lands  held  by  copy 
for  payment  of  their  debts,  or  preferment  and  advancement  of  their 
wives  and  children,  &c.  Nota,  reader,  this  is  the  first  case  that  I  have 
known  which  was  adjudged  in  this  point. 

2.  It  was  resolved,  that  when  any  has  authority,  as  attorney,  to  do 
any  act,  he  ought  to  do  it  in  his  name  who  gives  the  authority;  for 
he  appoints  the  attorney  to  be  in  his  place,  and  to  represent  his  person ; 
and  therefore  the  attorney  cannot  do  it  in  his  own  name,  nor  as  his 
proper  act,  but  in  the  name,  and  as  the  act  of  him  who  gives  the  au- 
thority. And  where  it  was  objected,  that  in  the  case  at  bar,  that  the 
attornies  have  made  the  surrender  in  their  own  names ;  for  the 
entry  is  Quod  iidem  Willielmus  et  Stephanus,  &c.  sursum  reddiderunt 
&c.  It  was  answered  and  resolved  per  totam  curiam,  that  they  have 
well  pursued  their  authority ;  for  first  they  showed  their  letter  of 
attorney,  and  then  they  authoritate  eis  per  prasd'  literam  attornat'  dat' 
sursum  reddiderunt,  &c.  which  is  as  much  as  to  say,  as  if  they  had 
said,  we  as  attornies  of  Thomas  Combes  surrender,  &c.  and  both  these 
ways  are  sufficient;  as  he  who  has  a  letter  of  attorney  to  deliver 
seisin  saith,  I  as  attorney  to  J.  S.  deliver  you  seisin ;  or  I  by  force 
of  a  (this)  letter  of  attorney  deliver  you  seisin ;  and  all  that  is  well 
done  and  a  good  pursuance  of  his  authority :  but  if  attornies  have 
power  by  writing  to  make  leases  by  indenture  for  years,  &c.  they  can- 
not make  indentures  in  their  own  names,  but  in  the  name  of  him  who 
gives  them  warrant.  But  if  a  man  by  his  will  in  writing  devises  that 
his  executors  shall  sell  his  land,  and  dies,  there  the  executors  in  their 
own  name  may  sell  the  land  for  necessity,  because  he  who  gives  them 
authority  by  his  will  (which  takes  effect  after  his  death)  is  dead;  and 
yet  in  such  case  the  vendee  is  in  by  the  devisor. 


LYON  V.  MITCHELL. 

(Court  of  Appeals  of  New  York,  1867.    36  N.  Y.  2.35,  682,  93  Am.  Dec.  502.) 

Action  upon  an  agency  agreement  with  plaintiff's  testator  by  which 
defendant  agreed  to  pay  him  a  commission  of  10  per  cent,  of  the  sale 
of  steamers  to  be  sold  by  him  as  agent  of  defendant.  The  steamers 
were  sold  to  the  United  States  government  and  defendant  refused  to 
pay  the  commission. 

Hunt,  J.-  [After  deciding  another  point ;]  *  *  *  The  de- 
fendant insists  also  that  the  contract,  as  established  by  the  evidence, 

2  Part  of  the  opinion  is  omitted.    Grover,  J.,  dissented. 


Ch.  3)  THE   PURPOSES   OF   THE   RELATION  39 

was  in  conflict  with  good  morals  and  against  public  policy,  and  there- 
fore void.  The  evidence  showed  that  the  defendant  asked  the  plaintiff 
if  he  could  sell  those  steamers.  He  replied  that  he  did  not  know. 
Defendant  said :  "You  are  acquainted  with  the  republican  members 
of  the  administration?"  The  plaintiff  replied  that  he  was  acquainted 
with  some,  and  had  friends  who  could  introduce  him  to  others,  and 
who  could  aid  him. 

The  defendant  submitted  to  the  court  a  series  of  propositions,  which 
he  requested  him  to  charge,  and  under  the  fourth  one  of  which,  he 
desires  to  raise  the  present  question. 

That  proposition  commences  in  these  words:  "Any  contract  which 
conflicts  with  the  morals  of  the  time,  and  contravenes  any  established 
interest  of  society,  is  void,  as  being  against  public  policy."  It  then 
jsks  the  application  of  such  principles  to  the  present  case.  This  is 
the  only  one  of  the  requests  looking  to  this  subject. 

The  defendant  I  think  had  no  right  to  ask  a  charge  that  "any  con- 
tract which  conflicts  with  the  morals  of  the  time,"  is  void,  as  being 
against  public  policy.  To  make  a  contract  thus  void,  it  must  be  against 
sound  morals.  Morality  is  defined  by  Paley  to  be  "that  science  which 
teaches  men  their  duty,  and  the  reason  of  it."  Paley,  Mor.  Ph.  b. 
1.  c.  2.  "Morality  is  the  rule  which  teaches  us  to  live  soberly  and 
honestly.  It  hath  four  chief  virtues,  justice,  prudence,  temperance 
and  fortitude."  Bp.  Home's  Works,  vol.  6,  charge  to  clergy  of  Nor- 
wich. To  make  a  contract  void  on  the  principle  claimed,  it  must  be 
against  morality  as  thus  defined.  The  "morals  of  the  time"  may  be 
vicious;  public  sentiment  may  be  depraved;  the  people  may  have 
all  gone  astray,  so  that  not  one  good  man  can  be  found.  Sound 
.iiorals,  as  taught  by  the  wise  men  of  antiquity,  as  confirmed  by  the 
precepts  of  the  gospel,  and  as  explained  by  Paley  and  Home,  are 
unchangeable.     They  are  the  same  yesterday  and  to-day. 

The  proposition  under  consideration  also  contains  a  statement  that 
a  contract  which  "contravenes  any  established  interest  of  society,"  is 
void,  as  being  against  public  policy.  This  position  is  equally  unsound, 
but  I  will  not  enlarge  upon  it. 

My  examination  of  this  question  upon  the  merits  has  also  brought 
me  to  the  conclusion  that  no  valid  objection  can  be  made  to  the  deci- 
sion of  the  judge  at  the  circuit. 

The  whole  of  the  defendant's  fourth  request  to  charge,  and  upon 
which  the  question  arises,  is  as  follows:  "Any  contract  which  con- 
flicts with  the  morals  of  the  time,  and  contravenes  any  established 
interest  of  society,  is  void,  as  being  against  public  policy.  If  the 
jury  believe  that  the  agreement  on  which  this  action  is  brought  was 
made  in  reference  to  the  influence  of  the  plaintiff,  or  his  friends, 
with  the  rcjiublican  members  of  the  administration,  or  with  any  per- 
sons connected  with  the  administration,  whose  duty  it  was  to  act  in 
the   purchase   of   steamers,  and   the  percentage  as   commissions  was 


40  THE    RELATION  (Patt  1 

fixed  in  reference  to  that  influence,  that  the  contract  is  void  and  no 
action  can  be  sustained  upon  it." 

The  defendant  and  those  concerned  with  him  had  these  four  steam- 
ers on  hand.  The  coasting  trade  in  which  they  had  been  employed 
was  broken  up  by  the  inauguration  of  war  at  the  south.  Open  war 
against  the  government  of  the  United  States  had  been  commenced 
nearly  a  month  before  the  date  of  this  contract.  The  vessels  were 
useless  for  the  service  in  which  they  had  been  employed,  and  for  the 
business  in  which  the  defendant  was  engaged.  A  deduction  of  ten 
per  cent  upon  their  value,  or  the  payment  of  commissions  to  that 
amount  was  not  an  unreasonable  inducement  to  a  sale  under  such 
circumstances.  No  inference  of  corrupt  intentions  can  therefore  be 
drawn  from  the  payment  of  a  larger  commission  than  was  usually 
paid  for  the  services  of  an  agent  or  broker. 

The  proposition  under  consideration,  it  will  also  be  observed,  makes 
no  reference  to  corrupt  intentions  on  the  part  of  the  agent,  or  of  pe- 
cuniary influences  to  be  used  by  him,  or  secret  service  to  be  employed. 
It  presents  but  a  single  point,  namely,  that  if  the  fact  that  the  plain- 
tiff or  his  friends  had  influence  with  the  administration,  or  with  those 
whose  duty  it  was  to  purchase  steamers,  was  an  inducement  to  the 
contract,  then  the  contract  is  void. 

Two  classes  of  cases  are  cited  in  support  of  this  proposition,  viz. : 
Where  a  contract  has  been  made  to  induce  a  particular  legislative  ac- 
tion, and  where  a  contract  has  been  made  to  procure  appointments  to 
office.  Several  cases  of  these  classes  are  referred  to  in  the  recent  case 
of  Tool  Co.  V.  Norris,  2  Wall.  45,  17  h.  Ed.  868,  and  are  cited  with 
approval.  Among  them  is  Marshall  v.  Baltimore  &  Ohio  R.  Co.,  16 
How.  314,  14  L.  Ed.  953,  where  the  principle  is  laid  down  that  all 
contracts  for  contingent  compensation  for  obtaining  legislation,  or 
to  use  personal  or  secret  or  sinister  influence  on  legislators,  is  void. 
That  where  an  agent  contracts  to  use  or  does  use  secret  influences  to 
affect  legislative  action,  the  contract  respecting  it  is  void.  The  learned 
judge  in  deciding  the  case  says:  "Public  policy  and  sound  morality 
do  therefore  imperatively  require  that  courts  should  put  the  stamp 
of  their  disapprobation  on  every  act,  and  pronounce  void  every  con- 
tract the  ultimate  or  probable  tendency  of  which  would  be  to  sully 
the  purity  or  mislead  the  judgments  of  those  to  whom  the  high  trust 
of  legislation  is  committed."  It  was  further  said  that  all  contracts 
to  evade  the  revenue  laws  are  void,  as  well  as  all  marriage  brokage 
contracts,  and  contracts  for  procuring  appointments  to  office.  In  aid 
of  these  views  may  also  be  cited  Hatzfield  v.  Gulden,  7  Watts,  152, 
31  Am.  Dec.  750,  which  was  an  agreement  to  obtain  signatures  for 
a  pardon,  and  Clippinger  v.  Hepbaugh,  5  Watts  &  S.  315,  40  Am. 
Dec.  519,  which  was  an  agreement  to  procure  the  passage  of  a  leg- 
islative act  by  personal  influence,  and  Pingry  v.  Washburn,  1  Aikens, 
264,  15  Am.  Dec.  676,  which  was  an  agreement  to  pay  for  the  with- 
drawal of  opposition  to  an  act  of  the  Legislature,  and  Harris  v.  Roof, 


Ch.  3)  THE   PURPOSES   OF^THE   RELATION  4:1 

10  Barb.  489,  which  was  an  agreement  to  obtain  legislative  action 
recognizing  an  ancient  land  grant,  and  Debenham  v.  Ox,  1  \^es.  Sr. 
276,  which  was  an  agreement  to  pay  for  soliciting  a  will  in  favor  of 
another.  Of  the  same  general  character  is  Gray  v.  Hook,  4  N.  Y. 
449,  where  two  persons  being  applicants  for  an  office,  it  was  agreed 
that  one  should  withdraw  and  aid  the  other  in  procuring  the  office, 
and  in  consideration  thereof  the  fees  should  be  divided  between  them. 
The  agreement  was  held  void. 

The  general  rule  as  laid  down  in  the  cases  cited  is  a  salutary  one. 
Care  is  necessary  however  in  its  application.  Certain  other  rules  and 
principles  are  also  to  be  remembered.  Thus  the  right  to  sell  and  dis- 
pose of  property  is  an  essential  element  of  ownership.  It  is  a  right 
to  which  the  owner  is  entitled  to  the  full  and  unrestricted  enjoyment. 
So  the  time,  place  and  manner  of  sale  are  within  the  range  of  an  own- 
er's rights.  He  may  sell  personally  or  by  agent,  at  private  sale  or 
by  public  auction.  He  may  employ  that  agent,  who  by  his  zeal,  his 
activity,  his  acquaintance  or  his  good  character  may  be  likely  to  ob- 
tain the  best  price  for  the  articles  to  be  sold.  So  also  a  suitor  in  the 
courts  of  justice  may  employ  that  advocate,  who  in  his  opinion  has 
the  best  qualifications  to  obtain  the  judgment  he  desires.  To  do  so 
is  his  undoubted  right.  Learning,  industry,  eloquence,  high  personal 
character,  the  esteem  in  which  he  is  held  by  the  court,  may  all  justly 
be  considered  by  the  party  making  the  employment.  It  is  allowable 
to  employ  counsel  to  appear  before  a  legislative  committee,  or  before 
the  Legislature  itself,  to  advocate  or  oppose  a  measure  in  which  the 
individual  has  an  interest.  Mills  v.  Mills,  36  Barb.  474;  Hillyer  v. 
Trarene,  1  Am.  Law  Reg.  146;  Howden  v.  Simpson,  10  Ad.  &  Ell. 
193.  It  is  allowable,  and  not  unusual,  to  employ  counsel  thus  to  ap- 
pear before  the  governor  of  the  state,  when  he  has  under  considera- 
tion the  propriety  of  giving  his  sanction  to  a  bill  which  has  passed 
both  branches  of  the  Legislature.  Will  it  be  insisted  that  no  advo- 
cate can  be  legally  employed  thus  to  appear,  unless  he  is  of  doubt- 
ful reputation,  or  personally  offensive  to  the  Legislature  or  governor, 
or  unless  he  belongs  to  a  different  political  party?  I  apprehend  not. 
An  advocate  of  high  personal  character  would  naturally  and  most 
properly  be  employed  in  the  discharge  of  such  duties,  and  one  who 
was  likely,  by  his  personal  qualities  or  his  political  position,  to  be  ac- 
ceptable to  the  body  before  which  he  was  to  appear.  The  possession 
of  such  qualifications,  and  the  knowledge  of  and  reference  to  it,  would 
form  no  objection  to  the  employment.  For  an  honest  purpose,  avowed 
to  the  body  before  which  the  appearance  is  made,  and  by  the  use  of 
just  argument  and  sound  reasoning,  this  is  lawful.  Authorities  supra. 
These  principles  are  equally  plain  with  those  restricting  the  sale  of 
political  influence.  Neither  class  of  cases  can  be  overthrown.  The 
law  is  to  be  so  applied  that  both  may  be  preserved. 

A  distinction  may  also  well  be  made  upon  those  cases  which  I  tiiink 
will  dispose  of  the  present  question.     Personal  solicitations  of  Icgis- 


•t2  Til  10  RELATION  ■    (Part  1 

V 

lators  or  of  judges  is  not  a  lawful  subject  of  contract.  Personal  so- 
licitations of  the  president,  the  governor  or  the  heads  of  department 
for  favors  or  for  clemency,  is  not  the  lawful  subject  of  a  contract. 
The  apprehension  that  considerations  other  than  those  of  a  high  sense 
of  duty  and  of  the  public  interest,  may  thus  be  brought  to  influence 
tlieir  determination,  forbids  this  employment.  But  a  different  prin- 
cijile  prevails  where  property  is  offered  for  sale  to  the  government, 
and  where  a  bargain  is  sought  to  be  made  with  them,  and  where  there 
is  no  concealment  of  the  agency.  It  then  becomes  a  matter  of  traffic. 
The  agent  says  that  he  has  vessels  or  arms  for  sale,  and  that  he  can 
furnish  the  government  with  what  it  needs  and  at  a  fair  price;  that 
the  vessels  are  owned  by  Mr.  Mitchell,  or  the  arms  are  manufactured 
at  Providence.  Ks  a  general  principle,  the  seller  desires  to  obtain  a 
high  price,  whilcythe  buyer  desires  to  purchase  at  a  low  one.l  This 
clement  is  known  and  appreciated  by  each  party  in  making  a  bargain. 

1  know  of  no  principle  upon  which  a  seller  should  be  compelled  to 
employ  an  agent  who  would  be  looked  upon  with  suspicion  and  dis- 
trust by  the  party  to  whom  he  wished  to  sell.  In  a  time  of  revolution, 
when  the  Southern  Confederacy,  against  which  the  arms  or  vessels 
were  to  be  used,  had  friends  at  the  North,  would  it  be  a  legal  ob- 
jection to  an  agent  desiring  to  sell  munitions  of  war,  thzd;  his  loyalty 
to  the  government  was  undoubted?  I  cannot  think  so./  The  present 
case  was  one  of  bargain  and  sale  simply.  No  fraud  ii^on  the  gov- 
ernment is  imputed,  no  suggestion  is  made  of  pecuniary  influence 
to  be  used,  no  intended  corruption  is  suggested.  The  ca^e  to  be  de- 
cided is  free  from  the  existence  of  any  of  these  elements,  j 

An  agent  of  the  same  political  party  with  the  executive  or  the  heads 
of  departments,  having  acquaintances  and  a  reputation  jivhich  would 
enable  him  to  make  an  advantageous  presentation  of  his  merchandise, 
may  in  my  opinion,  be  lawfully  employed  to  make  such  sale,  and  with 
reference  to  those  qualifications.     The  decision  in  Tool  Co.  v.  Norris, 

2  Wall.  45,  17  L.  Ed.  868,  confounds  a  sale  or  traffic  openly  made  by 
an  avowed  agent  to  a  party  wishing  to  purchase,  with  the  forbidden 
case  of  an  interference  with  legislative  action  or  executive  clemency, 
where  the  party  does  not  profess  to  act  upon  commercial  principles. 
There  is  a  manifest  difference  in  the  principle  governing  the  cases. 
I  think  that  case  was  not  well  considered,  and  cannot  adopt  it  as  an 
authority  for  the  present.  Judged  by  the  principles  I  have  set  forth, 
the  ruling  at  the  trial  was  correct. 

The  rule  of  damages  was  rightly  laid  down,  and  I  see  nothing  in 
the  other  points  raised  which  will  require  a  new  trial. 
Judgment  should  be  affirmed.^ 

3  Compare  with  Mills  v.  Mills,  40  N.  T.  54.3,  100  Am.  Dec.  !j.35  (18C9),  In 
which  a  contract  for  services  to  procure  legislation  was  held  to  be  void,  as 
"leading  to  secret,  improper  and  corrupt  tampering  with  legislative  action." 
Compare,  also,  two  contracts  for  services  in  procuring  the  location  of  a  post 
office.  Elkhart  County  Lodge  v.  Crary,  98  Ind.  238,  49  Am.  Rep.  746  (1884) ; 
Beat  V.  Polhemus,  67  Mich.  130,  34  N.  W.  532  (1887). 


Trist  Y.   Child > 

Facts: 

Ptf.  "brings  this  action  to  enjoin  def, 
from  drawing  money  a-opro-oriated  "by  Congress  to 
settle  a  -Driv^te  claim  due  him.  It  appears  that 
-lef.  hired  -rtf.,  ''n  attorney,  on  a  contract 
to  -D^py  him  ?5^  of  any  money  secured,  to  personall 
rolic'it  the  members  of  congress  «^nd  others  of 
^*  ^-n-uence,  "by  lo"h'^:'ing,  etc.,  to  the  end  of 
"■'"vlng  f^n   r-D-oro-nri- tion  made  "by  congress  to 
-#?ttle  this  hill  of  def's, 

C^-irt: 

An  ^^p-ree-ne it  for  Durely  -professional 
^^rv'ces  would  "he  v-'^lid,  "but  when  the  lement  of 
p->lvcit*>tion  comer  in  the  agreement  hecomes  in- 
v^l'd.  To  hold  otherwise  would  tend  to  loromote 
evil  r»r»ctices  r^nd  fr«ud.  The  payment  e'^rned  "by 
rerson  of  the  purely  -orofessional  services,  be- 
ing blended  and  confused  with  the  forbidden, 
mu,Bt  be  dismissed  with  the  other. 


i/oU^^y-  ^ir^  ^ 


0^  a-  ^  T^cf  •ofO'xq-cB  -^©nom  3niw.^tB  i 

io'^txj.ioo   f-  no   ,'^9m:o^;tB  nn   ♦•5^rr  beTxrf  , 
Il3jcios!£©a  o;t    ,5eT.rod3  Tjenom  ^7;n«  ^o  •^3'^  ralrf  y.^f 

od   8a©i75,noo   '^cf   e5.!«m  noi^^itrroKTcr^  n*'  sn. 

.a"3:ef)  ^o   riicT  3iff;t   el; 

^o   ^tiieaieX   9rf;t  norfw  ;tucf    ,6jX«v  9=^    fiXiroif  9eo'' 
-ni   aefflooed'   jnemes^gB  ©ff;t   nl   39i[noo  noJ':t«Jtfo 
e^toinoia  o;t    bue'i   5l5ow  ©3lw^9f[;to    blorf  oT   ,5, 

-ed    ,3s?oiTi63  1^5X101839^ Ota    -.reTx/cr   ed;^  1:c  noi 

.xxetf)  rd=io*t   ©rid-   rf^tlvr  &ea.:j'inoo    5njS   bebneld 
.leriio  ed^   d^Jiv?  Beaaxffiaib  ed  ; 


^^^  -^\  ~--^^»'^'^^*^'>^ 


ry^UAHKM 


Cll.  3)A-/|  THE   PURPOSES   OF   THE   RELATION  43 


TRIST  V.  CHILD. 

(Supreme  Court  of  the  Uuited  States,  1S74.     21  Wall.  441,  22  L.  Ed.  623.) 

Bill  to  enjoin  Trist  from  drawing  from  the  United  States  Treasury- 
department  money  appropriated  by  Congress  to  pay  a  claim  of  Trist. 
"'lild  had  been  employed  as  attorney  to  secure  the  allowance  of  such 
claim  on  a  contract  to  pay  him  25  per  cent,  of  any  sum  secured.    Trist 
now  refuses  to  pay  Child. 

Mr.  Justice  Swayne,*  delivered  the  opinion  of  the  court.  [After 
considering  other  matters:]  *  *  *  gyj-  there  is  an  objection  of 
still  greater  gravity  to  the  appellee's  case. 

Was  the  contract  a  valid  one?  It  was,  on  the  part  of  Child,  to  pro- 
cure by  lobby  service,  if  possible,  the  passage  of  a  bill  providing  for 
the  payment  of  the  claim.  The  aid  asked  by  the  younger  Child  of 
T'rist,  which  indicated  what  he  considered  needful,  and  doubtless  pro- 
^/osed  to  do  and  did  do  himself,  is  thus  vividly  pictured  in  his  letter 
to  Trist  of  the  20th  February,  1871.  After  giving  the  names  of  sev- 
eral members  of  congress,  from  whom  he  had  received  favorable  as- 
surances, he  proceeds :  "Please  write  to  your  friends  to  write  to  any 
member  of  congress.  Every  vote  tells,  and  a  simple  request  may  se- 
cure a  vote,  he  not  caring  anything  about  it.  Set  every  man  you 
know  at  work.  Even  if  he  knows  a  page,  for  a  page  often  gets  a 
vote." 

Tn  the  Roman  law  it  was  declared  that  "a  promise  made  to  effect 

oase  purpose,  as  to  commit  homicide  or  sacrilege,  is  not  binding." 
Just.  Inst.  lib.  3,  tit.  19,  par.  24.  In  our  jurisprudence  a  contract 
may  be  illegal  and  void  because  it  is  contrary  to  a  constitution  or  stat- 
ute, or  inconsistent  with  sound  policy  and  good  morals.  Lord  Mans- 
field said  (Jones  v.  Randall,  1  Cowp.  39) :  "Many  contracts  which  are 
not  against  morality,  are  still  void  as  being  against  the  maxims  of 
sound  policy." 

/    It  is  a  rule  of  the  common  law  of  universal  application,  that  where 

/a  contract  express  or  implied  is  tainted  with  either  of  the  vices  last 

/    named,  as  to  the  consideration  or  the  thing  to  be  done,  no  alleged 

j       right  founded  upon  it  can  be  enforced  in  a  court  of  justice. 

V  Before  considering  the  contract  here  in  question,  it  may  be  wellf 

\liy  way  of  illustration,  to  advert  to  some  of  the  cases  presenting  the 

subject   in  other  phases,  in   which   the  principle   has  been   adversely 

applied. 

Within  the  condemned  category  are :  An  agreement  to  pay  for  sup- 
porting for  election  a  candidate  for  sheriff,  Swayze  v.  Hull,  8  N.  J. 
Law,  54,  14  Am.  Dec.  399;  to  pay  for  resigning  a  public  position  to 
make  room  for  another,  Eddy  v.  Capron,  4  R.  I.  395,  67  Am.  Dec. 
541  ;  Parsons  v.  Thompson,  1  H.  Bl.  322;  to  pay  for  not  bidding  at 
a  sheriff's  sale  of  real  property,  Jones  v.  Caswell,  3  Johns.  Cas.  29, 

■•  Tiirt  of  thp  opinion  is  oniittcd. 


44  THE  RELATION  (Part  1 

2  Am.  Dec.  134;  to  pay  for  not  bidding  for  articles  to  be  sold  by  the 
government  at  auction,  Doolin  v.  Ward,  6  Johns.  194;  to  pay  for  not 
bidding  for  a  contract  to  carry  the  mail  on  a  specified  route,  Gulick  v. 
Bailey,  10  N.  J.  Law,  87,  18  Am.  Dec.  389;  to  pay  a  person  for  his 
aid  and  influence  in  procuring  an  office,  and  for  not  being  a  candidate 
himself.  Gray  v.  Hook,  4  N.  Y.  449;  to  pay  for  procuring  a  contract 
from  the  government.  Tool  Co.  v.  Norris,  2  Wall.  45,  17  L.  Ed.  868; 
to  pay  for  procuring  signatures  to  a  petition  to  the  governor  for  a 
pardon,  Hatzfield  v.  Gulden,  7  Watts,  152,  31  Am.  Dec.  750;  to  sell 
land  to  a  particular  person  when  the  surrogate's  order  to  sell  should 
have  been  obtained.  Overseers  of  Bridgewater  v.  Overseers  of  Brook- 
field,  3  Cow.  299;  to  pay  for  suppressing  evidence  and  compounding 
a  felony,  Collins  v.  Blantern,  2  Wils.  347 ;  to  convey  and  assign  a  part 
of  what  should  come  from  an  ancestor  by  descent,  devise,  or  distribu- 
tion, Boynton  v.  Hubbard,  7  Mass.  112;  to  pay  for  promoting  a  mar- 
riage, Scribblehill  v.  Brett,  4  Brown  Pari.  Cas.  144 ;  Arundel  v.  Tre- 
villian,  1  Ch.  Rep.  47 ;  to  influence  the  disposition  of  property  by  will 
in  a  particular  way,  Debenham  v.  Ox,  1  Ves.  276.  See,  also,  Add. 
Cont.  91;  1  Story,  Eq.  c.  7;  Collins  v.  Blantern,  1  Smith  L,ead.  Cas. 
676,  Am.  note. 

The  question  now  before  us  has  been  decided  in  four  American 
cases.  They  were  all  ably  considered,  and  in  all  of  them  the  contract 
was  held  to  be  against  public  policy,  and  void.  Clippinger  v.  Hep- 
baugh,  5  Watts  &  S.  315,  40  Am.  Dec.  519;  Harris  v.  Roof's  Ex'r, 
10  Barb.  489;  Rose  &  Hawley  v.  Truax,  21  Barb.  361;  Marshall  v. 
Railroad  Co.,  16  How.  314,  14  L.  Ed.  953.  We  entertain  no  doubt 
that  in  such  cases,  as  under  all  other  circumstances,  an  agreement  ex- 
press or  implied  for  purely  professional  services  is  valid.  Within  this 
category  are  included,  drafting  the  petition  to  set  forth  the  claim,  at- 
tending to  the  taking  of  testimony,  collecting  facts,  preparing  argu- 
ments, and  submitting  them  orally  or  in  writing,  to  a  committee  or 
other  proper  authority,  and  other  services  of  like  character.  All  these 
things  are  intended  to  reach  only  the  reason  of  those  sought  to  be  in- 
fluenced. They  rest  on  the  same  principle  of  ethics  as  professional 
services  rendered  in  a  court  of  justice,  and  are  no  more  exception- 
able. But  such  services  are  separated  by  a  broad  line  of  demarca- 
tion from  personal  solicitation,  and  the  other  means  and  appliances 
which  the  correspondence  shows  were  resorted  to  in  this  case.  There 
is  no  reason  to  believe  that  they  involved  anything  corrupt  or  different 
from  what  is  usually  practiced  by  all  paid  lobbyists  in  the  prosecution 
of  their  business. 

The  foundation  of  a  republic  is  the  virtue  of  its  citizens.  They 
are  at  once  sovereigns  and  subjects.  As  the  foundation  is  undermined, 
the  structure  is  weakened.  When  it  is  destroyed,  the  fabric  must  fall. 
Such  is  the  voice  of  universal  history.  1  Montesq.  Spirit  of  Laws,  17. 
The  theory  of  our  government  is,  that  all  public  stations  are  trusts, 
and  that  those  clothed  with  them  are  to  be  animated  in  the  discharge 


/  /ijo^i'  i'U^^  ^x^ut/  r-^-^ 

Ch.  3)  THE   PURPOSES   OF   THE   RELATION  *»        •^^•"""ZSO-^N^.^ 

of  their  duties  solely  by  considerations  of  right,  justice,  and  the  public 
good.  They  are  never  to  descend  to  a  lower  plane.  But  there  is  a 
correlative  duty  resting  upon  the  citizen.  In  his  intercourse  w^ith  those 
in  authority,  whether  executive  or  legislative,  touching  the  perform- 
ance of  their  functions,  he  is  bound  to  exhibit  truth,  frankness,  and. 


integrity.     Any  departure  from  the  line  of  rectitude  in  such  cases,  isX/l^^^ 
not  only  bad  in  morals,  but  involves  a  public  wrong.     No  people  can  ^/ 

have  any  higher  public  interest,  except  the  preservation  of  their  lib-iK-u--y  ^ 
erties,  than  integrity  in  the  administration  of  their  government  in  all    /A-'Olyj^y^ 

its  departments.  _  ^^XS^^-^      —^ 

The  agreement  in  the  present  case  was  for  the  sale  of  the  influence     "^/C-t-n!^ 
and  exertions  of  the  lobby  agent  to  bring  about  the  passage  of  a  law       ^ 
for  the  payment  of  a  private  claim,  without  reference  to  its  merits, 
by  means  which,  if  not  corrupt,  were  illegitimate,  and  considered  in      -  *  ^^I^LOC^ 
connection  with  the  pecuniary  interest  of  the  agent  at  stake,  contrary^,>^  ^     j*      y 
to  the  plainest  principles  of  public  policy.    No  one  has  a  right,  in  such        '/' 
circumstances,  to  put  himself  in  a  position  of  temptation  to  do  what    • 
is  regarded  as  so  pernicious  in  its  character.     The  law  forbids  the 
inchoate  step,  and  puts  the  seal  of  its  reprobation  upon  the  under 
taking. 

If  any  of  the  great  corporations  of  the  country  were  to  hire  ad- 
venturers who  make  market  of  themselves  in  this  way,  to  procure  the 
passage  of  a  general  law  with  a  view  to  the  promotion  of  their  pri- 
vate interests,  the  moral  sense  of  every  right-minded  man  would  in- 
stinctively denounce  the  employer  and  employed  as  steeped  in  corrup- 
tion,  and  the  employment  as  infamous.  !  f   ,?    •         -/■/•^ 

If  the  instances  were  numerous,  open,   and  tolerated,  they  woulc!  *  ' '- '    /M^^-C^/i 
be  regarded  as  measuring  the  decay  of  the  public  morals  and  the  de-       > 
generacy  of  the  times.     No  prophetic  spirit  would  be  needed  to  for-  ^     A^'^-^f^V 

tell  the  consequences  near  at  hand.     The  same  thing  in  lesser  legis-   , 
lation,  if  not  so  prolific  of  alarming  evils,  is  not  less  vicious  in  itself.  , 
nor  less  to  be  condemned.     The  vital  principle  of  both  is  the  same. 
The  evils  of  the  latter  are  of  sufficient  magnitude  to  invite  the  most 
serious  consideration.     The  prohibition  of  the  law  rests  upon  a  solid 
foundation.    A  private  bill  is  apt  to  attract  little  attention.    It  involves  . 
no  great  public  interest,  and  usually  fails  to  excite  much  discussion. /oy/ ,  \ 
Not  infrequently  the  facts  are  whispered  to  those  whose  duty  it  is 
to  investigate,  vouched  for  by  them,  and  the  passage  of  the  measure 
is  thus  secured.     If  the  agent  is  truthful,  and  conceals  nothing,  all  is 
well.     If  he  uses  nefarious  means  with  success,  the  spring-head  and         "^  r    f.\-;.'^/^ 
the  stream  of  legislation  are  polluted.    To  legalize  the  traffic  of  such  J/     '^  ,  /^     ■> 
service,  would  open  a  door  at  which  fraud  and  falsehood  would  notC-'wC  ' 
fail  to  enter  and  make  themselves   felt  at  every  accessible  point.     It 
would  invite  their  presence  and  offer  them  a  premium.    If  the  tempted /V^^f^^^^Jt^ 
agent  be  corrupt  himself,  and  disposed  to  corrupt  others,  the  transi-  i^i-^- 

tion  requires  but  a  single  step.     lie  has  the  means  in  his  hands,  with  ,  I 

every   facility  and  a  strong  incentive  to  use  tlicni.     The  widespread  V^^^^     1 


46  THE  RELATION  (Part  1 

suspicion  which  prevails,  and  charges  openly  made  and  hardly  denied, 
lead  to  the  conclusion  that  such  events  are  not  of  rare  occurrence. 
Where  the  avarice  of  the  agent  is  inflamed  by  the  hope  of  a  reward 
contingent  upon  success,  and  to  be  graduated  by  a  percentage  upon 
the  amount  appropriated,  the  danger  of  tampering  in  its  worst  form 
is  greatly  increased. 

It  is  by  reason  of  these  things  that  the  law  is  as  it  is  upon  the  sub- 
ject. It  will  not  allow  either  party  to  be  led  into  temptation  where 
the  thing  to  be  guarded  against  is  so  deleterious  to  private  morals 
and  so  injurious  to  the  public  welfare.  In  expressing  these  views, 
we  follow  the  lead  of  reason  and  authority. 

We  are  aware  of  no  case  in  English  or  American  jurisprudence  like 
the  one  here  under  consideration,  where  the  agreement  has  not  been 
adjudged  to  be  illegal  and  void. 

We  have  said  that  for  professional  services  in  this  connection  a 
just  compensation  may  be  recovered.  But  where  they  are  blended 
and  confused  with  those  which  are  forbidden,  the  whole  is  a  unit  and 
indivisible.  That  which  is  bad  destroys  that  which  is  good,  and  they 
perish  together.  Services  of  the  latter  character,  gratuitously  ren- 
dered, are  not  unlawful.  The  absence  of  motive  to  wrong  is  the  foun- 
dation of  the  sanction.  The  tendency  to  mischief,  if  not  wanting,  is 
greatly  lessened.  The  taint  lies  in  the  stipulation  for  pay.  Where 
that  exists,  it  affects  fatally,  in  all  its  parts,  the  entire  body  of  the  con- 
tract. In  all  such  cases,  protior  conditio  defendentis.  Where  there 
is  turpitude,  the  law  will  help  neither  party. 

The  elder  agent  in  this  case  is  represented  to  have  been  a  lawyer  of 
ability  and  high  character.  The  appellee  is  said  to  be  equally  worthy. 
This  can  make  no  difference  as  to  the  legal  principles  we  have  con- 
sidered, nor  in  their  application  to  the  case  in  hand.  The  law  is  no 
respecter  of  persons. 

Decree  reversed,  and  the  case  remanded,  with  directions  to  dismiss 
the  bill.s 

5  See,  also,  Tool  Co.  v.  Norris,  2  Wall.  53,  17  L.  Ed.  868  (1864),  and  com- 
pare with  Stanton  v.  Embry,  93  U.  S.  548,  23  L.  Ed.  983  (1876),  upholding  a 
contract  upon  a  contingent  fee  for  prosecuting  a  claim  against  the  govern- 
ment. That  a  contract  for  services  to  aid  or  protect  from  injurious  conse- 
quences in  the  future  violations  of  the  law  is  void,  see  Bowman  v.  Phillips, 
41  Kan.  364,  21  Pac.  230,  13  Am.  St.  Rep.  292,  3  L.  R.  A.  631  (1889). 


/  /''  -i.,s  '  vja[  -^-"^l 


Tif^nej  Sc  Cheney  t,  "^!ee^» 


here,   news-oaper  r»u"blishers,   bring 
recover  a  "bill   for  advertising, 
iiept   of  a  deTDuty  m^rsli^l,    in 
execution  in  f^vor  of  defs.  had 
collection.   The    'uestion   is 


P«  c  ts 

Ptfs. 
this  action  to 
done  at  the  re 
rhOPe  hands  ^n 
"^eei  ■nl'^ced  for 
r'-tther  ^  ^-itf,  in  execution  is  resnonsihle 
u^-in  every  contr'^ct  which  the  marshal  or  sheriff 
,  to  ^hom  the  execution  h^^s  heen  delivered,  may 
fi;id  it  necess^^ry  or  convenient  to  m-^ke,  in  order 
to  re^.der  the  Tjrocerp  e-pfectu^l. 
Co'  rt : 

The  rel*=tionshiT)  of  TDrincipf^l  and  agt  • 
is  in  ^11  crses  a  voluntary  relation,  s raring ing 
fiom  *-  contr^ct^,  to  which  the  consent  of  the 
parties  is  essential.  The  officer  is  not  selected 
by  the  -otf.  (def.  here),  ^'nd  he  has  no  power  to 
remove  him.  It  would  be  unfair  to  hold  him  liable 
for  the  acts  of  the  officer. 


VERDICT  FOR  DEF. 


'guild    ,si©rfsilffucf  tscrscrawsn   ^ei»!i  ,  a1:;t 
,3nisx:tieybB  toJ:   ilid  s  tevooei   o:f  n 

fs'^^ff  .8^65  ^0  toT'^a:  ni   noi;txro9xe  n^  a 

-^-s^m   ,bei8Y.cIe5  need  a^rf  nol;fuo»X9  ©rfit 
xebto  III    ,e?i^ffi   od   ^      "      ^noo  to   v^i'^a^eo 

,1  '^e   ^■'^eooTrr  erf:t 

-^nl^gxiitaB    ,noi:ti?I©i  •vrxs^rmlov  a  sea-^o 
6£[;t  lo   ;tneanoo   erf^  rfoiriw  o^    ^^o''%?. 
i.=  aosles  ^on  81   i©oi!tlo  eriT   .Ii=»i;tn©23« 

0^  •xswoor  on  sari  ©rf  fen**   ,(©t©£f   •tob) 
»ldBtI  mid  blori  ci   s.t&'lnu  &d   blxjow  *I   . 


Ch.4) 


CHAPTER  IV 


CREATION  OF  THE  RELATION 


^TwT^ 


SECTION  1.— IN  GENERAL. 


RANEY  &  CHENEY  v.  WEED. 
(Superior  Court  of  New  York,  1850.     3  Sandf.  577.) 

DuER,  J.^  This  is  a  motion  to  set  aside  a  report  of  a  referee,  as  con- 
trary to  law  and  evidence. 

The  action  is  brought  by  the  plaintiffs,  as  the  printers  and  publish- 
ers of  a  newspaper  in  the  state  of  Michigan,  to  recover  the  amount 
of  their  bill  for  printing  an  advertisement  of  the  sale  of  real  estate, 
under  an  execution  which  was  issued  from  the  circuit  court  of  the 
United  States  for  that  district,  upon  a  judgment  recovered  in  that 
court  by  the  present  defendants.  The  plaintiffs  were  employed  and 
authorized  to  publish  the  advertisement,  and  to  continue  its  publica- 
tion with  notices  of  the  postponement  of  sale  from  week  to  week, 
for  a  period  of  nearly  eighteen  months,  by  the  deputy  marshal,  in 
whose  hands  the  execution  had  been  placed  for  collection,  and  it  is 
insisted  that  this  employment  created  such  a  privity  between  the  plain- 
tiffs and  defendants  as  entitles  the  former  to  maintain  this  action. 
The  referee,  adopting  this  view  of  the  case,  has  reported  that  there 
is  due  to  the  plaintiffs  the  sum  of  $510,  which  is  the  amount  of  their 
bill  exclusive  of  interest. 

Upon  the  hearing,  various  objections  to  the  report,  arising  upon 
the  facts  as  well  as  upon  the  law,  were  forcibly  urged  by  the  counsel 
for  the  defendants,  but  the  only  question  we  have  found  it  necessary 
to  consider,  and  shall  determine,  is  the  main  question  of  law,  upon 
which  the  right  of  the  plaintiffs  to  recover  at  all  depends,  namely, 
whether  there  exists  such  a  privity  of  contract  or  of  law,  between 
them  and  the  defendants,  as  can  render  the  latter  personally  lia- 
ble.    *     *     * 

In  our  judgment,  therefore,  the  liability  of  the  defendants  depends 
solely  upon  the  proper  answer  to  be  given  to  the  general  question, 
whether  the  plaintiff  in  an  execution  is  directly  and  personally  re- 
sponsible upon  every  contract  which  the  marshal  or  sheriff,  to  whom 
the  execution  has  been  delivered,  may  find  it  necessary  or  convenient 
to  make,  in  order  to  render  the  process  effectual.     *     *     ♦ 


1  Part  of  the  opinion  is  omitted. 


48  THE  RELATION  (Part  1 

The  argument  tliat  has  been  reHed  on  in  this  case  as  supplying  this 
demonstration  may  be  stated  in  a  few  words.  It  is  said  that  a  mar- 
shal or  sheriff,  to  whom  a  fi.  fa.  or  other  process  has  been  delivered, 
becomes  by  the  very  act  of  its  delivery  the  agent  of  the  plaintiff  in 
whose  favor  it  is  issued.     *     *     * 

We  have  always  understood,  and  until  better  instructed  must  con- 
tinue to  believe,  that  the  relation  of  principal  and  agent  is  in  all  cases 
a  voluntary  relation,  springing  from  a  contract,  to  which,  as  to  all 
other  contracts,  the  consent  of  the  parties  is  essential.  It  is  described 
and  treated  as  a  purely  voluntary  relation  by  all  the  text  writers,  by 
Paley,  by  Livermore,  and  by  Judge  Story,  whose  treatise  upon  the 
subject,  although  one  of  the  earliest,  is  perhaps  the  most  complete  and 
accurate  of  his  numerous  publications.  As  all  these  writers  explain 
the  relation,  it  is  from  the  principal,  and  from  the  principal  alone,  that 
the  agent  derives  his  authority.  It  is  the  will  of  his  principal  that 
fixes  the  limits  of  his  authority,  regulates  its  exercise  and  determines 
its  existence.  The  principal  appoints,  directs,  controls,  removes  him. 
It  is  plain  that  these  observations  cannot  be  applied  to  the  relation 
between  the  marshal  or  sheriff,  and  the  suitors,  who  in  the  prosecution 
of  their  legal  rights  are  constrained  to  employ  him.  As  they  have  not 
the  power  of  selection,  nor  he  the  liberty  of  refusal,  it  cannot  be  said 
that  this  relation  flows  from  the  will  of  the  parties.  It  is  the  creation 
of  the  law,  not  the  result  of  a  contract.  He  is  a  public  officer,  who, 
when  he  acts  for  individuals,  acts,  not  by  virtue  of  their  choice  or  of 
his  own  agreement,  but  in  discharge  of  a  positive,  independent  duty. 
He  is  appointed  by  the  government,  or  elected  by  the  people,  is  re- 
movable only  by  the  appointing  power  or  by  process  of  law,  and  unless 
where  special  instructions  are  given  to  him,  it  is  the  law,  and  the  law 
alone,  that  defines  his  authority  and  prescribes  his  duties,  and  controls 
him  in  their  discharge.  When  special  directions  are  given  to  him  the 
plaintiff  is,  doubtless,  responsible  for  his  acts,  so  far  as  the  directions 
are  followed,  and  in  such  cases  the  officer,  within  a  limited  sphere 
and  in  a  restricted  sense  of  the  term,  becomes  the  agent  of  the 
suitor.     *     *     * 

We  do  not  deny,  but  on  the  contrary  distinctly  admit,  that  in  every 
civil  suit  in  which  the  sheriff  is  employed,  a  privity,  avid  therefore  a 
mutual  liability,  does  exist  between  him  and  the  plaiiftiff,  but  it  is  a 
privity  which  the  law,  and  not  the  consent  of  the  parties,  creates  and 
defines.  It  does  not  flow  from  the  ordinary  relation  of  principal  and 
agent,  nor  is  it  governed  by  the  rules  upon  which  the  rights  and  liabili- 
ties of  the  parties  in  that  relation  usually  depend.  There  is,  indeed,  a 
partial  analogy,  by  which  the  counsel  for  the  plaintiff  and  the  referee 
have  probably  been  misled,  but  the  analogy  fails  in  the  material  cir- 
cumstances upon  which  the  liability  of  a  principal  for  the  acts  of  his 
agent  is  reasonably  founded.  It  is  perfectly  just,  that  he,  who  em- 
ploys an  agent,  should  be  responsible  for  the  acts,  within  the  scope 
of  his  authority,  of  the  person  whom  he  selects,  trusts  and  controls; 


Pole  v>  Leask« 
Pacts : 

Ptf«  was  introduced  to  def.  by  one 
-^nderson^  During  the  interview  ptf.  v/as  directed 
to  make  certain  purchases  under  the  directions 
and  orders  of  i^jiderson.  Some  were  made  and  ack- 
nowledged "by  def.  Thereafter  /inderson  ordered  ptf. 
to  make  certain  purchases,  and  appropriated  the 
money  and  goods  to  his  own  use.  Ptf.  sues  to 
hold  def.  liable  on  the  ground  th^t  they  had 
made  Anderson  a  partner  or  at  least  an  agt. 
The  -orevailing  opinion  held  def.  liable  on  this 
g-round .  The  dissenting  opinion  is  p-iven  in  the 
book.  ^      J     H        , 

Court :         (Uy^AJU^  ^^^-^^ 

(l)   No  t'»er!='on  oen   become  the  agt.  of 
•-nother  exce-ot  bv  the  will  of  thrt  other  person, 
rh' ch  mpy  he  e^n^rerped  or  implied. 

'  f*^)  Burden  of  Droof  is  on  the  person 

d«'T'  -?  Tith  nnvone^fs  an  ^'gt.. ,  through  whom  he 
rep'-^  to  ch*=;rgeTjiother  as  principal. 


©no  \d   ,165   oo'    b&onbO'i^ai   saw  .l;t' 

5e^a»ii5  saw  ♦Id'g  Wf^ivxedrii   erf-l  ^gni^irG 

Bnoi^Qeixb  ed^  lebiiu  a©8«xioixrq  nls:fi< 

~^os  fenB  efiam  ©lew  ©moB   *nosieBxi^.  lo  i 

o'J"  sens   •l^'i  .©ex;  xxwo  alrf  oi  86003 
J&Bri     -^©rf^   i?.«j:fj    bnsjoi-g  ©rfj"  no   ©IdaxI 

aid;?  no   elcfBil   »^©b   51©ff  nolniao  3nll. 
©rfd'  nl  iisTJ-5   gi   noinJ^cro  3niitn©38i5  ©j 

X'.    ,  u,^  .   ©rf-i    ©mooed"  n3o  xio^t©<T   oPI   (l 

,n03i©Q"  leiido   ;t=^ff;t  lo  II iw  ©.^i   ^,^cf  ;tcf©o: 

•  6©llami   10   be'^^^ezn^xe  ©ff 

£ios'x©-cr  srfi   no   ax  loota  ^o  neoTirS   C'*' 

©if  aioriw  rf:sij(5irr;f    .•;t3i<=5  ^s  s^^^©no7a3   ril^ 

"^  ,I^.cflOG..'i?t  3B  T©rf;ton.^  ■©•gis^rfi 


Ch.4) 


CREATION  OF  THE  RELATION 


49 


but  it  is  not  just  that  any  person  should  be  responsible  for  the  acts  of 
a  public  officer,  whom,  without  regard  to  his  own  wishes,  the  law  com- 
mands, and  unless  he  choose  to  abandon  his  rights,  compels  him  to 
employ. 

It  is  not  just  that  he  should  be  liable  for  the  acts  of  a  person  whom 
he  does  not  select,  may  not  trust,  and  has  no  power  to  remove.  So 
far  as  by  special  instructions  he  controls  his  discretion,  and  so  far  as 
he  participates  in  the  wrongful  acts  of  the  officer,  he  is  justly  liable, 
and  no  further.     *     *     * 

The  report  must  be  set  aside,  with  costs  to  abide  the  event.^    ^  * 


POLE  V.  LEASK. 

(House  of  Lords,   1862.     9  Jur.   N.    S.  829,   33  L.   J.   Ch.  155 

N.  S.  645.) 

Leask,  a  broker  in  the  colonial  fruit  trade,  was  introduced  to  Pole 
&  Co.  by  one  Anderson,  and  was  at  the  interview  directed  to  make 
purchases  under  the  direction  and  orders  of  Anderson.  Large  pur- 
chases were  made,  and  acknowledged  by  Pole  &  Co.  as  made  in  ac- 
cordance with  their  intentions,  up  to  a  certain  period.  Thereafter, 
Anderson  ordered  Leask  to  make  further  purchases,  and  fraudulently 
appropriated  to  himself  moneys  and  goods,  so  that  there  was  a  loss 
on  the  business.  Leask  sued  to  hold  Pole  &  Co.  liable  on  the  ground 
that  they  had  made  Anderson  a  partner,  or  at  least  an  agent.  The 
Lord  Chancellor  rendered  the  prevailing  opinion,  holding  Pole  &  Co. 
liable  upon  those  grounds. 

Lord  Cranworth  did  not  regard  the  facts  as  showing  even  an 
agency  at  the  time  of  the  purchases,  and  in  a  much  quoted  dissenting 
opinion  laid  down  the  following  propositions : 

My  Lords,  before  I  examine  in  detail  the  facts  of  this  case,  I  desire 
to  advert  very  shortly  to  one  or  two  general  propositions  connected 
with  the  law  of  agency,  which  I  think  were  sometimes  lost  sight  of 
in  the  argument  of  this  case  at  your  Lordship's  bar.  First,  their/  as 
to  the  constitudon  by  the  principal  of  another  to  act  as  his  agent./  No 
one  can  becom^he  agent  of  another  person  except  by  the  will  ofVthat 
other  person.  His  will  may  be  manifested  in  writing,  or  orally,  or 
simply  by  placiu^  another  in  a  situation  in  which,  according  to  ordi- 
nary rules  of  Jdw,  or  perhaps  it  would  be  more  correct  to  say,  accord- 
ing to  the  ordinary  usages  of  mankind,  that  other  is  understood  to 
represent  and  act  for  the  person  who  has  so  placed  him ;   but  in  every 

2  Seo,  also,  Markwick  v.  IliirdliiKliani,  l.T  Cli.  Div.  339,  43  L.  T.  Rep.  N.  S. 
647,  29  W.  K.  .361    (1880),  hnldiiiK  that  the  relation  of  principal  and  apent 
requires  the  consensus  of  itoth  parties;    Central  Trust  Co.  v.  Bridges,  57  Fed. 
753,  764,  6  C.  C.  A.  539  (1893);    In  re  Carpenter  (D.  C.)  125  Fed.  831  (1903). 
GoDD.Pa.&A. — 1  I    H  ,        , 


cUe 


fc':?S&''^'^?n 


50 


TOE    RELATION 


(Part  1 


case  it  is  only  by  the  will  of  the  employer  that  an  agency  can  be 
reated. 

This  proposition,  however,  is  not  at  variance  with  the  doctrine,  that 
where  one  has  so  acted  as  from  his  conduct  to  lead  another  to  believe 
that  he  has  appointed  some  one  to  act  as  his  agent,  and  knows  that 
that  other  person  is  about  to  act  on  that  behalf,  then,  unless  he  in- 
terposes, he  will,  in  general,  be  estopped  from  disputing  the  agency, 
though  in  fact  no  agency  really  existed.  It  is,  however,  necessary  to 
bpr  in  mind  the  difference  between  this  agency  by  estoppel,  if  I  may 
so  designate  it,  and  a  real  agency  however  constituted. 

Another  proposition  to  be  kept  constantly  in  view  is,  that  the  bur- 
den of  proof  is  on  the  person  dealing  with  any  oT*e  as  an  agent,  through 
wW)m  he  seeks  to  charge  another  as  principal.  |  He  must  show  that 
the  agency  did  exist,  and  that  the  agent  had  the  authority  he  assumed 
to  exercise,  or  otherwise  that  the  principal  is  elstopped  from  disput- 
ing it.^ 

Unless  this  principle  is  strictly  acted  on,  great  injustice  may  be  the 
consequence;  for  any  one  dealing  with  a  person  assuming  to  act  as 
agent  for  another  can  always  save  himself  from  loss  or  difficulty  by 
applying  to  the  alleged  principal  to  learn  whether  the  agency  does  ex- 
ist, and  to  what  extent.  The  alleged  principal  has  no  similar  mode  of 
protecting  his  interests ;  he  may  be  ignorant  of  the  fact  that  any  one 
is  assuming  to  act  for  him,  or  that  persons  are  proposing  to  deal  with 
another  under  the  notion  that  that  other  is  his  agent.  It  is,  therefore, 
important  to  recollect  constantly  where  the  burden  of  proof  lies. 


wvmAa^^'''^ 


In  GEYLIN  V.  DE  VILLEROI  (1860)  2  Houst.  (Del.)  311,  the 
court  (GiivPiN,  C.  J.)  gave  to  the  jury  these  instructions :  * 

"There  is  no  special  character  or  description  of  written  instrument, 
nor  any  particular  form  of  words,  necessary  to  the  appointment  of 
an  agent.  The  modes  of  appointment  are  various,  and  the  agency  may 
be  created  either  by  express  words,  or  acts  of  the  principal,  or  it  may 
be  implied  or  inferred  from  the  circumstances  and  conduct  of  the 
parties.  The  authority  conferred  may  be  either  general  or  special ; 
and  the  fact  of  agency,  of  either  description,  may  be  established,  either 
by  direct  or  indirect  evidence.  It  may  be  shown  directly,  by  express 
words  of  appointment,  either  spoken  or  written.  Or,  it  may  be  im- 
plied or  inferred,  or  mdirectiy  shown,  by  evidence  of  the  relative  sit- 
uation of  the  parties,  the  nature  of  the  business  which  is  the  subject 
of  controversy,  and  the  character  of  the  intercourse  between  them, 
provided  the  facts  and  circumstance  disclosed  by  the  evidence,  fairly 

3  See,  also,  Hill  v.  Helton,  SO  Ala.  528,  1  South.  340  (1886),  post,  p.  773, 
lioidiug  that  to  establish  agency  the  alleged  principal  must  in  some  way,  di- 
rectly or  indirectly,  be  connected  with  the  circumstances. 

4  Another  portion  of  these  instructions  is  found  post,  pp.  334,  774. 


Ch.4) 


CREATION  OF  THE  RELATION 


51 


justify  such  an  inference.  The  acts  and  doings  of  the  party  sought 
to  be  charged  as  principal,  in  relation  to  the  subject  matter,  may  be, 
and  often  are,  quite  as  expressive  and  significative  as  words  spoken.^ 


SECTION  2.— IMPLIED  AGEN 


TRUNDY  V.  FARRAR. 
(Supreme  Judicial  Court  of  Maiue,  1850.    32''Me.  ^25.) 

Assumpsit  upon  three  negotiable  notes  given  by  defendant  to  the 
proprietors  of  the  town  of  Bailey ville,  indorsed  by  "Samuel  Kelly, 
Agent."  The  authority  of  Kelly  so  to  indorse  the  notes  is  the  question 
of  the  case.  To  prove  his  agency  plaintififs  offered  to  show  by  parol 
that  he  had  acted  as  agent  of  the  proprietary  from  1834  to  the  present 
time,  giving  deeds,  indorsing  notes,  bringing  suits,  and  taking  care  o 
the  property.  The  court  ruled  this  evidence  inadmissible  for  "Ci^L/t^  C 
purpose.    They  then  introduced  records  of  the  proprietors  showing  the*  ^  v  ~j^y^ 

choice  of  Kelly  as  agent,  and  that  he  had  acted  as  agent  from  his^'^^^'T'^"^^  ^.^ 
election  to  the  present  time,  that  they  have  no  other  agent,  and  that  ^*^'"*''^^"^^         ^ 
he  had  transacted  all  their  business.     This  and  other  similar  evidence /^SOx^^-^--*-^  ^^^UiC 
the  presiding  judge  ruled  insufficient  to  show  authority  in   Kelly  to     /  / 

indorse  notes. 

If,  in  the  opinion  of  the  whole  court,  the  aforesaid  rulings  were 
correct,  and  the  evidence  insufficient  to  maintain  the  action,  the  plain- 
tiff is  to  be  nonsuit ;   otherwise  a  new  trial  is  to  be  granted. 

Tenxkv,  J.    "A  general  agency  exists,  where  there  is  a  delegation  to*^ 
do  all  acts  connected  with  the  particular  business  or  employment."' 
Story's  Agency,  §  17.    "The  principal  will  be  bound  by  the  acts  of  his 
agent,  within  the  scope  of  the  general  authority  conferred  on  him." 
Ibid.  §  126. 

The  authority  of  an  agent  may  be  created  verbally,  without  writing, 
excepting  for  some  special  acts,  and  may  be  inferred  from  the  relation 
of  the  parties,  and  the  nature  of  the  employment,  without  proof  of 
any  express  appointment.  It  is  sufficient  if  there  be  satisfactory  evi- 
dence of  the  fact,  that  the  principal  employed  the  agent,  and  that  the 
agent  undertook  the  trust.  The  agency  must  be  antecedently  given. 
or  be  subsc(|uently  adopted.    2  Kent's  Com.  Lect.  41,  pp.  477  and  478. 

It  is  very  usual  to  prove  the  agency  by  inference  from  the  habits 
and  course  of  dealing  between  the  i)arties.  These  may  be  such  as  to 
show  that  there  was  an  appointment  sufficiently  broad  to  cover  the 

c  See,  also,  Hall  v.  Smith,  ?,  Kan.  Api).  (!Sn.  44  Pac.  908  (1890),  and  Sterna- 
man  V.  Motropoliiaii   Life  Jus.  Co.,  ante,  p.  2,  Keyiiell  v.  Lewis,  15  M.  &  W.     -I  n  aJL. 
517,  527  (1840).  .        ,  ,  y  -t    n  ^  J-    0^  '^^         ' 


o^nyir-^ 


u/t 


(;jMAit>^''^^ 


52  THE  RELATION  (Parti 

acts  done  by  the  agent,  or  that  there  has  been  a  continued  ratification 
thereof;  the  principal  would  be  bound  by  either.  "Having  himself 
recognized  another  as  his  agent,  by  adopting  and  ratifying  his  acts, 
done  in  that  capacity,  the  principal  is  not  permitted  to  deny  the  rela- 
tion to  the  injury  of  third  persons."  2  Greenl.  Ev.  §  65;  Story  on 
Agency,  §§  56,  127.  "When  an  agency  actually  exists,  the  mere  ac- 
quiescence may  well  give  rise  to  the  presumption  of  an  intentional 
ratification  of  the  act."  Ibid.  §  256. 
/  On  the  question,  whether  a  person  is  an  agent  of  a  corporation  or 
/  not,  the  same  presumptions  are  applicable  to  such  bodies,  as  to  in- 
I  dividuals,  and  that  a  deed,  or  a  vote  or  by-law  is  not  necessary  to 
Y  establish  a  contract,  promise  or  agency.  Maine  Stage  Co.  v.  Longley, 
14  Me.  444;  2  Greenl.  Ev,  §  62.  "In  America  the  general  doctrine  is 
now  firmly  established,  that  whenever  a  corporation  is  acting  within 
the  scope  of  the  legitimate  purposes  of  its  institution,  all  parol  con- 
tracts made  with  its  authorized  agents,  are  express  contracts  of  the 
corporation."  Story's  Agency,  §  53.  "In  all  matters  of  daily  ne- 
cessity within  the  ordinary  powers  of  the  officers  of  a  corporation 
aggregate,  or  touching  its  ordinary  operations,  the  authority  of  its 
agents  may  be  proved,  as  in  the  case  of  private  persons."  2  Greenl. 
Ev.  §  62. 

The  notes  in  suit  were  given  by  the  defendant  to  the  proprietors  of 
Baileyville,  for  a  lot  of  land,  which  he  purchased  of  them,  and  in- 
dorsed by  Samuel  Kelly  as  agent.  The  questions  presented  are, 
whether  there  was  sufficient  evidence  from  the  vote  of  the  proprietors, 
of  authority  in  Kelly  to  negotiate  the  notes  in  their  behalf ;  and  wheth- 
er there  was  evidence  before  the  jury  upon  which  they  should  have 
passed  in  relation  to  the  existence  of  the  agency,  arising  from  the  con- 
■*   duct  of  the  proprietors. 

The  vote  passed  June  9,  1834,  was  introduced  as  evidence  by  the 
plaintifif,  without  objection,  and  is  in  these  words;  "Voted,  that  the 
agent  be  and  is  authorized  to  bargain  and  sell  any  of  the  lands  of  the 
proprietors,  to  attend  to  the  disposing  of  the  grass  thereon,  and  the 
working  out  of  the  proprietor's  taxes,  and  to  attend  to  such  other 
business  as  may  concern  the  general  interest."  This  vote  is  very  com- 
prehensive. The  terms  used,  in  the  vote  of  an  organized  proprietary, 
would  authorize  the  transfer  of  their  lands  by  their  agent.  The  right 
to  bargain  and  sell  them  involves  the  power  to  receive  the  considera- 
tion. The  authority  to  attend  to  such  other  business  as  may  concern 
the  general  interest,  will  embrace  the  power  to  receive  notes,  for  the 
consideration  and  payment  of  the  same ;  and  if  it  was  found  more  for 
the  interest  of  the  proprietors  to  negotiate  those  notes,  than  to  obtain 
the  sums  secured  thereby,  by  directly  calling  upon  the  makers,  it  would 
not  exceed  the  limits  of  the  agency. 

It  was  shown  by  the  records  that  Samuel  Kelly  was  chosen  agent  in 
the  year  1834,  and  that  he  had  acted  as  such  from  that  time,  to  the 


Ch.  4)  CREATION  OF  THE  RELATION  53 

time  of  the  trial  of  the  action,  indorsing  and  transferring  notes,  given 
for  lands,  sold  by  him  as  their  agent,  giving  deeds  and  generally  trans- 
acting their  business,  and  all  their  business,  they  having  no  other  agent ; 
that  in  the  year  1836  the  greater  part  of  their  lands,  then  unsold,  was 
transferred,  to  be  held  in  severalty ;  and  that  the  notes  and  securities 
held  at  that  time,  were  transferred  to  him.  The  proprietors  having 
elected  Kelly  as  their  agent,  for  some  purpose,  these  acts  of  his,  it 
may  fairly  be  inferred,  were  known  to  them,  and  were  acquiesced  in. 
A  jury  might  be  authorized  to  make  the  inference,  that  as  he  took 
notes  as  the  consideration  of  deeds  given  by  him  of  the  proprietors' 
lands,  and  transferred  notes  given  therefor;  and  as  the  notes  and 
securities  held  by  the  proprietors  were  transferred  by  the  proprietors 
themselves,  he  was  their  general  agent,  and  clothed  with  the  power  to 
do  that,  which  had  for  so  long  a  time  been  done  without  any  objec- 
tion, made  by  them.  The  acquiescence  of  the  proprietors  in  these 
acts,  many  of  which  must  have  been  generally  known,  during  the  time, 
he  acted  as  their  sole  agent,  and  they  had  meetings  and  passed  votes  in 
relation  to  his  authority,  was  evidence  that  they  had  authorized  him  to 
transact  their  business  in  the  manner  in  which  he  did  it,  and  that  he 
was  possessed  of  full  power  to  perform  all  the  duties  of  their  general 
agent. 

The  objection  to  Kelly's  authority  to  transfer  the  notes  in  suit  does 
not  come  from  the  proprietors,  but  from  the  defendant,  who  dealt  with 
them  through  their  agent,  Kelly.  He  received  the  value  of  the  notes, 
and  is  bound  to  pay  the  amount  to  some  one.  The  facts  in  proof  are 
such  as  would  induce  the  plaintiff  to  conclude,  that  Kelly  was  the 
agent ;  or  was  held  out  to  the  world  as  such,  and  if  so,  good  faith  re- 
quires, that  the  proprietary  should  be  bound  by  his  acts.*^  This  would 
effectually  protect  the  plaintiff  from  loss,  and  would  equally  secure  the 
defendant  from  all  exposure  to  pay  his  notes  a  second  time.  We  think, 
independent  of  the  vote  of  the  proprietors,  there  was  evidence  of  the 
agency  of  Kelly,  which  might  with  propriety  be  submitted  to  a  jury. 

According  to  the  agreement  of  the  parties,  the  action  is  to  stand  for 
trial. 

c  The  impliofl  aiithoi-it,y  ref?ts  not  so  much  upon  the  number  as  upon  the 
character  of  the  previous  acts  of  the  agent.  In  Anderson  v.  Johnson,  74 
Minn.  171,  77  N.  W.  20  (1S98),  it  was  held  that  "a  single  act  of  an  assumed 
agent,  and  a  single  recognition  of  his  authority  by  his  principal,  if  sufficiently 
positive  and  comprehensive  in  their  character,  may  be  sufficient  to  prove 
agency  to  do  similar  acts" — quoting  Wilcox  v.  C,  M.  &  St.  P.  R.  Co.,  24  Minn 
269  (1877). 


THE    RELATION  (Part  1 


GREGORY  V.  LOOSE. 

(Supreme  Court  of  Washington,  1898.    19  Wash.  599.  54  Tac.  .33.) 

Action  against  Loose,  doing  business  as  the  Riverside  Shingle 
Company.    Appeal  from  judgment  for  plaintiff. 

Anders,  J.  On  and  prior  to  February  5,  1895,  the  Riverside  Shingle 
Company  was  the  owner  of  a  shingle  mill  at  Machias,  in  Snoho- 
mish county ;  and  on  or  about  that  day  it  conveyed  all  of  its  prop- 
erty, including  the  shingle  mill,  to  the  Snohomish  National  Bank, 
in  payment  of  its  indebtedness  to  the  bank.  The  mill  was  there- 
after known  and  designated  as  the  Riverside  Shingle  Mill.  Soon 
after  the  transfer  the  bank  started  up  the  mill,  under  the  general 
supervision  of  appellant,  Loose,  who  was  the  bank's  cashier,  and 
proceeded  to  manufacture  shingles  from  bolts  furnished  by  other 
parties  having  them  for  sale.  One  R.  P.  Mathews  was  employed  to 
operate  the  mill,  with  authority  to  contract  for  and  estimate  shingle 
bolts,  subject  to  the  approval  of  the  appellant.  In  September  or  Oc- 
tober, 1895,  said  Mathews  employed  one  C.  R.  Gregory  to  construct  a 
logging  road  to  some  timber  which  appellant  had  contracted  for,  and 
which  was  to  be  cut  either  by  appellant  or  his  vendors,  and  removed 
within  five  years  from  the  date  of  the  contract,  which  contract  was  in 
writing.  Said  Gregory,  by  the  direction  or  consent  of  Mathews,  em- 
ployed the  respondent  and  several  other  persons  to  labor  on  the  road. 
As  superintendent  of  construction,  said  Gregory  kept  the  time  of  the 
men  employed,  and  on  or  about  October  25,  1895,  demanded  from  Mr. 
Loose  the  amount  alleged  to  be  due  them  respectively  for  their  labor. 
Payment  was  refused  on  the  ground  that  the  making  of  the  road  had 
not  been  authorized  by  appellant,  and  that  neither  appellant  nor  the 
bank  had  any  knowledge  that  it  was  being  constructed.  This  action 
was  thereupon  instituted  to  recover  the  amount  claimed  to  be  due 
respondent  and  others,  whose  claims  were  assigned  to  him,  for  labor 
performed  in  the  construction  of  the  road. 

It  is  not  claimed  that  either  the  respondent  or  any  of  his  assignors 
was  personally  requested  or  authorized  by  Mr.  Loose  to  perform  the 
labor  for  the  value  of  which  this  action  is  waged,  but  the  contention  is 
that  Mathews  was  appellant's  agent  to  construct  the  road,  and  as  such 
agent  was  authorized  to  bind  appellant  for  the  payment  for  the  labor 
performed  thereon.  And  it  cannot  reasonably  be  claimed  that  Math- 
ews' act  in  authorizing  Mr.  Gregory  to  construct  the  road  was  rat- 
ified by  the  appellant,  for  we  discover  no  evidence  of  such  ratification 
in  the  record.  If,  therefore,  Mathews  was  the  agent  of  appellant  for 
the  purpose  claimed,  it  was  either  because  appellant  held  him  out  to 
the  public  as  such  agent,  or  because  what  he  did  in  that  regard  was 
within  the  authority  which  appellant  had  actually  given  him,  or  within 
the  apparent  authority  which  he  knowingly  and  without  dissent  per- 
mitted him  to  assume.     1  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  pp.  988,  989. 


^._,^  .     .   ,  iU-AAJJL  ~VUn<JL  CtnU^  (kjL  i^^A^icky 

Ch.  4)  CREATION  OF  THE  RELATION  55 

The  actual  authority,  as  we  have  said,  which  was  delegated  to 
Mathews,  was  authority  to  operate  the  Riverside  Shingle  Mill,  and  to 
contract  for  shingle  bolts,  and  estimate  the  value  thereof,  subject  to 
the  approval  of  appellant.  The  bolts  were  paid  for  in  every  instance 
by  appellant  at  the  bank,  and  generally,  if  not  always,  by  checks 
signed:  "Riverside  Shingle  Mill.  U.  K.  Loose,  Agent."  During  Math- 
ews' employment  at  the  mill,  he  sometimes  gave  orders  on  merchants 
for  the  delivery  of  limited  quantities  of  groceries  or  other  merchandise 
to  men  who  were  furnishing  shingle  bolts  or  working  in  the  mill.  The 
amount  of  the  respective  orders  was  reported  to  appellant  by  Mathews, 
and  was  generally  deducted  from  the  sum  due  to  the  person  who  re- 
ceived the  goods,  and  paid  to  the  drawee,  although  it  appears  that  in 
several  instances  such  payment  was  refused. 

Respondent  introduced  evidence  at  the  trial  to  the  effect  that  Math- 
ews negotiated  a  contract  for  timber  for  appellant  with  certain  desig- 
nated persons,  but  the  contract  was  finally  executed  by  appellant  him- 
self, and  contained  no  provision  whatever  for  the  building  of  a  logging 
road;  and  this,  too,  notwithstanding  the  fact  that  the  witness  C.  R. 
Gregory  testified  that  Mathews,  when  negotiating  for  the  timber,  said 
to  the  vendors  thereof,  who  were  insisting  that  a  road  should  be  con- 
structed to  it,  "We  will  make  the  contract  with  this  in  it,  and  we  will 
build  that  road  immediately."  This  is  the  contract  which  we  mentioned 
above  as  providing  for  the  removal  of  the  timber  purchased  within 
five  years.  Evidence  was  also  introduced  by  respondent  to  the  effect 
that  Mathews  made  an  arrangement  with  one  Eddy  for  a  right  of  way 
over  his  land  for  a  logging  road  in  favor  of  appellant,  and  located  the 
same;  but,  like  the  timber  contract,  this  contract,  which  was  a  lease 
for  a  term  of  five  years,  was  executed  by  appellant  himself, — one 
Packard,  as  well  as  said  Eddy,  being  a  lessor. 

The  first  and  principal  question  to  be  determined  is,  do  the  facts 
above  set  forth,  singly  or  together,  warrant  the  finding  that  Mathews 
had  the  power  to  bind  the  appellant  by  the  act  of  authorizing  the  build- 
ing of  the  road  in  question  ?  And  we  are  of  the  opinion  that  this  ques- 
tion must  be  answered  in  the  negative,  for  no  such  power  o^n  legiti- 
mately be  deduced  from  the  facts  appearing  in  the  record,  lit  is  true 
that  an  agency  to  do  a  particular  thing  may  be  implied  fromVhe  habits 
and  general  course  of  dealing  between  the  parties,  but  in  this  instance 
nothing  of  the  kind  could  be  shown,  as  no  lodging  road  had  ever  been 
constructed  or  authorized  by  the  appellant.  J  It  is  also  true  that  the 
authority  to  act  as  an  agent  in  a  particular  business  or  transaction  may 
often  be  implied  from  acts  done  in  the  course  of  the  agent's  employ- 
ment in  some  other  business.  "I'ut  it  is  not  to  be  inferred,  however, 
that  authority  is,  in  any  case,  to  be  implied  without  reason,  or  pre- 
sumed without  cause.  The  implication  must  be  based  upon  facts,  and 
cannot  arise  from  any  mere  argument  as  to  the  convenience,  utility,  or 
propriety  of  its  existence.     So,  too,  the  facts  from  which  it  is  sought  to 


.■)6  THE    RELATION  (Parti 

be  implied  are  to  be  given  their  natural,  legal,  and  legitimate  effect, 
and  this  effect  is  not  to  be  expanded  or  diminished  in  order  to  establish 
or  overthrow  the  agency."  Mechem,  Ag.  §  85.  See,  also,  Story,  Ag. 
§  87;  McAlpin  v.  Cassidy,  17  Tex.  449.  But  it  is  well  settled  in  the 
law  of  agency  that  the  extent  of  implied  authority  is  limited  to  acts 
of  a  like  kind  with  those  from  which  it  is  implied,  and  that  an  implied 
power  is  never  extended  by  construction  beyond  the  obvious  purpose 
for  which  it  is  granted.  1  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  p.  1002; 
Mechem,  Ag.  §§  85,  274,  312;  Story,  Ag.  §  87;  McAlpin  v.  Cassidy, 
supra ;  Graves  v.  Horton,  38  Minn.  66,  35  N.  W.  568.'' 

Applying  these  principles,  it  seems  plain  to  us  that  the  building  of  a 
logging  road  was  not  within  the  scope  of  the  authority,  real  or  appar- 
ent, delegated  to  Mathews;  for  it  is  an  act  of  an  entirely  different 
kind   from  that  of  operating  a  shingle  mill,  contracting  for  shingle 
bolts,  or  conducting  preliminary  negotiations  for  a  right  of  way,  or 
the  purchase  of  a  quantity  of  timber.     In  our  judgment,  if  it  can  be 
inferred  from  the  facts  in  this  case  that  he  was  authorized  to  build  the 
road  in  question,  it  might  with  equal  propriety  be  inferred  that  he 
was  authorized  to  construct  a  railroad  at  the  expense  of  the  appellant, 
for  the  one  is  as  foreign  to  his  employment  as  the  other.    It  was  the 
duty  of  Mr.  Gregory  to  ascertain  the  extent  of  Mr.  Mathews'  authority 
before  engaging  in  this  undertaking,  and  he  had  no  reasonable  excuse 
for  not  ascertaining  it.     Hurley  v.  Watson,  68  Mich.  531,  36  N,  W. 
726.    He  could  have  ascertained  the  fact  by  simply  asking  a  question, 
but,  instead  of  doing  so,  he  relied  upon  the  acts  and  representations  of 
the  assumed  agent;  and  he  admitted  in  his  testimony,  in  effect,  that 
in  so  doing  he  acted  unreasonably,  and  in  fact  foolishly.     The  testi- 
mony also  shows  that  he  himself  had  previously  advised  the  appel- 
lant not  to  build  a  road  at  that  time  of  the  year.    Giving  due  weight  to 
all  the  material  evidence  in  the  record,  it  seems  clear  to  us  that  there 
was  not  sufficient  evidence  to  justify  a  verdict  in  favor  of  the  respond- 
ent, and  the  learned  trial  court  therefore  erred  in  not  taking  the  case 
from  the  jury  at  appellant's  request. 
/~    It  was  also  error,  we  think,  to  permit  certain  witnesses  to  testify  as 
/  to  what  this  supposed  agent  told  them  that  appellant  said,  or  had  con- 
I    eluded  to  do,  with  respect  to  this  logging  road.    This  was  clearly  hear- 
l     say  testimony,  and  hence  not  admissible.     Nor  were  the  acts  and  dec- 
\  larations  of  Mathews  competent  evidence  in  proof  of  agency.     Co- 
^  megys  v.  Lumber  Co.,  8  Wash.  661,  36  Pac.  1087. 

7  See,  also,  Hazeltine  v.  Miller,  44  Me.  177  (1857),  holding  that,  while  the 
authority  of  an  agent  to  act  for  and  bind  his  principal  may  be  implied  from 
the  fact  that  such  agent  has  been  accustomed  to  perform  acts  of  the  same 
general  character  for  his  principal  with  his  consent,  yet  the  acts  from  which 
such  authority  is  to  be  implied  must  be  of  the  same  general  character  and 
effect.  From  authority  to  collect  for  his  principal  money  fi'om  the  use  and 
sale  of  property  could  not  be  implied  authority  to  embark  on  business  enter- 
pi'ises  for  his  principal. 


Oolumbifl.  Mill  Co,  Npt'l>B«iik  of  Corameree. 
?acts:  ' 

Ptf.  Co.  had  de«lt  for  years  with  def.  benl 
A  custom  between  them  called  for  the  endorsement 
of  checks  with  a  rubber  stamp.  One  Heilpern, 
bookkkeper  of  ptf.,  without  their  authority, 
presented  a  number  of  checks  at  def.  bank,  duly 
endorsed,  -^nd  received  the  c«sh  for  them.  Ptf.' 
brings  this  action  in  conrersion  for  the  checks. 
Def.  attempts  to  show  an  implied  or  at  least  an 
appprent  authority  in  Heilioern  to  transfer  the 
checks,  without  the  sign^'ture  of  the  ptf's. 
treasurer,  ^-nd  receive  the  money  for  them, 
'ourt : 

The  rule  governing  this  c«se  is  as  follows: 
'^ere  one  re'^pon^bly  ?=!nd  in  ^ood  f^'ith  h^s  been 
led  to  'heliftve  from  the  p-n-ne^r^ace  of  authority 
^hlch  ^   •nrincl^'^1  nermits  his  *^rent  to  h'^ve,  ^^nd 
hee«^nse  of  Fuch  heliefhas  in  good  f«^ith  de«lt 
^ith  the  rpent,  the  -nrinci-n^l  will  not  be  aliov;ed 
to  deny  the  rpep.Gv,    to  the  prejudice  of  the  one 
^0   dealing.  One  ra^'v  be  estonped  b;;  his  666666ff6 
«ii"lTi*>ble  nep-ligence  ^s  well  ^s  intention'^l  «cts. 

ITEW  TRIAL  GRANTED. 


C««d"   ,1:65   d^iw  sibs^  lol   -iX^eb   feerf  .oO   . 

T5^I.v&    ,iflBd"   .Is 5   ^/'  s:ioeiio   xO  isdniixfl  a 
*l^'f  .mexi;^  "xol  xf8«©  erf;^   5evi6oei  f>n« 

n.?^  :iBP@£   iB  XO  b&ilqmt  xxe  woxfa  od"   8*a 

»£!^1:^o-   erf  J   ^o   etni^irglB  effo    i^irorftf 

rswolj^'vi   ci>    ax  ea®e  Bir{i  ■gnintero-^  elm 

-^d'iiorfdjjf*  ^0   son ''T'^®rr<^=^   erftt  iroi"^   sv«l 
6iXB    ,eT«rf  o:t    :tn©:v»   axx-f  3:txflii©rr  I^r^lonl 

6ai7oIIf^  ecf  ;ton  IIlw  I^crlanxirr  ©ff:f    ^itne-^ 

a^daasdd  slrf  vcf  Sen-rroi^s©  ©cf  vffl  enO   , 

.aSTHAHO  IAI5IT  WSTl 


Ch.  4)  CREATION  OF  THE  RELATION  57 

Certain  portions  of  the  charge  of  the  court  to  the  jury  are  objected 
to  by  appellant,  but  we  perceive  no  substantial  error  therein,  except 
in  the  application  of  the  general  principles  of  law  announced  to  the 
facts  of  the  case;  but  it  is  unnecessary  to  enter  upon  a  discussion  of 
the  several  objections  raised,  as  the  judgment  must  be  reversed  for 
reasons  already  indicated.  Reversed  and  remanded  for  further  pro- 
ceedings. 

Dunbar,  J.,  dissents. 


V 


SECTION  3.— BY  ESTOPPEIv 

COLUMBIA  MILL  CO.  v.  NATIONAL  BANK  OF  COM^^"^^^-«^L-i/^ 

MERGE.  / 

(Supreme  Court  of  Minnesota,  1893.     52  Minn.  224,  53  N.  W.  1061.) 

GiLFiLLAN,  C.  J.*  The  plaintiff  was  a  corporation  in  the  business, 
at  :Minneapolis,  of  manufacturing  and  selling  flour,  and  the  defendant 
was  a  bank  at  that  place.  The  action  is  for  the  conversion  of  19 
checks  drawn  by  different  persons  or  firms  upon  different  banks  or 
concerns,  each  payable  to  the  order  of,  and  the  property  of,  the  plain- 
tiff. The  allegations  of  the  complaint  are  that  one  Leo  Heilpern  felo- 
niously abstracted  and  purloined  the  checks  from  plaintiff,  wrongfully 
and  without  authority  impressed  on  the  back  of  each,  with  a  rubber 
stamp,  the  words  "Columbia  Mill  Co.,"  and  wrote  underneath  his 
name,  L.  Heilpern,  and  wrongfully  sold  and  disposed  of  them  to  de- 
fendant, which  collected  and  appropriated  to  its  own  use  the  money 
called  for  by  them.  Heilpern  was  plaintift"s  bookkeeper  and  cashier ; 
that  is,  he  had  charge  of  its  books  and  its  "petty  cash,"  i.  e.  the  pay- 
ments received  upon  its  sales  at  retail. 

The  sole  controversy  was  on  Heilpern's  authority  to  dispose  of  and 
receive  the  money  for  the  checks.  It  was  conceded  that  he  had  no 
express  authority  to  do  so,  and  the  question  was  narrowed  to  that  of 
implied  authority,  and  the  further  question,  if  it  be  not  included  in 
that,  as  to  whether  the  plaintiff  had  either  intentionally  or  negligently 
so  conducted  its  business  with  defendant,  or  permitted  it  to  be  so  con- 
ducterl,  that  it  harl  a  right  in  good  faith  to  believe,  and  did  believe, 
that  Heilpern  had  the  authority  he  assumed  to  exercise,  and,  acting  on 
and  because  of  such  belief,  received  the  transfer  of  the  checks,  and 
paid  him  the  money.  It  appeared  that,  when  the  relation  of  banker 
and  patron  between  defendant  and  plaintiff  began,  the  latter  left  in  the 
signature  book  of  the  former  the  signature  of  S.  Zeidler,  its  treasurer, 
as  of  the  only  person  authorized  to  sign  for  it  in  its  transactions  with 
the  bank,  and  except  during  a  short  period,  when  he  was  absent,  his 

8  I'.'irt  of  the  opinion  is  omitted. 


58  THE  RELATION  (Part  1 

was  the  only  signature  in  the  bank  for  that  purpose.  It  also  appeared 
that  there  grew  up  and  continued  for  years  a  usage  that  when  plain- 
tiff sent  to  the  bank,  for  deposit  to  its  credit,  checks  payable  to  its  or- 
der, it  made  no  other  indorsement  on  them  than  by  impressing  it  with 
a  rubber  stamp.  Whether  there  was  a  similar  usage  in  any  other  bank 
is  immaterial.  It  existed  between  these  parties.  It  also  appeared  that 
Heilpern  and  his  predecessors  in  employment  as  bookkeeper  and  cash- 
ier, extending  over  a  period  of  two  or  three  years,  were  accustomed 
to  take  or  send  to  the  bank,  and  transfer  to  it,  and  receive  the  money 
for,  checks,  mostly  small  ones,  payable  to  its  order,  with  no  indorse- 
ment except  with  the  stamp,  or  with  none  at  all. 

It  was  upon  this  custom  mainly  that  defendant  relied  to  show  im- 
plied or  at  least  apparent  authority  in  Heilpern  to  transfer  the  checks 
without  the  signature  of  Zeidler,  and  receive  the  money  for  them. 
And  because  one  dealing  with  an  agent  may  show  actual  authority  in 
him, — that  is,  such  authority  as  the  principal  in  fact  intended  to  vest 
in  the  agent,  although  such  intention  is  to  be  shown  by  acts  and  con- 
duct, rather  than  by  express  words, — without  showing  that  he  (the 
person  dealing  with  the  agent)  knew  when  he  dealt  with  him  of  the 
acts  and  conduct  from  which  the  intention  is  to  be  implied,  it  was  com- 
petent for  defendant  to  show  the  course  and  manner  of  conducting 
business  in  the  office  of  plaintiff,  so  far  as  the  bookkeepers  and  cashier 
had  charge  of  it.  The  officers  of  plaintiff  testified  that  Heilpern  had 
no  authority  to  transfer  the  checks  and  receive  the  money,  and  that 
they  never  knew  of  the  bookkeeper  and  cashier  doing  so  with  plaintiff's 
checks.  But  the  jury  were  not  bound  to  their  testimony.  Such  a  man- 
ner of  conducting  the  business  in  the  office  might  have  been  proved  as 
would  have  justified  the  jury  in  finding  that  the  officers  must  have 
known  of  the  custom  of  the  bookkeeper  and  cashier  in  regard  to 
checks ;  and  had  that  been  found,  and  that  it  was  acquiesced  in  by 
plaintiff,  the  intention  to  vest  authority  might  have  been  implied. 

For  the  sake  of  convenience,  we  make  a  distinction  between  implied 
authority — that  is,  such  as  the  principal  in  fact  intends  the  agent  to 
have,  though  the  intention  is  implied  from  the  acts  and  conduct  of  the 
principal — and  apparent  authority, — that  is,  such  as,  though  not  actu- 
ally intended  by  the  principal,  he  permits  the  agent  to  appear  to  have. 
The  rule  ^s  to  apparent  authority  rests  essentially  on  the  doctrine  of 
estoppel.  (The  rule  is  that,  where  one  has  reasonably  and  in  good 
.H  1^)- faith  beenUed  to  believe  from  the  appearance  of  au^iority  which  a 

principal  pevmits  his  agent  to  have,  and  because  of  sucK  belief  has  in 
good  faith  dealt  with  the  agent,  the  principal  will  not  be  allowed  to 
deny  the  agency,  to  the  prejudice  of  the  one  so  dealing.  / 

One  may  be  estopped  by  his  acts  of  culpable  negliger/ce,  as  well  as 
by  his  intentional  acts ;  and  if  through  culpable  negligei/cethe  plaintiff 
permitted  Heilpern  to  appear  to  the  bank  to  have  authority  to  trans- 
fer the  checks  and  receive  the  money,  and  the  latter  reasonably  and  in 
good  faith  was  induced  by  such  appearance  to  believe  he  had  that  au- 


Worr^l  V*  Munn* 

Ppcts: 

Action  for  s^^ecifie  -DerformFnce  of  a  cont- 
r^^ct  under  sepl  to  sell  l«nd.  Defs,  objected  th^t 
it  WPS  executed  for  T»tf.  by  an  agent  who  wps  not 
authorized  by  a  written  power  of  atty,  under  se«l 
to  execute  said  instrument. 

Court : 

The  common  Ipw  would  require  a  se^^l  in 
this  e«se,  but  modern  courts  h*^ve  relaxed  this 
rule.  A  se°l  is  not  necessary  to  the  validity  of 
the  contract  here.  All  th=>t  he  statute  of  frauds 
requires  is  th^^t  the  contract  be  written  and 
signed  by  vendor.  Authority  of  agt.  m«y  be  con- 
ferred by  Toarol;  neither  a  written  authority  or 
an  authority  under  se«l  is  required.  The  contract 
here  is  binding  on  the  principal. 


ton  B«?w  ofCw  ^trieS'B  xtb  y,<^  *l^cr  io!t   beJuoexe  a 
al  I'^es    B  etln^i^t   dIjjgw  w«I  nommoo   erfT 

-soo   ed  ^«ffl  .^3.8  lo  vj-iiOiioijA   .io5nev  "^cf  f 

toBi^noD   erfT   » &e!ci:rj''^9'x  el  I^ee  le&xir;  ■^j'i^orfd 

.iBcrlorii^q  eifi   no  -gnlbalcS  ai 


Ch.  4)  CREATION  OF  THE  RELATION  59 

thority,  and  on  thai  belief  received  and  paid  for  the  checks,  plaintiff 
cannot  deny  the  authi-/iity,  for  to  permit  it  to  do  so  would  sanction  a 
frauc'     *     ''     * 

Order  denying  to  defendant  a  new  trial  reversed,  for  error  in  the 
charge  to  the  jury. 


SECTION  4.— EXPRESS  AUTHORITY 

I.  In  General — Written  Power  n    /U^\ 

WORRALL^^MUNN.  -    ^ 


<r^ 


jUi^^ 


iyij(u 


(Court  of  Appeals  of  New  York,  1851.     5  X.  Y.  229,  55  Am.  Dec.  3.30.)        ^I^^^lJL  ^-yiyt^e^ 

Action  for  specific  performance  of  a  contract  under  seal  to  sell  land.     '      //  c   ^y 
The  defendants  objected  to  the  contract  for  various  reVsons,  one  of    '^       '      •  ^^^"^^ 
which  was  that  it  was  executed  for  plaintiff,  Noah  Worrall,  by  Henry ^;^^^  '^^^y^i^^^^^^.^^ 
Worrall,  who  was  not  authorized  by  a  written  power  of  ^torney  un-   .  ^ 

ler  seal  to  execute  said  instrument.     From  a  decree  of  tha^  Supreme^^i!::^^--'*'!^  kUa^~'{_^ 

jViXX.  dismissing  complainant's  bill  an  appeal  is  taken.  V  /C^^-^/,-^ 

«  See,  also.  Hackett  v.  Van  Frank,  105  Mo.  App.  384,  79  S.  W.  1013  O'SQl), 
holdiuj?  that  to  establish  agency  by  estoppel  the  party  asserting  the  ageii^>f^     Aj^jujp   L-^ 
must  have  been  deceived,  and  that  he  must  have  relied  on  the  acts  of  the       /C*-^^**-^ 
principal  creating  the  estoppel.    It  is  not  so  in  the  case  of  an  actual  agency,  x^^-t./t^tiiix-^*-**-^ <L- 
implied  or  express.     See,  also,  Clark  v.  Dillman,  108  Mich.  625,  66  N.  W.  570^.        /^  A 

(18061.  in  which  the  court  says:    "It  Is  undoubtedly  the  law  that  a   person 
may   lie  bound  by  the  representation  and  acts  of  another,  as   agent,   where 
there  has  been  such  a  holding  out  as  to  reasonably  lead  one  dealing  with  him       /, 
to  believe  in  the  existence  of  such  agency.     But  all  of  the  elements  of  an    «^  U       y^- 
estoppel  must  be  present.     There  must  be  conduct  calculated  to  mislead,  and  ,, 

it  must   be   under    circumstances   which  justify  the   claim   that  the   alleged  ^^^^CL^J^L^   A 
jirincipal  should  have  expected  that  the  I'epresentatious  would  be  relied  and 
acted  upon;    and,  further,  it  nuist  appear  that  they  were  relied  and  acted/j-T.    (jLU-^ 
upon,  in  good  faith,  to  the  injury  of  an  innocent  party.     Mechem,  Ag.  S§  85,  . 

86;     Railroad   Co,   v.    Chappell,   56  Mich.   190,  22  N.  W.  278.     The  i"»lc  that^^j^^  V 
estops  a  party  from  denying  the  existence  of  an  agency  is  a  shield,  and  not  ''^   ' 

a  .sword;    and  unless  the  jury  could  find  from  the  evidence  that  the  defend- 
ant acted  in  good  faith,  and  in  the  honest  belief  that  Pressburg  had  authority 
to  sell  this  i)iano  for  %A~^i),  and  that  he  purchased  it  to  his  injury,  a  verdict 
for  the  defendant  sliould  not  have  been  rendered.     There  is  no  allusion  in    '^  ■ 
the  charge  to  the  other  elements  essential  to  an  estopr)el,  and,  in  the  testi- /^^xC^c'    l^A^-^-^ 
mony  returned,  we  discover  no  avowal  of  l)elief  in,  or  bona  fide  reliance  upon,  .  / 

the  authority  of  I'ressburg,  unless  the  circumstances  were  sufticlent  evidence  /  0/hA  t^mi 
to  go  to  the  jury  upon  this  subject.  In  any  event,  there  was  ample  oppor-  '  ^ 
unity  for  the  jury  to  find  the  contrary.  Maxwell  v.  Bridge  Co.,  41  Mich. 
454,  2  X.  W.  (i.''.9;  Ferguson  v.  Millikin.  42  Mich.  443,  4  X.  W.  185;  Morrill 
V.  Macknian,  24  Mich.  279.  note;  De  Mill  v.  Moffat,  49  Mich.  125.  131,  13 
X.  W.  .387;  Fletcher  v.  Circuit  Judge  of  Kalkaska,  81  INIich.  193,  45  N.  \V. 
G41 ;    Bank  v.  Todd,  47  Conn.  219." 

In  Dispatch  Printing  Co.  v.  Xat.  Bank  of  Conunerce,  109  Miiui.  440.  124 
X.  W.  2.36  (1910^  the  court  attempts  a  distinction  between  apparent  authority, 
resting  on  the  conscious  permission  l)y  the  principal  of  acts  beyond  the  pow- 
ers granted,  and  authority  by  estoppel,  which  has  its  basi.s  in  the  neglect  of 
the  principal. 


GO  TUB  RELATION  (Part  1 

Paige,  J.^°  [After  stating  the  facts  and  disposing  of  some  other  ob- 
jections:] *  *  *  The  only  remaining  questions  to  be  considered 
are,  whether  the  authority  of  Henry  Worrall  to  execute  the  counter- 
part should  have  been  under  seal ;  whether  he  executed  the  agreement 
in  the  name  of  his  principal;  and  if  the  counterpart  was  not  binding 
(on  Noah  Worrall,  whether  the  original  was  binding  on  Prall. 

It  is  a  maxim  of  the  common  law  that  an  authority  to  execute  a 
Ideed  or  instruif^nt  under  seal  must  be  conferred  by  an  instrument  of 
equal  dignity  anS  solemnity ;  that  is,  by  one  under  seal.  This  rule  is 
purely  technical.  )  A  disposition  has  been  manifested  by  most  of  the 
American  courts  Ito  relax  its  strictness,  especially  in  its  application  to 
partnership  and  Commercial  transactions.  I /think  the  doctrine  as  it 
now  prevails  m^y  be  stated  as  follows,  viz.  Mf  a  conveyance  or  any 
act  is  required  to  be  by  deed,  the  authority  o\the  attorney  or  agent  to 
execute  it  must  be  conferred  by  deed;  but  if  the  instrument  or  act 
would  be  effectual  without  a  seal,  the  addition  of  a  seal  will  not  render 
an  authority  under  seal  necessary,  and  if  executed  under  a  parol  au- 
thority or  subsequently  ratified  or  adopted  bv  parol,  the  instrument  or 
act  will  be  valid  and  binding  on  the  principal  It  is  said  that  the  rule 
as  thus  relaxed  is  confined  in  its  applicationlto  transactions  between 
partners.  But  it  seems  to  me  that  a  distinction  between  partners  and 
other  persons  in  the  application  of  the  rule  as  relaxed  and  qualified  by 
recent  decisions,  stands  upon  no  solid  foundation  of  reason  or  prin- 
ciple. 

The  whole  authority  of  a  partner  to  act  for  his  copartners  and  to 
bind  them  and  their  interest  in  the  copartnership  property  is  founded 
upon  the  common-law  doctrine  of  agency.  So  far  as  he  acts  for  his 
partners,  he  is  an  agent.  Story  on  Part.  §  1.  Thus,  it  is  a  general  rule 
of  the  common  law  that  one  partner  cannot,  from  the  mere  relation  of 
■  partnership,  bind  his  copartners  by  deed  or  instrument  under  seal, 
even  in  commercial  dealings  unless  specially  authorized  to  do  so  by  an 
instrument  under  seal.  Story  on  Part.  §  117;  3  Kent's  Com.  (6th 
Ed.)  47. 

This  rule  springs  from  the  common-law  maxim  before  mentioned, 
applicable  to  the  general  relation  of  principal  and  agent.  There  are 
numerous  cases  in  the  American  courts  in  which  the  rule  has  been  re- 
laxed as  regards  partnership  transactions,  in  order  to  adapt  it  to  the 
necessities  of  trade.  Story  on  Part.  §  117;  3  Kent's  Com.  48.  Thus 
the  doctrine  as  applicable  to  partners  is  now  firmly  established,  that 
wherever  an  act  done  by  a  partner  within  the  scope  of  the  partnership 
business  would  be  valid  if  done  by  an  unsealed  instrument,  then,  al- 
though done  by  an  instrument  under  seal,  it  will  be  valid  and  bind  his 
copartners  if  it  is  authorized  by  a  prior  parol  authority  or  adopted  by 
a  subsequent  parol  ratification.  Story  on  Part.  §§  121,  122;  Anderson 
V.  Tompkins,   1  Brock.  462,  Fed.  Cas.  No.  365,  Marshall,  C.  J.;    3 

10  Part  of  the  opinion  is  omitted. 


Ch.  4)  CREATION  OF  THE  RELATION  61 

Kent's  Com.  (6th  Ed.)  48;  Smith  v.  Kerr,  3  Comst.  (3  N.  Y.)  150; 
Gram  v.  Seton,  1  Hall,  293,  Jones,  C.  J. ;  Skinner  v.  Dayton,  19  Johns. 
513,  553,  10  Am.  Dec.  286;  Everit  v.  Strong,  5  Hill,  163;  Tapley  v. 
Butterfield,  1  Aletc.  (Mass.)  515,  35  Am.  Dec.  374;  Cady  v.  Shepherd, 
11  Pick.  400,  403,  22  Am,  Dec.  379.  And  the  rule  that  one  partner 
cannot  bind  his  copartners  by  deed  without  an  authority  under  seal  has 
been  held  in  several  cases  not  to  apply  to  a  case  where  one  partner 
conveys  by  deed  property  of  the  firm  which  he  might  have  conveyed 
by  an  unsealed  instrument  or  by  parol.  The  mere  addition  of  the  seal 
does  not  vitiate  the  conveyance.  Tapley  v.  Butterfield,  1  J\Ietc. 
(Mass.)  515,  35  Am.  Dec.  374;  Anderson  v.  Tompkins,  1  Brock.  462, 
Fed.  Cas.  No.  365 ;  Everit  v.  Strong,  5  Hill,  165 ;  Milton  v.  Mosher, 
7  jNletc.  (Mass.)  244.  In  Gram  v.  Seton,  supra,  Chief  Justice  Jones, 
of  the  Supreme  Court  of  the  city  of  New  York,  held  that  the  author- 
ity of  one  partner  to  bind  his  copartners  by  deed  may  even  be  implied 
from  the  acts  and  acquiescence  of  the  copartners.  No  good  reason 
can  be  assigned  for  a  distinction  between  partners  and  other  persons 
in  relation  to  the  technical  rule  of  the  common  law,  that  in  all  cases 
an  authority  to  execute  a  deed  must  be  by  deed.  The  rights  and  liabil- 
ities of  partners  in  their  acts  for  each  other  are  governed  by  the  same 
rules  as  are  the  relations  of  principal  and  agent;  each  partner  being 
considered  an  agent  for  his  copartners ;  and  the  same  questions  of  ex- 
press and  implied,  general  and  special  authority,  must  arise  between 
partners  as  between  principal  and  agent.  Upon  principle,  therefore, 
whenever  an  instrument,  either  as  between  partners  or  principal  and 
agent,  would  be  effectual  for  the  purpose  intended  without  a  seal,  the 
addition  of  a  seal  should  not  create  the  necessity  of  an  authority  under 
seal  to  authorize  an  agent  to  execute  it.^^ 

In  Lawrence  v.  Taylor,  5  Hill,  113,  Cowen,  J.,  speaking  of  a  spe- 
cialty executed  by  an  attorney  without  authority  under  seal,  says: 
*Yet  in  such  case  it  does  not  follow  that  it  shall  not  operate  at  all.  If 
the  contract  may  be  made  without  deed,  the  seal  shall  not  prevent  its 
inuring  as  a  simple  contract,  though  the  authority  be  by  parol  or  mere- 
ly implied  from  the  relations  between  the  principal  and  agent."  In 
Skinner  v.  Dayton,  19  Johns.  554,  558,  10  Am.  Dec.  286,  in  the  Court 
of  Errors,  Spencer,  C.  J.,  held  that  the  contract  executed  in  that  case 
by  Skinner,  under  seal  for  the  directors  of  the  company,  ought  not  to 
be  considered  a  personal  covenant  of  Skinner  in  equity,  and  that  the 
company  were  liable  for  a  breach  of  the  covenant,  although  the  au- 
thority of  Skinner  was  not  conferred  by  deed ;  and  such  was  the  deci- 
sion of  the  Court  of  Errors.  Skinner  was  a  director,  and  the  presi- 
dent of  an  association  for  manufacturing  cotton,  and  entered  into  a 
contract  for  the  making  of  some  machinery  for  the  company.  The 
contract  was  ratified  by  the  subsequent  parol  assent  and  acts  of  the 

•  iThe  agent  of  a  corporation  may  lie  appointed  for  any  purpose  without 
the  use  of  a  seal.  See  Fitcli  v.  Steam  Mill  Co.,  80  Me.  34,  12  Atl.  732  (ISSS). 
and  the  cases  there  cited. 


02  THE  RELATION  (Part  1 

stockholders.  The  court  decided  that  such  subsequent  ratification  was 
an  adoption  of  the  act  of  the  agent  and  equivalent  to  a  previous  posi- 
tive and  direct  authorization  to  do  the  act. 

In  Randall  v.  Van  Vechten,  19  Johns.  60,  10  Am.  Dec.  193,  a  con- 
tract under  seal  had  been  entered  into  by  the  defendants  as  a  commit- 
tee of  the  corporation  of  the  city  of  Albany,  with  the  plaintiffs,  with- 
out authority  under  seal  from  the  corporation.  But  the  corporation 
had  subsequently  recognized  by  parol  the  authority  of  the  committee 
to  make  the  contract,  and  it  was  held  that  the  contract  was  binding  on 
the  corporation,  and  that  an  action  of  assumpsit  would  lie  against  the 
corporation  for  its  breach. 

In  Bank  of  Columbia  v.  Patterson,  7  Cranch,  299,  307,  3  L.  Ed. 
351,  a  committee  of  the  corporation,  without  any  authority  conferred 
by  deed,  had  made  a  contract  in  their  own  names  as  such  committee 
under  their  private  seals,  and  the  Supreme  Court  of  the  United  States 
held  that  as  the  whole  benefit  of  the  contract  resulted  to  the  corpora- 
tion, and  as  the  corporation  had  by  its  acts  subsequently  adopted  the 
contract,  an  action  of  assumpsit  would  lie  on  the  contract  against  the 
corporation. 

In  White  v.  Cuyler,  6  T.  R.  176,  where  a  wife  unauthorized  by  her 
husband  made  an  agreement  under  seal  with  a  servant,  providing  for 
the  services  of  the  latter,  and  the  servant  performed  the  services,  it 
was  held  that  although  the  covenant  of  the  wife  could  not  bind  the 
husband,  the  servant  could,  nevertheless,  maintain  assumpsit  against 
the  husband.  In  Damon  v.  Granby,  2  Pick.  352,  it  was  decided  that 
although  an  agent  who  contracts  for  the  use  of  a  corporation  under 
his  own  seal  does  not  bind  the  corporation  by  the  deed,  yet  if  he  had 
authority  to  make  the  contract  it  shall  be  binding  on  the  corporation  as 
evidence  of  such  contract. 

In  Evans  v.  Wells,  22  Wend.  340,  341,  Senator  Verplank  said  that 
these  rules  as  to  sealed  instruments  were  not  applicable  to  cases  where 
a  deed  is  not  necessary,  and  that  in  such  cases  an  act  of  the  agent  un- 
der seal  may  be  ratified  by  acts  in  pais. 

In  Hanford  v.  McNair,  9  Wend.  54,  an  agent  had  executed  a  con- 
tract under  seal  for  the  purchase  of  timber,  not  being  authorized  by 
deed.  Sutherland,  J.,  said  that  subsequent  acts  of  the  principal  recog- 
nizing and  carrying  the  agreement  into  effect  might  be  sufficient  to 
make  the  contract  binding  on  the  principal  as  a  parol  contract. 

In  Blood  v.  Goodrich,  12  Wend.  527,  27  Am.  Dec.  152,  and  in  Han- 
ford v.  McNair,  9  Wend.  54,  the  Supreme  Court,  in  laying  down  the 
common-law  rule  that  an  authority  to  execute  a  deed  must  be  con- 
ferred by  deed,  did  not  advert  to  the  distinction  between  cases  where 
the  conveyance  or  contract  must  be  made  under  seal  and  cases  where 
they  would  be  eff'ectual  without  a  deed.  These  authorities  show  that 
there  is  no  distinction  between  partners  and  other  persons  in  the  ap- 
plication of  the  modern  rule,  that  wherever  an  instrument.,  would  be 


Lawrence  v.  Taylor. 

Assumpsit,  Declaration  counted  on  « 
contract  to  convey  l^nd,  executed  "by  one  Pr^tt 
for  Pr«tt  and  Tpylor,  a  co-partnershit),  Pr^'tt 
wf-s  now  dead,  and  this  suit  is  brought  against 
T*>ylor  to  recover  hack  money  paid  to  Pr«tt  on  the 
contr'^ct.  Def.  claimed  that  Pratt  was  not  proper- 
ly authorized  to  act  for  him  so  as  to  make  him 
liphle. 
'Ourt : 

There  was  no  written  authority  here, 
and  it  is  not  required.  All  th«t  is  necessary 
here  is  to  show  a  ratification  of  the  s»le  by 
def,,  and  the  evidence  shows  that.  The  statute 
of  frf^uds  is  no  defense,  for  it  is  provided  that 
in  contr'^cts  to  convey  Irnd ,  «s  this  was,  appoint- 
ment hy  TDProl  is  sufficient. 

VEEDICT  POP  PTP. 


^  no  be^nsjoo  KoittBi«IoeCI  ,  dlaq-flixfBaA 
'  ^    tfi^uaid   ai   Hub  aidi  bus  ^h^eb 
inix^  'e:^I«in   o^   aa  os  mlxf  Tol   tob  oi^   &esii 


e^iriJ'p'J'a  ,  ;  ?^rfi   sworfs   ^onebire  ©rf;t    B 

j^fT^    59&iYoxa;   ax   *i   t!;o^    ,  ^^  '       '^  :'f^   on  sX 
jfnionrr'-    ,s®-?r  sfrf;!'   s?*'    ,  5ij'*I     ,  o   c^    site 

.'5TT:  JTO'5   T0ICI5ISV 


Ch.  4)  CREATION    OP    THE    RELATION  63 

effectual  without  a  seal,  it  will  be  valid  and  binding  on  the  principal, 
although  executed  under  seal  by  an  agent  without  authority  by  deed,  if 
authorized  by  a  previous  parol  authority,  or  subsequently  ratified  or 
adopted  by  parol. 

In  this  case  a  seal  was  not  necessary  to  the  validity  of  the  contract 
for  the  sale  of  the  lands  at  Haverstraw.  All  that  the  statute  of  frauds 
requires  is  that  a  contract  for  the  sale  of  lands  shall  be  in  writing,  and 
that  such  writing  express  the  consideration  and  be  subscribed  by  the 
party  by  whom  the  sale  is  to  be  made,  or  by  his  agent  lawfully  author- 
ized. The  authority  of  the  agent  may  be  conferred  by  parol;  neither 
a  written  authority  or  an  authority  under  seal  is  required.  2  R.  S. 
135,  §§  8,  9;  McWhorter  &  Baldwin  v.  McMahan,  10  Paige,  386; 
Lawrence  v.  Taylor,  5  Hill,  107.  It  results  from  the  foregoing  au- 
thorities that  the  counterpart  of  the  agreement  executed  by  Henry 
Worrall  under  seal  was  binding  on  his  principal,  although  his  author- 
ity to  execute  it  was  not  conferred  by  deed.     *     *     * 

Decree  of  the  Supreme  Court  reversed. 


11.  Tower  of  Attorney  under  Seal, 

(A)  In  General 

LAWRENCE  v.  TAYLOR. 

(Supreme  Court  of  New  York,  1843.     5  Hill,  107.) 

Assumpsit.  The  declaration  contained  the  common  counts,  and 
also  counted  upon  a  contract  to  convey  land  in  the  village  of  Toledo, 
Ohio.  The  contract  was  executed  by  one  Pratt  for  Pratt  &  Taylor, 
a  co-partnership.  Pratt  was  now  dead,  and  the  action  was  against 
Taylor  to  recover  back  money  paid  to  Pratt  on  the  contract.  Defend- 
ant claimed  that  Pratt  was  not  properly  authorized  to  act  for  him  so 
as  to  make  him  liable.    Verdict  for  plaintiff  sustained. 

Cowen,  J.^^  There  was  no  written  authority  to  Pratt  by  which 
Taylor  was  bound.  Had  the  subject  of  the  contract  been  personal 
property  belonging  to  the  firm,  no  special  authority  would  have  been 
necessary ;  but  at  law  it  is  otherwise  as  to  land,  whatever  may  be  the 
rule  in  equity.  Out  of  the  court  of  chancery,  real  estate,  though  be- 
longing to  partners  and  employed  in  the  partnership  business — the 
title  standing  in  their  joint  names — is  deemed  to  be  holden  by  them 
as  tenants  in  common  or  joint  tenants  for  all  purposes.  One  cannot, 
in  virtue  of  the  partnership  power,  sell  for  the  other.  Coles  v.  Coles, 
15  Johns.  159,  161,  8  Am.  Dec.  231 ;  Anderson  v.  Tompkins,  1  Brock. 
456,  463,  Fed.  Cas.  No.  365;   2  Bell's  Com.  614;   Story  on  Parlncr- 

12  Part  of  the  opinion  is  omitted. 


64  THE  RELATION  (Part  1 

ship,  146  to  149.  In  order  to  bind  Taylor,  therefore,  a  special  au- 
thority was  necessary  for  the  particular  transaction. 

If  a  parol  authority  was  sufficient,  I  am  not  prepared  to  say  that 
here  is  not  evidence  of  such  an  authority  actually  subsisting  when  the 
contract  was  executed.  If,  after  a  man  has  agreed  to  sell  my  prop- 
erty and  has  signed  my  name,  I  claim  an  interest  in  the  sale,  it  is  by 
no  means  to  be  taken  for  granted  that  upon  such  a  claim  a  jury  would 
not  be  warranted  in  saying  I  told  the  man  to  affix  my  signature.  It 
seems  the  proof  of  some  authority  was  considered  so  plain  at  the  trial 
that  the  counsel  for  the  defendant  declined  going  to  the  jury  upon  it. 
In  the  Court  of  Chancery,  perhaps,  the  mere  partnership  in  these 
lands  would  have  been  sufficient  to  render  the  contract  binding  on 
Taylor.  See  Story  on  Partn.  129  to  132,  and  the  note.  They  were 
treated  as  partnership  property  by  the  contract ;  and  in  admitting  the 
validity  of  that  and  claiming  under  it,  Taylor  in  the  same  breath  ad- 
mitted that  the  lands  belonged  to  the  firm.  In  equity  they  would,  if 
in  truth  belonging  to  the  firm,  have  been  treated  as  personal  estate 
(Id.) ;  and  that  court  without  any  thing  more  might  have  decreed  a 
specific  execution  by  both  partners.  Such  being  the  equity  of  the  case, 
it  seems  to  me  it  would  not  have  been  a  rash  presumption,  from  what 
Taylor  said  to  Macy  and  Smith,  that  Pratt  was  expressly  instructed 
by  Taylor  to  affix  the  copartnership  name. 

It  was  sufficient,  however,  if  the  proof  showed  a  ratification  of  the 
sale  by  Taylor ;  and  I  think  it  showed  so  much,  at  least,  very  clearly. 
Here  was  a  written  contract  to  convey  in  the  name  of  the  firm,  made 
as  of  property  belonging  to  it.  The  plaintiff  promised  to  pay  the 
money  to  "Pratt  &  Taylor,"  on  a  contract  to  which  the  name  of  the 
firm  was  subscribed  by  Pratt.  First  $10,000  and  afterwards  $2,000 
were  received  by  Pratt  on  the  contract.  Of  Taylor's  common  interest 
in  the  land  there  is  no  dispute,  and  he  repeatedly  claimed  in  the  hear- 
ing of  third  persons,  that  he  had  an  interest  in  the  contract;  a  con- 
tract under  which  money  had  been  and  was  yet  to  be  paid  to  Pratt 
in  the  names  of  the  two  as  joint  payees.  This  was  evidence  of  a  posi- 
tive acquiescence  and  adoption  of  the  contract  by  Taylor;  and  if  there 
be  no  objection  to  such  an  authority  being  by  parol,  both  must  be  con- 
sidered as  joint  receivers. 

It  was  said  for  Taylor  that  the  authority,  not  being  written,  was 
void  by  the  statute  of  frauds.  But  neither  the  New  York  nor  Ohio 
statute  requires  that  the  authority  should  be  in  writing.  Both  are 
in  this  respect  like  the  English  statute,  which,  though  it  require  that 
an  agent  to  convey  real  estate  should  be  appointed  by  writing,  omits 
that  requisite  when  the  contract  is  executory,  i.  e.  to  convey  at  a  future 
day.  2  R.  S.  69  (2d  Ed.)  §§  6,  8,  9;  Sugd.  on  Vend.  120,  121  (Brookf. 
Ed.  of  1836),  and  the  cases  there  cited;  3  Wooddes.  428;  Story  on 
Ag.  51,  and  note  (2);  Lloyd's  Pal.  on  Ag.  158  to  160;  2  Kent's  Com. 
613  (4th  Ed.).    The  statute  of  frauds  draws  the  distinction  on  its  face 


Sher)T»prc[*s  Touchstone. 
!ts: 

Ever:'  cleoci    to   be   good   must  be  all  writt- 
i  "before   the   Pe«?ling  and    delivery  of  it. 


'^d'ixw  lie  ed"  iax/gi   &003   ©d"  o^   5©95  v.xarS 

.^i  lo  T?:i©TiX©5   Bhb  -giiilp^ss   arft   ©xCted' 


Ch.  4)  CREATION  OF  THE  RELATION      /  65 

between  conveying,  and  contracting  to  convey  lands.  I  In  the  former 
case  the  agent  must  be  made  by  writing;  in  the  lattV.  a  writing  is 
not  required,  but  thV  books  all  concur  that  the  appointment  may  be 
by  parol.  The  OhioVatute,  made  an  exhibit,  is  the  same  in  this  re- 
spect with  our  own. 

An  authority,  by^dopting  the  transaction,  may  as  well  be  confer- 
red where  the  question  of  agency  arises  under  the  statute  of  frauds, 
as  under  the  cornmon  law.  The  cases  to  this  effect  are  cited  in  Davis 
V.  Shields,  24  Wend.  325.  See  also  Story  on  Ag.  240,  and  the  cases 
there  cited.  Such  adoptive  authority  relates  back  to  the  time  of  the 
transaction,  and  is  deemed  in  law  the  same  to  all  purposes  as  if  it  had 
been  given  before.     Story  on  Ag.  234,  §  239;   Id.  237,  §  242. 

If  the  writing  given  by  the  agent  be  under  seal,  and  that  be  essen- 
tial, another  rule  comes  in  independently  of  the  statute  of  frauds.  The 
authority  must  be  of  equal  dignity,  or  the  contract  can  not  operate. 
Nor  can  a  specialty  executed  by  attorney  operate  as  such  in  any  case, 
unless  his  power  be  under  seal.    Story  on  Ag.  50,  §  49 ;  2  Kent's  Com.  --. 

613,  4th  Ed.    Yet  even  in  such  case,  it  does  not  follow  that  it  shall    /  -<  K 

not  operate  at  all.  If  the  contract  may  be  made  without  deed,  the  seal 
shall  not  prevent  its  enuring  as  a  simple  contract,  though  the  author- 
ity be  by  parol,  or  merely  implied  from  the  relation  between  the  prin- 
cipal and  agent;  as  if  they  be  partners.  Story  on  Partn.  179;  Ander- 
son V.  Tompkins,  1  Brock.  462,  Fed.  Cas.  No.  365,  per  Marshall,  C. 
J.  This  doctrine  has  no  connection  with  the  question  of  what  shall 
be  a  sufficient  agency  under  the  statute  of  frauds.^'     *     *     * 


(B)  Power  to  Fill  Blanks  in  a  Deed 

SHEPPARD'S  TOUCHSTONE,  p.  54. 

Every  deed  well  made  must  be  written,  i.  e.  the  agreement  must  be 
till  written  before  the  sealing  and  delivery  of  it ;  [or  as  part  of  the 
«;ame  transaction,  and  as  a  cotemporaneous  act,  or,  at  latest,  while  the 
oeed  is  in  fieri ;]  for  if  a  man  seal  and  deliver  an  empty  piece  of  paper 
or  parchment,  albeit  he  do  there  withal  give  commandment  that  an  ob- 
ligation or  other  matter  shall  be  written  in  it,  and  this  be  done  accord- 
ingly, yet  this  is  no  good  deed. 

13  As  sustaining  the  older  and  stricter  rule  as  to  sealed  authority  to  make 
a  scaled  instrument,  see  Gordon  v.  Bulkeley,  14  Serg.  &  R.  (Pa.)  331  (182G). 
(}odd.Pr.&  a. — 5 


66  THE  RELATION  (Part  1 


CRIBBEN  V.  DEAL. 

(Supreme  Court  of  Oregon,  1S91.     21  Or.  211,  27  Pac.  1016,  28  Am.  St. 

Rep.  746.) 

Suit  in  equity  to  set  aside  a  deed  of  general  assignment,  in  which 
by  parol  authority  an  agent  had  inserted  the  name  of  the  assignee 
after  the  deed  had  been  signed,  sealed  and  acknowledged,  but  before 
delivery. 

Lord,  J.^*  [After  stating  the  facts  and  quoting  Sheppard's  Touch- 
stone, said  of  the  doctrine  there  laid  down  ;]  *  *  *  This  is  founded 
upon  that  ancient  and  technical  rule  of  the  common  law  that  the  au- 
thority to  make  a  deed,  or  to  alter  or  fill  a  blank  in  some  substantial 
part  of  it,  cannot  be  verbally  conferred,  but  must  be  created  by  an 
instrument  of  equal  dignity.  As  the  deed  was  under  seal,  to  alter 
or  complete  it  by  the  insertion  of  the  name  of  the  grantee  required 
the  authority  to  be  under  seal.  So  firmly  rooted  was  this  principle 
that  it  mattered  not  with  what  solemnities  a  deed  may  have  been 
signed  and  sealed,  unless  the  grantee's  name  was  inserted,  and  deliv- 
ery was  made  to  him,  or  some  one  legally  authorized  under  seal,  it 
was  a  nullity.  It  imposed  no  liability  on  the  party  making  it,  nor  con- 
ferred any  rights  upon  the  party  receiving  it ;  it  was,  in  fact,  no  deed. 
Hence  it  was  held  that  parol  authority  to  fill  a  blank  with  the  name 
of  a  grantee  could  not  be  conferred  without  violating  established  prin- 
ciples of  law  and  rendering  the  deed  void. 

This  doctrine  still  prevails  in  England.  It  is  true  that  in  the  case 
of  Texira  v.  Evans,  cited  in  Master  v.  Miller,  1  Anstr.  225,  Lord  Mans- 
field held  otherwise,  but  this  was  in  efifect  overruled  in  Hibblewhite 
v.  McMorine,  6  Mees.  &  W.  200,  on  the  ground  that  an  authority  to 
execute  a  sealed  instrument  could  not  be  given  by  parol,  but  must  be 
given  by  deed,  although  this  latter  case  seems  more  or  less  trenched 
upon  by  the  decision  in  Eagleton  v.  Gutteridge,  11  Mees.  &  W.  465,  and 
by  Davidson  v.  Cooper,  Id.  778,  and  in  West  v.  Steward,  14  Mees.  & 
W.  47.  But  the  rule  has  never  been  universally  accepted  in  this  coun- 
try, and,  however  the  holding  of  some  courts  may  be,  still  the  better 
opinion  and  the  prevailing  current  of  authority  is  that  when  a  deed 
is  regularly  executed  in  other  respects,  with  a  blank  left  therein  for 
the  name  of  the  grantee,  parol  authority  is  sufficient  to  authorize  the 
insertion  of  the  name  of  such  grantee,  and  that,  when  so' filled  out  and 
delivered,  it  is  a  valid  deed. 

It  is  true  that  Chief  Justice  Marshall,  in  U.  S.  v.  Nelson,  2  Brock. 
74,  Fed.  Cas.  No.  15,862,  felt  bound  to  follow  the  ancient  rule,  but 

J  4  Part  of  the  opinion  is  omitted. 


Frets: 

Action  In  equity  to  set  «side  a  deed  of 
^ener»=l  assignment  ,  in  which  an  figent  "by  pprol  ©» 
."Authority  had  inserted  the  name  of  the  assignee 
fifter  the  deed  hpd  been  signed,  sealed,  and 
?ci::i  owl  edged,  but  before  delivery. 

Court : 

Under  the  old  common  l^w  T)^rol  author- 
ity to  fill  a  blank  with  the  name  of  a  gr*^ntee 
could  not  be  conferred.  The  doctrine  still 
prevails  in  Snglfnd .  In  this  county,  however, 
the  weight  of  authority  is  that  when  a  deed  is 
regularly  executed  in  other  respects,  parol  auth- 
ority is  sufficient  in  a  case  of  this  kind  to 
make  a  valid  deed. 


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Ch.  4)  CREATION  OF  THE  RELATION  67 

his  opinion  clearly  indicates  that  he  felt  that  the  authority  to  fill  a 
blank  in  an  instrument  under  seal  should  be  held  to  be  valid.  He 
says:  "The  case  of  Speake  v.  U.  S.,  9  Cranch,  28,  3  L.  Ed.  645,  in 
determining  that  parol  evidence  of  such  assent  may  be  received,  un- 
doubtedly goes  far  towards  deciding  it,  and  it  is  probable  that  the  same 
court  may  completely  abolish  the  distinction  in  this  particular  between 
sealed  and  unsealed  instruments."  Again  :  "If  this  question  depended 
on  those  moral  rules  of  action  which  in  the  ordinary  course  of  things 
are  applied  by  courts  to  human  transactions,  there  would  not  be  much 
difficulty  in  saying  that  this  paper  ought  to  have  the  effect  which  the 
parties  at  the  time  of  its  execution  intended  it  should  have."  And 
he  concludes  with  this  statement :  "I  say  with  much  doubt,  and  with 
a  strong  belief  that  this  judgment  will  be  reversed,  that  the  law  on 
the  verdict  is,  in  my  opinion,  with  the  defendants." 

The  rule  was  purely  technical,  and  the  outgrowth  of  a  state  of  af- 
fairs and  condition  of  the  law  which  does  not  now  exist.  The  reason 
of  the  law  is  the  life  of  it,  and  when  the  reason  fails  the  law  itself 
should  fail.  At  the  present  day  the  distinction  between  sealed  and 
unsealed  instruments  is  fast  disappearing,  and  the  courts  are  gradu- 
ally doing  away  with  them.  As  Judge  Redfield  said:  "But  it  [the 
rule]  seems  to  be  rather  technical  than  substantial,  and  to  found  itself 
either  on  the  policy  of  the  stamp  duties,  or  the  superior  force  and 
sacredness  of  contracts  by  deed,  both  of  w^iich  have  little  importance 
in  this  country;  and  the  prevailing  current  of  American  authority  and 
the  practical  instincts  and  business  experience  and  sense  of  our  people 
are  undoubtedly  otherwise."     Redf.   R.  R.  p.   124. 

In  Drury  v.  Foster,  2  Wall.  24,  17  L.  Ed.  780,  the  court  says:  "Al- 
though it  was  at  one  time  doubted  whether  parol  authority  was  ade- 
quate to  authorize  an  alteration  or  addition  to  a  sealed  instrument,  the 
better  opinion  of  this  day  is  that  the  power  is  sufficient."  Again,  in 
Allen  V.  Withrow,  110  U.  S.  119,  3  Sup.  Ct.  517,  28  L.  Ed.  90,  the 
court  says :  "It  may  be,  and  probably  is,  the  law  in  Iowa,  as  in  sev- 
eral states,  that  the  grantors  in  a  deed  conveying  real  property,  signed 
and  acknowledged,  with  a  blank  for  the  name  of  a  grantee,  may  au- 
thorize another  party  by  parol  to  fill  up  the  blank."  "But,"  he  con- 
tinues, "there  are  two  conditions  essential  to  make  a  deed  thus  exe- 
cuted in  blank  operate  as  a  conveyance  of  the  property  described  in  it : 
The  blank  must  be  filled  by  the  party  authorized  to  fill  it,  and  this 
must  be  done  before  or  at  the  time  of  the  delivery  of  the  deed  to  the 
grantee  named."     In  the  case  at  bar  these  conditions  were  fulfilled. 

In  Inhabitants  of  South  Berwick  v.  Huntress,  53  Me.  89,  87  Am. 
Dec.  535,  the  court  held  that  a  party  executing  a  deed,  bond,  or  other 
instrument,  and  delivering  the  same  to  another  as  his  deed,  knowing 
\here  are  blanks  in  it  to  be  filled  necessary  to  make  it  a  perfect  in- 
strument, must  be  considered  as  agreeing  that  the  blanks  may  be  thus 
filled  after  he  has  executed  it.  In  delivering  the  opinion  of  the  court, 
Kent,   T-.  said :    "The   rule  invoked   is  purely   technical.      Practically 


G8  THE  RELATION  (Part  1 

there  is  no  real  distinction  in  tliis  matter  between  bonds  and  simple 
contracts.  There  is  no  more  danger  of  fraud  or  injury  or  wrong  in 
allowing  insertions  in  a  bond  than  there  is  in  allowing  them  in  a  prom- 
issory note  or  bill  of  exchange,  and  in  neither  can  unauthorized  altera- 
tions be  made  with  impunity.  Considering  that  the  assumed  difference 
rests  on  a  mere  technical  rule  of  the  common  law,  we  do  not  think 
that  the  rule  should  be  extended  beyond  its  necessary  limits,  viz.,  that 
a  sealed  instrument  cannot  be  executed  by  another,  so  that  its  distin- 
guishing characteristic  as  a  sealed  instrument  is  in  question,  unless 
by  an  authority  under  seal." 

Likewise,  in  Bridgeport  Bank  v.  New  York,  etc.,  R.  Co.,  30  Conn. 
274,  Ellsworth,  J.,  said :  "Nor  can  any  reason  be  assigned,  which  is 
founded  in  good  sense,  and  is  not  entirely  technical,  why  a  blank  in 
an  instrument  under  seal  may  not  be  filled  up  by  the  party  receiving 
it,  after  it  is  executed,  as  well  as  any  other  contract  in  writing,  where 
the  parties  have  so  agreed  at  the  time.  In  either  case,  the  contract, 
when  the  blank  has  been  filled,  expresses  the  exact  agreement  of  the 
parties,  and  nothing  but  an  extreme  technical  view,  derived  from  the 
ancient  law  of  England,  can  justify  the  making  of  any  distinctions 
between  them."     *     *     * 

The  court,  after  citing  other  American  cases  to  the  same  effect,  sus- 
tained the  decree  dismissing  the  bill.-^^ 


(C)  Statutes  Abolishing  Sealed  Requirements 

SWARTZ  V.  BALLOU. 
(Supreme  Court  of  Iowa,  1877.    47  Iowa,  188,  29  Am.  Rep.  470.) 

Action  to  recover  possession  of  land.  Defendant  claimed  under 
one  Davis,  who  held  a  deed  which  had  been  perfected  in  every  respect 
by  plaintiff,  except  that  no  grantee  was  named.  Plaintiff  sent  this 
instrument  to  one  Eouther,  who  inserted  the  name  of  Davis  as  gran- 
tee.    Plaintiff  denied  the  authority  of  Louther  to  do  what  he  had  done. 

Se;eve;rs,  J.'^^     [After  stating  the  facts,  and  holding  that  Louther 

had  at  least  implied  authority  by  parol  to  fill  in  the  grantee's  name :] 
*     *     * 

15  The  modern  view  is  upheld  in  an  able  opinion  by  Mitchell,  J.,  In  State 
V.  Youu?,  23  Minn.  551  (1877).  The  same  view  is  taken  in  Lafferty  v.  Laf- 
ferty,  42  W.  Va.  783,  26  S.  E.  262  (1896),  and  in  Bridgeport  Bank  v.  N.  Y. 
&  N.  H.  R.  Co.,  30  Conn.  231  (1861).  That  authority  to  fill  blanks  in  a  deed 
must  be  conferred  by  power  under  seal  is  held  in  Mosby  v.  Arkansas,  4  Sneed 
(Tenn.)  324  (1857),  citing  the  leading  case  of  Plibblewhite  v.  McMorine,  6  M. 
&  W.  200,  in  which  the  English  court,  per  Parke,  B.,  overruled  the  earlier 
case  of  Texira  v.  Evans,  decided  by  Lord  Mansfield,  and  cited  in  1  Aust.  228 
(1792). 

16  Part  of  the  opinion  is  omitted. 


2^*^ rt*^  v«  Br  1 1  ou . 

F^cts: 

Action  to  recover  possession  of  l^nd . 
Def,  cl^^imed  under  one  UfTis,  who  held  a  deed 
which  had  been  perfected  in  every  w«y  by  "ptf.,  e: 
exee-nt  th^t  no  grantee  wps  named*  Lef.  sent  this 
instrument  to  one  Louther  who  inserted  Davis  •^s 
grantee.  Ptf,  denied  his  authority  to  so  do. 

Court : 

Louther  had  at  least  implied  authority 
by  parol  to  fill  in  the  grantee's  name.   Since 
seals  have  been  abolished  in  this  stf'te,  the 
reason  for  the  old  common  law  rule  is  gone . 
The  rule  aiDplicable  here  is:  "If  a  person 
competent  to  convey  real  estate  sign  and  ack- 
owledge  a  deed  in  blajik,  and  deliver  same  to 
an  agt.  with  an  express  or  implied  authority 
to  fill  up  the  blank  and  perfect  the  conveyance, 
its  validity  cannot  be  controverted.  Parol 
authority  is  sufficient. 

TERDICT  APFIRIvED. 


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.  JTi©iol1:lxr8   8X  x^li 


Ch.  4)  CREATION  OF  THE  RELATION  69 

II.  It  must  be  remembered  that  the  deed,  in  its  imperfect  condition, 
was  fully  delivered  to  Louther.  Whether  authority  may  be  conferred 
in  express  terms  by  parol  to  insert  the  name  of  a  grantee  in  a  deed 
perfect  in  all  other  respects,  or  that  it  may  be  implied  from  the  acts 
and  corduct  of  a  grantor  as  between  him  and  a  purchaser  in  good 
faith,  are  questions  which  have  been  largely  discussed,  and  the  au- 
thorities are  not  in  accord  on  the  subject. 

These  questions  first  came  before  this  court  in  Simms  v.  Hervey, 
19  Iowa,  273,  and  are  there  elaborately  considered,  and  the  authori- 
ties referred  to  by  Dillon,  J.  It  is  unnecessary  to  restate  the  argu- 
ments or  make  another  citation  of  the  authorities,  except  to  say  it  is 
apparent  the  rule  that  such  authority  cannot  be  conferred  rests  largely, 
if  not  entirely,  on  the  common-law  doctrine  in  relation  to  instruments 
under  seal,  such  doctrine  being  that  such  authority  could  only  be  con- 
ferred by  instrument  under   seal. 

Seals  having  been  abolished  by  statute  in  this  state,  and,  therefore, 
not  necessary  to  the  validity  of  a  conveyance  of  real  estate,  it  would 
seem,  as  the  reason  for  the  rule  has  ceased,  that  the  rule  itself  should 
not  be  further  recognized.  The  exact  question  in  the  present  case 
was  not  determined  in  Simms  v.  Hervey.  It  is  true,  the  writer  of 
the  opinion  seems  to  have  concluded  the  better  rule  would  be  to  deny 
that  such  authority  could  be  conferred  by  parol.  It  is  certain,  how- 
ever, the  court  did  not  concur  in  this  view.  This  is  apparent  from  the 
opinion,  and  the  subsequent  case  of  Owen  v.  Perry,  25  Iowa,  412, 
96  Am.  Dec.  49,  the  opinion  in  which  was  written  by  Wright,  J.,  and 
who  concurred  in  the  conclusion  reached  in  Simms  v.  Hervey.  See, 
also,  Devin  v.  Himer,  29  Iowa,  297 ;  Clark  v.  Allen,  34  Iowa,  190. 
It  may  be  said  the  facts  in  none  of  these  cases  present  the  questions 
in  the  case  at  bar,  yet  it  will  be  found  difficult  to  draw  a  distinction 
in  legal  effect  between  the  present  case  and  Owen  v.  Perry. 

Without  entering  into  a  discussion  of  the  reasons,  and  referring  to 
authorities  at  greater  length,  we  conclude,  as  the  result  of  our  in- 
vestigation, that  the  decided  weight  of  modern  authority,  and  reason, 
is  in  favor  of  the  rule  announced  by  the  Supreme  Court  of  the  United 
States  in  Drury  v.  Foster,  2  Wall.  24,  17  L.  Ed.  780.  It  is  there  said : 
"If  a  person  competent  to  convey  real  estate  sign  and  acknowledge  a 
deed  in  blank,  and  deliver  the  same  to  an  agent  with  an  express  or 
implied  authority  to  fill  up  the  blank  and  perfect  the  conveyance,  its 
validity  could  not  be  well  controverted.  Although  it  was  at  one  time 
doubtful,  whether  a  parol  authority  was  adequate  to  authorize  an  al- 
teration or  addition  to  a  sealed  instrument,  the  better  opinion  at  this 
day  is  the  power  is  sufficient."  See,  also,  the  late  cases  of  Van  Etta 
v.  Evenson,  28  Wis.  33,  9  Am.  Rep.  486;  Field  v.  Stagg,  52  Mo.  534.^ 
14  Am.  Rep.  435 ;    Schintz  v.  McManamy,  33  Wis.  299. 

The  contrary  rule  was  adopted  in  California,  in  the  recent  case  ^f 
Upton  V.  Archer,  41  Cal.  85,  10  Am.  Rep.  266.  No  authorities  are 
cited   except  Story   and   Dunlap's  Paley   on   Agency,   and   it  is   said 


70  THE  RELATION  (Part  1 

the  case  comes  within  the  "sixth  section  of  the  statute  of  frauds." 
Whether  the  statute  of  frauds  of  California  is  different  from  that  of 
this  and  other  states,  we  are  not  advised. ^^     *     *     * 
Affirmed. 


(D)  Deeds  as  Equitable  Contracts  to  Convey 

AlORROW  V.  HIGGINS. 
(Supreme  Court  of  Alabaraa,  1856.    29  Ala.  448.) 

Bill  for  injunction  to  restrain  an  action  at  law  to  recover  land,  for 
the  conveyance  of  the  legal  title,  and  for  general  relief.  Complainant 
had  purchased  the  land  of  an  agent,  who  by  the  authority  of  a  letter 
from  the  owner  had  executed  to  complainant  a  deed.  Error  from  a 
decree  dismissing  the  bill. 

Walker,  J.  The  letter  exhibited  with  complainant's  bill,  and  made 
a  part  of  it,  was  a  clear  authority  to  sell  the  land.  Wilson  v.  Troup, 
7  Johns.  Ch.  25;  [Herbert  v.  Hanrick]  16  Ala.  581. 

"It  may  be  asserted,  as  a  general  rule,  that  in  all  cases,  where  an 
agent  has  contracted  within  the  sphere  of  his  agency,  and  the  prin- 
cipal is  not  by  the  form  of  the  contract  bound  at  law,  a  court  of 
equity  will  enforce  it  against  the  principal  upon  principles  ex  aequo  et 
bono."  Story  on  Agency,  209,  §  162.  Although  the  deed  executed 
by  the  agent  in  this  case  may  be  ineffectual  as  a  conveyance  of  the  legal 
title,  because  the  authority  of  the  agent  was  not  given  by  a  written 
instrument  under  seal,  it  may  be  upheld  in  chancery  as  evidence  of  a 
contract  to  sell.  Story  on  Agency,  55,  §  49;  Cocke  v.  Campbell  & 
Smith,  13  Ala.  286;  Welsh  v.  Usher,  2  Hill,  Eq.  167  [29  Am.  Dec. 
63]  ;  Dubois  v.  Delaware  &  H.  Canal  Co.,  4  Wend.  285;  Story  on 
Agency,  §  160,  notes. 

The  principles  above  laid  down  are  conclusive  in  favor  of  the  equity 
of  the  appellant's  bill;  and  therefore  the  decree  of  the  court  below  is 
reversed,  and  the  cause  remanded,  at  the  costs  of  the  appellee. 

17  On  the  effect  of  statutes  abolishing  distinctions  between  sealed  and  un- 
sealed instruments,  see,  also,  Streeter  Co.  v.  Janu,  90  Minn.  393,  96  N.  W. 
1128  (1903). 


_  _  .  cr 

®'  *   ,   ,n^   fens   .8X*xi   i  ^»-    J     niticTHioO 
«r    «t«f^'  1^^' '^^■^  ^^^"^  j-4    rre*'    o:t 

"  "^^^^dfiw  be«o«'^*^-«=  ':*-.;o^^*^-^  «i^^  ^° 

'    ."',^  tt„i«a-   "   *"°^f  aixo-ioni^o   nocra 


Morrow  V ,  Hjggins • 

Pf>ets: 

Bill  for  in.junetion  to  restrain  an 
•action  ?t  Ip'W  to  recover  l^nS,  for  the  convey- 
'^ice  of  the  lep-'^l  title,  end  for  general  reli€ 
Comr>14inj^nt  hrd  r>ureh?se(3  the  l^nd  of  an  agt., 
v?ho  h.v  the  Futhorlty  of  a  letter  from  the  own« 
h«ri    executed    to  him  a  deed. 

Co'irt : 

The  letter  here  is  clearly  ^n  author] 
to  ^ell  the  I'^nd.  The  rule  is  th?^t  in  all  cps< 
rhere  ?=n  ^gt»  hr-s   contracted  within  in  sphere 
of  his  cuthoritj-,  end  the  TDrinci-pj^l  is  not  "by 
the  form  of  the  contract  hound  at  l^w,  ^  courl 
of  equity  will  enforce  it  ^g^^inst  the  iDrincip^ 
upon  orinciples  of  euity  and  good  cftnscienee, 
i'he  deed  may  he  upheld  here  as  evidence  of  a 
contract  to  sell. 

VERDICT  FOR  DEF.  REVERSED, 


Ch.  4)  CREATION  OF  THE  RELATION  71 

(B)  Signature  in  the  Principal's  Presence 
LEWIS  V.  WATSON, 

(Supreme  Court  of  Alabama,  1892.    98  Ala.  479,  1.3  South.  570,  22  L.  E.  A.  2!)7, 

39  Am.  St.  Eep.  82.) 

McClellan,  J.i^  This  is  a  statutory  action  for  the  recovery  of  a 
certain  lot  of  land  in  the  town  of  Andalusia.  Watson  is  plaintiff,  and 
Lewis,  as  administrator  of  one  Holley,  deceased,  is  defendant.  Plain- 
tiff derives  title  from  one  Dixon  by  deed  appearing  to  have  been  ex- 
ecuted in  1866.  Defendant  claims  title  through  Watson,  under  a  sale 
and  conveyance  by  the  sheriff'  to  his  intestate  in  1875,  made  in  satis- 
faction of  certain  judgments  against  Watson,  and  also  by  virtue  of  an 
adverse  possession  on  the  part  of  the  intestate  and  himself  subsequent 
to  said  sale  and  conveyance. 

L  Some  rulings  were  made  on  the  trial  in  respect  of  Watson's  title 
to  the  land  prior  to  the  sheriff"'s  sale  and  conveyance  of  it,  as  his  prop- 
erty, to  Holley,  and  upon  testimony  in  relation  thereto.  These  are 
of  no  importance  in  the  case,  and,  whether  erroneous  or  not,  in  the 
abstract,  need  not  be  considered,  since  the  defendant — claiming,  as  he 
does,  under  that  title,  and  having  recognized  its  validity  by  purchasing 
at  the  sheriff's  sale,  and  now  further  recognizing  it  by  a  reliance  upon 
the  acquisition  of  it  through  that  sale,  and  upon  adverse  possession 
since  that  time  under  the  color  of  title,  with  which,  at  least,  he  was 
invested  by  the  conveyance  then  made  by  the  sheriff — is  not  in  a  posi- 
tion to  impeach  Watson's  original  title.  Ware  v.  Dewberry,  84  Ala. 
568,  4  South.  404;  Houston  v.  Farris,  71  Ala.  570;  Tennessee  &  C. 
R.  R.  Co.  v.  East  Alabama  Ry.  Co.,  75  Ala.  516,  525,  51  Am.  Rep.  475. 

2.  The  evidence  as  to  the  execution  of  the  deed  by  the  sheriff'  to 
Holley  was  that  of  the  probate  judge  of  the  county,  and  is  as  follows : 
"That  J.  A.  Thompson,  the  sheriff,  could  not  write  his  name,  and  that 
he  [the  witness]  frequently  wrote  in  the  sheriff's  office  for  said 
Thompson ;  that  he  indorsed  the  levies  on  the  execution  here  in  evi- 
dence, and  wrote  the  deed  of  Thompson,  as  sheriff,  to  Alfred  Holley, 
dated  May  3,  1875 ;  that  said  deed  and  indorsements  on  said  levies  are 
in  his  handwriting;  that  said  J.  A.  Thompson  was  present  when  said 
deed  was  written ;  that  it  was  written  in  the  sheriff's  office,  at  Thomp- 
son's instance,  and  under  his  direction ;  that,  after  the  deed  was  writ- 
ten, Thompson  told  him  to  sign  his  name,  as  sheriff,  to  the  deed,  which 
he  did,  and  then,  as  judge  of  probate,  took  Thompson's  acknowledg- 
ment to  the  deed,  and  carried  it  into  the  probate  office,  and  afterwards 
recorded  it ;  *  *  *  and  that  some  one  came  and  got  the  deed  from 
the  probate  office  after  it  was  recorded,  but  don't  now  remember  who 
it  was." 

IX  I'art  of  the  opinion  is  omitted. 


73  THE  RELATION  (Part  1 

It  is  not  entirely  clear,  on  this  testimony,  that  Thompson  was  actual- 
ly and  immediately  present  when  his  name  was  subscribed  to  the  deed 
by  Fletcher,  by  his  direction;  but,  manifestly,  there  was  room  for  an 
inference  to  be  drawn  to  that  efifect  by  the  jury.  If  he  was  so  present, 
as  the  jury  might  have  found,  the  subscription  to  the  instrument  was 
as  efficacious  as  if  he  had  been  able  to  write  his  name,  and  with  his 
own  hand  had  written  it,  or  he  being  unable  to  write  his  name,  as  if 
he  had  made  his  mark,  and  the  words,  "his  mark,"  had  been  written 
against  it,  and  the  signature  thus  made  attested  by  two  witnesses. 
This  on  the  principle  that  where  the  grantor  is  present,  and  authorizes 
another,  either  expressly  or  impliedly,  to  sign  his  name  to  the  deed, 
it  then  becomes  his  deed,  and  is  as  binding  upon  him,  to  all  intents 
and  purposes,  as  if  he  had  personally  affixed  his  signature.  The  rea- 
son for  the  doctrine  is  thus  stated  by  Shaw,  C.  J. :  "The  name  being 
written  by  another  hand,  in  the  presence  of  the  grantor,  and  at  her 
request,  is  her  act.  The  disposing  capacity,  the  act  of  mind,  which 
are  the  essential  and  efficient  ingredients  of  the  deed,  are  hers ;  and 
she  merely  uses  the  hand  of  another,  through  incapacity  or  weakness, 
instead  of  her  own,  to  do  the  physical  act  of  making  a  written  sign. 
To  hold  otherwise  would  be  to  decide  that  a  person  having  a  full  mind, 
and  clear  capacity,  but,  through  physical  inability,  incapable  of  making 
a  mark,  could  never  make  a  conveyance  or  execute  a  deed."  Gardner 
V.  Gardner,  5  Gush.  483,  52  Am.  Dec.  740;  1  Devi.  Deeds,  §§  232,  233; 
Kime  v.  Brooks,  9  Ired.  218;  Frost  v.  Deering,  21  Me.  156;  Videau 
v.  Griffin,  21  Gal.  390;  Rev.  St.  Me.  1857,  p.  56;  Lovejoy  v.  Richard- 
son, 68  Me.  386;   Bird  v.  Decker,  64  Me.  551.     *     *     * 

For  errors  in  the  trial,  reversed  and  remanded. 


SECTION  5.— RATIFICATION 

I.   DivFlNlTlON 


ELLISON  V.  JACKSON  WATER  CO.  et  al. 

(Supreme  Court  of  California,  1859.     12  Cal.  542.) 

Action  to  recover  $48,154.14  for  the  construction  of  a  ditch,  or 
canal,  under  a  contract  with  the  water  company.  Bayerque  held  a 
mortgage  on  the  ditch,  and  plaintiff  claimed  that,  to  induce  him  to  com- 
plete the  construction,  Bayerque  had  adopted  and  ratified  the  con- 
tract.   Judgment  against  defendants,  and  Bayerque  appealed. 

FiEivD,  J.^®  [After  stating  the  facts,  and  disposing  of  the  case 
against  the  company:]     *     *     *     ^g  against  the  company,  the  judg- 

19  Part  of  the  opinion  is  omitted. 


Ellison  V.  Jftckson  ^/pter  Co. 
PrctP:  "  ~  ' 

Action  to  recover  a  sum  of  money  for 
construction  work,  under  a  contract  with  the 
wPter  Co.  Bpyre^ue  held  «.  mortgage  on  the  work, 
and  ptf.  claimed  th»t,  to  induce  him  to  comx>lete 
it,  Bayre^ue  had  adoDted  and  ratified  the  contract 
3ourt : 

To  adoption  and  ratification  there  must 
be  some  relation,  actual  or  assumed,  of  -orincipal 
and  agt.  There  wps  none  here  between  the  'Tater  Co. 
and  B  AYre^ue.  The  evidence  does  not  show  any 
undertaking  upon  which  Bayre^ue  can  be  personally 
charged  on  the  contract  between  ptf.  and  the  V/pter 
Co. 

TSRDICT  FOR  DEP. 


'.  ^. 

,3i[iow  erf:^  no   eg-^B^Jiom  a   &Ieff  ©u^eT^^S   .oO  it 
e^el'Tflioo   od   Kxrf  ©e;r5nl   o*    ,;t^r{;f    &©ffiisIo   .l^Jq 

:  t 

iBglSiiitg  \o   ,5d«fiiraas  xo  I^-iidoB   ,nox,tBl©i  ©mo? 
.oO  -xe'v^BV;  ©n'i  n©e??'^©d"  ©leii  ©nors  a.«w  ©i©rfr   •;J3S 
^ns  woifa   "Jon  b©o&   ©onebxT©   orf^i'   .©^'^©rcYA  3 
^XI'^nosiecT  acf  hbs   ©x^'^©l:'^^J^S     riolrfv/  nogx;  snisIsitTt 
ie^.«\V  ©.rl:^    5nB   .Itiq  neewJecT  ;toi?x;fnoo   ©rf^  no   &©3'! 

♦^aa  HO'5  ToiansT 


73 

Q^    4\  CREATION    OF    THE    RELATION 

ment  for  damages  must  be  affirmed.    It  is  only  necessary,  *»,  to  de- 
Srmine  the  effeet  of  the  alleged  "adoption  and  raffieat.on    of  Bayer 
nue  and  the  validity  of  the  lien  asserted  upon  the  ditch. 
^  U  cannot  in  strictness  be  said  that  Bayerque  "adopted  and  ratified 
the  contract  be  ween  the  plaintiff  and  the  company.    These  terms  are 
propertyapUcable  only  to  contracts  made  by  a  party  acting  or  assum-         . 
irsr  to  act  for  another.    The  latter  may  then  adopt  or  ratify  the  act 
?te  former,  however  unauthorized.     To  adopUon  and  ra  ification 
there  must  be  some  relation,   actual  or  assumed,  of  principal   ana 
leen,     No  such  relation  existed  between  the  company  and  Bayerque 
h'e  contract  between  it  and  Ellison  was  not  made  ™  Bayerque  s  name, 
or  for  his  benefit,  or  upon  any  authority  ^ ™™  h'-    Wtat        Plaintiff, 
however,  intends  by  these  terms,  IS  this.    -Ll^atmyerqu 
obligations  of  the  company  to  ElHson  upon  the  contract,  or  in  other 
wo  S  guaranteed  the  performance  of  the  contract  on  the  paxt  o    the 
company      In  examining,  then,  the  evidence  contained  in  the  record. 
weTd  nothing  which  ettabHshes  or  even  tends  to  etb.s^^         under- 
taking upon  which  Bayerque  can  be  personaUy  charged. 
Reversed  as  to  Bayerque,  and  remanded. 

FIRST  NAT.  BANK  OF  FT.  SCOTT  v.  DRAKE. 

,c nr.,.^^  nf  Kansas.    ^R^^.     29  Knn    ^^^    44   Am.   ReD.  646.) 

First  Nat^l,  Bfink  of  Ft,   Scott  v,   Drake ♦ 

Facts: 

Action  to  recover  money  claimed  to  haye 
"been  wron.^fully  a-ppropri^ted  by  Brake  while  acting 
as  cashier  of  a  hank  in  which  he  owned  4/5  of  the 
stock.  He  Ipter  sold  the  stock  and  ptfs.  elpim 
th^-t  the  ^mt.  withdrawn  hy  him  should  haye  heen 
Dfirt  of  fbe  ^rj?ets,  Def.  clrimed  th^t  the  hpnk 
hooks  shorerl  the  f^ets,  and  1:h«  t  ptf.  as  directors 
were  ch»^rred  vith  their  knowledge,  ^nd  so  h^d 
either  puthor'^ea  or  ratified  his  acts. 

Court: 

The  d'. rectos  were  not  charged  with  the 
>aowle(3ge  which  is  essential  to  r^tif ieation, 
I"'  7S  down  the  rule  thp  t  wherever  there  is  »  void- 
'■'-le  pct,  confirsnation  of  that  act  hy  the  party 
'■-pumed  to  "be  T^onnd   is  in  l«w  r-  ratification. 

JUDGMENT  EEVEHSED. 

21  Part  of  the  opinion  is  omittoa. 


74 


THE    RELATION 


(Part  1 


/> 


it  is  therefore  only  a  branch  of  the  doctrine  of  principal  and  agent. 
This  is  too  limited.  Burrill,  in  his  Law  Dictionary,  says  that  "ratifica- 
tion is  the  confirmation  of  a  previous  act  done  either  by  the  party  him- 
self, or  by  another ;  that  it  is  the  confirmation  of  a  voidable  act" ;  and 
cites  as  authority  Story,  Ag.  §§  250,  251,  and  also  2  Kent,  Comm.  237. 
One  of  those  citations  treats  of  the  relations  of  principal  and  agent ; 
the  other,  of  the  confirmation  of  the  acts  of  an  infant  by  himself  after 
becoming  of  age.  Bouvier,  in  his  Law  Dictionary,  gives  similar  scope 
to  the  meaning  of  ratification.  We  think,  therefore,  it  will  not  do  to 
say  that  it  is  strictly  a  branch  of  the  doctrine  of  principal  and  agent.' 
It  is  the  confirmation  of  a  voidable  act.  It  is  entirely  immaterial  what 
that  is  which  renders  the  act  voidable ;  whether  a  lack  of  present  power 
tomake  a  valid  contract,  as  in  the  case  of  infancy,  or  because  of  fraud 
nd  misrepflesentation  on  the  part  of  the  other  contracting  party,  or 
because  it  is  the  unauthorized  attempt  of  an  assumed  agentUo  bind  his 
principal.  /  Wherever  there  is  a  voidable  act,  confirmation  oLf  that  act 
by  the  panty  assumed  to  be  bound  is  in  law  a  ratification.--  *  *  * 
On  the  ground  that  the  evidence  should  have  been  submitted  to  the 
jury,  reversed  and  remanded  for  a  new  trial. 


^ 


vM 


K^ 


I. 


i'^ 


v^ 


SCHREYER  v.  TURNER  FLOURING  MILLS  CO. 

(Supreme  Court  of  Oregon,  1896.     29  Or.  1,  43  Pac.  719.) 

Action  to  recover  money  loaned  to  the  promoters  of  defendant  cor- 
poration prior  to  its  incorporation. 

WooLVERTON,  J.-^  [After  disposing  of  another  point:]  *  *  * 
The  defendant,  while  it  may  not  have  been  in  esse  at  the  date  fixed  by 
the  complaint,  yet  it  could,  at  any  time  after  its  organization,  by  adop- 
tion, make  the  contract  its  own.  It  has  been  said  that  the  adoption  of  a 
former  contract  is  the  making  of  a  contract  as  of  the  date  of  the  adop- 
tion. McArthur  v.  Printing  Co.,  48  Minn.  322,  51  N.  W.  216,  31  Am. 
St.  Rep.  653.  In  their  primary  signification,  there  is  a  manifest  distinc- 
tion between  "adoption"  and  "ratification."  The  one  signifies  to  take 
and  receive,  as  one's  own,  that  with  reference  to  which  there  existed  no 
prior  relation,  either  colorable  or  otherwise ;  while  the  other  is  a  con- 
firmation, approval,  or  sanctioning  of  a  previous  act,  or  an  act  done,  in 
the  name  or  on  behalf  of  the  party  ratifying,  without  sufficient  or  legal 
authority, — that  is  to  say,  the  confirmation  of  a  voidable  act.  But,  as 
the  terms  relate  to  contracts,  some  lexicographers  treat  them  as  synony- 
mous.    Rapalje  thus  defines  "adopt — adoption":    "Of  contract.     To 

22  In  Gallup.  Trustee,  v.  Fox,  64  Conn.  491.  30  Atl.  756  (1894),  the  court 
held  that  "ratification  is  the  adoption  of  a  previously  formed  contraet."  This 
hroad  view  of  ratification  is  approved  in  Hartman  v.  Hornsby,  142  Mo.  368, 
44  S.  W.  242  (1897). 

2  3  Part  of  the  opinion  is  omitted. 


'J 


UiiA.  M 


r  1-. 


^ 


Screyer  v.  Turner  Plouring  Mills  Co. 
cts: 

Action  to  recover  money  loaned  to  the  isapemi 
romoters  of  def ,  corporation  before  its  incorpor- 
tion, 
iirt : 

The  promoters  c^^nnot  be  agents  of  an  un- 
ron  co^roration  here:  but,  where  they  have  assum- 
a  to  ac^  for  it,  and  to  contract  in  its  n«me, 
^e  approval  and  confirmation  of  such  acts  by  the 
orporation  ,  when  organization  has  been  duly 
scomplished,  are  but  the  r^tifaction  of  the  acts 
f  an  unauthorized  agent.  The  result  is  the  same 
lether  we  call  it  "adoption"  or"ratification" . 


if 


VERDICT  FOR  PTF. 


,ernf»fi  a^i  ni   ^o9,i^aoQ   o^   bnn   ^il  io1   ^ob 

x^InB  need"  8-Bxf  noittp-siiiP.-a'xo  neifw  ,    nolitBi 
a;to.*^  ©rf;t  lo  xxolto'^^l^.f^i   edi   issd  eiB   ,f)erfailcr 

affi«8  ©rf^  31   ^tluasT  ©rfT  .drie^B  be^ltodiL'snu 


no  xt©il   8 'oln'^^rfoen^    ^.  ©soIo©io^   o:t   nol:toA 
.^©5   d'srix»'3-Q  ffil^Io    -^    5f^ri   .^:f7   •  v;:tT9n'ox<T 
,©i>nsa«f3  sirf  :snixjjb   ©rnoff  .s'^^^o   :t  ^    &©IJ 

3irf  ©v.«3    ,00;?    ,©oi'tl-o   sirf  s?^   &©85j   s^niecf   e. 
lo   itfi0m©I:t ^'©s   ©^li   -xol:    5.^9rf'^>   bs^f-'b  7fo©r'o    - 
,®1:iw  ©ff^  moil:   d'al©o©i    =^   bebn'-^nsb   bn^  mi^J 

nl   bn.i^cfajjii  !t©rf  ^o   ©mBn   ©.rfit   rfitjw  bsn^la   3=^w 

©xf  ,©fiioxi  ,K*xi/^©i   •e^^;tfT  norrL'   ^fwo  T©r[  o;t   no  J 
bxxB  "iloerlo   ©rfu   ]ioot    ,noi:;to«8r^'^T:t   ©.K:t  lo    bl( 

,1:©b  i^cf   blBa  teren  a-^w  smf^a   ©ff;t   ;tucf    ,;fi    b©;tJ 


rm 


•  *t;tcf  Oj  ri©vx3  :?fs8ifo  ©ff^  xO  ©oii'^;^7©oo«  ©rf- 
ben^la  J'CTi©o©i  ©rf*  x'±l^si  0^  be^^teqo  ©Ixw  i 
,:t8''f^I  :^.e  ,waI  ©rl^  lo  8©^e  edd  fli  •ffilff  lolt  i 
-©blv©  ®B  beau  ©d  bli/ow  lalao©i  airf^t  ;t  ^rfit  wj 
ic4o=^i^noo  ©ifit  -'^cf  ^cfsb  ©rf^  lo  ;?n©ffl^«Gr  ©ri^  1 
t o^  I r  ••'  ■  •  --qa ei  Bl  *1  t'l  .  betevlle b  3Bw  *  1  r ' 
)dJ  io  :   ©8K00  ©Icff^cfG'xor   fciiB  s;Hi;8©T   doe 

•  b©xlx*Bt    81^1^ 


Ch.  4)  CREATION  OF  THE  RELATION  75 

adopt  a  contract  is  to  accept  it  as  binding,  notwithstanding  some  defect 
which  entitles  the  party  to  repudiate  it.  Thus,  when  a  person  affirms  a 
voidable  contract,  or  ratifies  a  contract  made  by  his  agent  beyond  his 
authority,  he  is  said  to  adopt  it."  See  Rap.  &  L.  Law  Diet.  31.  See, 
also,  And.  Diet.  Law,  36.  Now,  as  regards  a  contract  made  or  an 
obligation  incurred  by  the  promoters  of  a  corporation  in  the  name  of, 
or  for  and  in  behalf  of,  a  contemplated  corporation  it  would  seem  that 
an  adoption  or  a  ratification  thereof  by  the  corporation  after  it  had 
developed  into  a  legal  entity  would  mean  one  and  the  same  thing,  and 
would  be  accomplished  by  one  and  the  same  process.  True,  the  pro- 
moters cannot  be  the  agents  of  an  unborn  corporation ;  but,  where  they 
have  assumed  to  act  for  it,  and  to  contract  in  its  name,  the  approval 
and  confirmation  of  such  acts  by  the  corporation,  when  organization 
has  been  duly  accomplished,  are  but  the  ratification  of  the  acts  of  an 
unauthorized  agent.  And  the  result  is  the  same,  whether  we  call  it 
"adoption"  or  "ratification."  ^* 

But  it  is  not  very  material  here  to  determine  whether,  as  relating  to 
contracts,  these  terms  are  synonymous,  or  are  capable  of  being  thus 
distinguished,  as  they  might  be  were  the  statutes  of  frauds  or  limita- 
tions involved.  Suffice  it  to  say,  authorities  are  not  wanting  which 
hold  them  to  mean  one  and  the  same  thing.  See  4  Thomp.  Corp.  § 
532 L  and  Stanton  v.  Railroad  Co.,  59  Conn.  285,  22  Atl.  300,  21  Am. 
St.  Rep.  110.     *     *     * 

Judgment  for  plaintiff  affirmed. 


STEFFENS  v.  NELSON  et  al. 

(Supreme  Court  of  Miunesota,  1905.    94  Minn.  365,  102  K  W.  871.) 

Action  to  foreclose  a  mechanic's  lien  on  defendant's  property. 

Jaggard^  J.^^  [After  stating  the  facts  and  passing  upon  another 
point:]  *  *  *  2.  The  plaintiff  Steflfens  had  no  office;  he  had 
placed  the  number  of  his  residence  on  his  cards  and  billheads.  The 
agent  of  the  contractor  called  there  in  Steffens'  absence,  gave  his  wife 
a  check  of  the  contractor,  dated  ahead,  for  the  amount  of  Steffens' 
claim,  and  directed  her  to  sign  a  receipt.  She  signed  that  receipt,  "Pe- 
ter Steffens,  Alaria  Steffens."  She  had  no  express  authority  from  her 
husband  so  to  do.     This  receipt  was  taken  by  the  contractor  to  the 

24  Tn  McArthur  v.  Times  Printing  Co.,  48  Minn.  ?,19,  51  N.  W.  216.  .31  Am. 
St.  Rep-  6.53  (1892),  tlie  contract  was  oral  and  not  to  be  performed  within 
a  year  from  ttie  date  of  the  agreement  lietween  tlie  plaintiff  and  the  promoters 
of  the  corporation.  The  court  held  tliat  there  was  not  a  ratification  by  t)>e 
corporation,  for  this  would  have  related  back  to  the  time  of  the  agreement 
with  the  promoters,  at  which  time  the  corporation  was  not  in  existence. 
Moreover,  such  a  contract  would  have  come  within  the  statute  of  frauds,  and 
so  have  failed  for  not  being  in  writing.  But  the  corporation,  by  accepting  the 
services  after  it  came  into  existence,  had  "adopted"'  the  contract,  thereby  mak- 
ing it  date  from  the  time  of  the  adoption,  and  so  not  within  the  statute. 

2'-  Part  of  the  opinion  is  omitted. 


H 


76  THE  RELATION  (Part  1 

owner  and  agent  of  the  mortgagee,  and  was  present  at  the  time  of  set- 
tlement with  the  contractor  about  noon  on  Saturday,  April  12th.  On 
the  afternoon  of  that  day  the  wife  gave  her  husband  the  contractor's 
check,  and  explained  that  she  had  to  sign  a  paper  for  it.  The  husband 
took  the  check  and  deposited  it ;  that  check  was  never  paid.  ^n. 

The  wife,  like  another  person,  may  be  made  an  agent  for  her  hus-      \ 
band,  and  as  such  impose  upon  him  obligations  by  his  authority,  ex-         \ 
press  or  implied,  precedent  or  subsequent.     Hopkins  v.  Mollinieux,  4 
Wend.  465;   Benjamin  v.  Benjamin,  15  Conn.  347,  39  Am.  Dec.  384;         / 
Willingham  v.  Simons,  1  Desaus.  (S.  C.)  272. 

The  proper  decision  of  the  question  thus  presented  depends  upon 
consideration  of  a  neglected  distinction  between  ratification  and  estop-  / 
pel.^®    Lord  Coke  said:   "The  name  'estoppel'  or  'conclusion'  was  giv- 

2  8  See,  also,  Blood  v.  La  Serena  Land  &  Water  Co.,  113  Cal.  221,  41  Pac. 
1017,  45  Pac.  252  (1896),  showing  the  importance  of  the  distinction  between 
ratification  and  estoppel  when  the  mode  of  ratification  is  prescribed  by  stat- 
ute. In  Forsyth  v.  Day,  46  Me.  176  (1S5S),  May,  J.,  puts  it  thus:  *  *  ♦ 
When  a  person  assumes  authority  to  act,  when  in  fact  no  such  authority  ex- 
ists, and  the  assumed  principal  lies  by  and  sees  his  name  used  under  such 
circumstances,  to  the  prejudice  of  innocent  parties,  and  does  not  subsequently 
intentionally  ratify  or  adopt  those  acts,  still  he  may,  under  certain  circum- 
stances, be  estopped  from  denying  such  authority.  If  a  man  will  remain 
silent  when  he  ought  to  speak,  he  will  not  be  permitted  to  speak  when  he 
ought  to  remain  silent.  In  such  cases,  as  the  authorities  cited  in  defence 
fully  show,  it  must  appear,  before  the  assumed  principal  can  be  charged, 
that  the  other  party  was  induced  to  act,  or  did  act  to  his  own  prejudice,  by 
reason  of  the  acts  and  conduct  of  the  party  attempted  to  be  charged,  or,  in 
other  words,  on  the  faith  that  such  acts  and  conduct  were  in  fact  what  they 
assumed  to  be.  It  would  be  a  reproach  to  the  law,  if  a  man  could  be  per- 
mitted to  lie  by  and  see  another  act  to  his  injury,  upon  the  faith  of  his  con- 
duct, and  acts  which  he  knew  were  calculated  to  mislead  him,  and  then  turn 
round  and  say  that  he  did  not  intend  that  which  his  conduct  and  his  acts 
fairly  indicated.  No  instruction  upon  this  point  was  asked  or  given.  The 
jury  were  further  instructed  that  if  Daniel,  after  he  had  knowledge  that  his 
name  had  been  put  upon  the  note  in  suit,  as  a  maker,  ratified  and  adopted 
the  same,  he  would  be  bound  thereby,  although  his  name  was  originally  placed 
upon  said  note  without  authority.  The  soundness  of  this  instruction  is  not 
questioned.  The  words  ratified  and  adopted  as  contained  in  it,  seem  to  have 
been  used  as  synonymous,  and,  in  fact,  a  ratification  is  but  the  adoption  of 
an  act  purporting  to  be  the  act  of  the  party  adopting  it.  *  *  *  A  con- 
tract necessarily  implies,  in  its  making,  the  assent  of  the  parties  to  be  bound 
by  it,  and  such  assent  cannot  exist  in  fact  without  corresponding  intention. 
A  contract,  therefore,  cannot  exist  vrithout  the  intention  of  the  party,  either 
express  or  implied,  to  make  it.  It  is  not  his  contract  until  he  has  in  some  way 
intentionally  assented  to  it.  He  may,  however,  by  his  conduct,  as  we  have 
already  seen,  bind  himself  so  far  that  he  will  be  estopped  to  deny  the  validity 
of  the  contract.  So,  also,  in  the  case  of  a  subsequent  ratification  or  adoption 
of  a  contract,  made  in  his  name  without  authority,  such  ratification  or  adop- 
tion cannot  exist,  in  fact,  without  or  against  the  intention  of  the  party  to 
be  bound  by  it.  The  party,  however,  may,  by  his  conduct,  estop  himself  from 
denying  an  intention  to  ratify  or  adopt  it.  The  distinction  between  a  con- 
tract intentionally  assented  to,  or  ratified  in  fact,  and  an  estoppel  to  deny 
the  validity  of  the  contract,  is  very  wide.  In  the  former  case,  the  party  is 
bound,  because  he  intended  to  be;  in  the  latter,  he  is  bound  notwithstanding 
there  was  no  such  intention,  because  the  other  party  will  be  prejudiced  and 
defrauded  by  his  conduct,  unless  the  law  treat  him  as  legally  bound.  In  the 
one  case,  the  party  is  bound  because  this  contract  contains  the  necessary  In- 
gredients to  bind  him,  including  a  consideration.     In  the  other,  he  Is  not 


isV^^^/— 


Ch.  4)  CREATION  OF  THE  RELATION  77 

en  because  a  man's  own  act  or  acceptance  stoppeth  or  closeth  up  his 
mouth  to  allege  or  plead  the  truth."  However  much  this  definition 
may  have  been  criticised  as  vicious  (Evere^st  &  Strode  on  Estoppel,  9- 
16;  Bigelow  on  Estoppel,  5),  it  is  a  braef  statement  of  the  effect  of 
the  essential  principle  of  estoppel,  viz.i  "that,  \^henever  one  of  two 
innocent  persons  must  suffer  by  the  act  (yi.  a  third,\he  who  enables  such  •'  "^  -  <~^ — t 
third  person  to  occasion  the  loss  must  sustain  it."/  Lickbarrow  v.  Ma-  V 

son,  2  T.  R.  63 ;  1  Smith,  Leading  Cas.  759 ;  Ewart/on  Estoppel,  9. 
Ratification,  on  the  other  hand,  means  confirmation.  /"To  ratify  Ms  to 
give  sanction  and  validity  to  something  done  withoutUuthority."  )  Ev- 
ans, Principal  and  Agent  (Bedford's  Ed.)  90.  ;'The  underlying  princi- 
ple upon  which  liability  for  ratification  attaches  is  that  he  \Vho  has 
commanded  is  legally  responsible  for  the  direct  results  and  for  the  nat- 
ural and  probable  consequences  of  his  conduct,  and  that  it  is  immate- 
rial whether  that  command  was  given  before  or  after  the  conduct.  / 
I  The  substance  of  estoppel  is  the  inducement  to  another  to  act  to'nis 
p^iudice.  The  substance  of  ratification  is  confirmation  after  conduct. 
"This  is  enough,"  said  INIr.  Bigelow,  "to  indicate  that  there  may  be/ 
danger  in  using  the.  term  'estoppel'  freely.  It  is  common  enough  at 
present  to  speak  ni  acquiescence  and  ratification  as  an  estoppel.  Nei- 
ther the  one  nor/the  other,  however,  can  be  more  than  part  of  an  es- 
toppel, at  best.  I  An  estoppel  is  a  legal  consequence — a  right — arising 
from  acts  or  conduct,  while  acquiesceilce  and  ratification  are  but  facts 
presupposing  a  situation  incomplete  in  ^ts  legal  aspect,  i.  e.,  not  as  yet 
attended  with  full  legal  consequences.  '  The  most  that  acquiescence  or 
ratification  can  do — and  this  either  may  under  circumstances  do — is 
to  supply  an  element  necessary  to  the  estoppel,  and  otherwise  wanting, 
as,  e.  g.,  knowledge  of  the  facts  at  the  time  of  making  a  misrepresenta- 
tion. But  each  stands  upon  its  own  grounds,  and  must  be  made  out 
in  its  own  way,  not  necessarily  in  the  way  required  by  the  ordinary 
estoppel  by  conduct."  Bigelow  on  Estoppel  (5th  Ed.)  pp.  456,  457. 
And  see  Reinhart  on  Agency,  101. 

An  unauthorized  act  may  be  made  to  operate  by  ratification  as  an 
estoppel  upon  the  person  in  whose  behalf  it  was  done.  That  ratifica- 
tion presupposes  knowledge  on  the  part  of  such  person  ratifying.  If 
he  intentionally  ratify  what  another  has  done  for  him  without  author- 
ity, and  actually  or  constructively  knows  also  of  the  circumstances  con- 
nected with  the  unauthorized  acts  which  are  the  basis  of  the  estoppel, 
he  should  clearlv  be  held  bound  thereby.  See  Dimond  v.  Manheim,  61 
Minn.  171,  63  N.  W.  495. 

In  this  case  the  acceptance  of  the  check  given  to  plaintiff  by  his  wife 
.operated  to  ratify  the  receipt  signed  by  her  for  him.    In  the  eyes  of 

bound  for  these  reasons,  but  because  he  has  permitted  the  other  party  to 
act  to  his  prejudice  under  such  circumstances,  that  he  must  have  known,  or 
be  presumed  to  have  known,  that  such  party  was  acting  on  the  faith  of  his 
conduct  and  acts  being  what  they  purported  to  be,  without  apprising  him  to 
the  contrary." 


78  THE  RELATION  (Part  1 

the  law,  at  least,  he  knew  that  this  receipt  would  be  used  as  evidence 
of  the  payment  of  the  debt  by  the  contractor  to  whom  it  was  delivered. 
He  is  responsible  for  the  direct  results  and  the  natural  and  probable 
consequences  of  the  act  he  has  ratified.  His  situation  is  not  therefore 
different,  in  law,  from  that  of  other  creditors  who  signed  receipts  be- 
fore the  date  of  settlement,  and  who,  as  he  did  also,  accepted  and  now 
retain  the  check  of  the  contractor.  He  is  not  entitled  to  recover  be- 
cause of  his  ratification.     See  Ewart  on  Estoppel,  133,  137,  139. 

The  judgment  appealed  from  is  affirmed,  except  as  to  the  plaintiff, 
Steffens,  and  the  defendants  Delamater  &  Son.  As  to  them,  let  judg- 
ment be  entered  in  accordance  with  this  opinion. 


II.  The  Act  Ratified 
ALEXANDER  v.  WADE. 

(St.  Louis  Court  of  Appeals,  Missouri,  1904.     106  Mo.  App.  141,  SO  S.  W.  19.) 

Wade  offered  to  sell  to  Hays  and  Rodgers  his  stock  of  merchan- 
dise. The  latter  knew  there  was  a  debt  for  the  stock,  and  refused  to 
buy  unless  Wade  would  deposit  with  the  bank  $1,800  to  pay  his  com- 
mercial creditors.  To  this  Wade  consented,  and  a  deposit  of  $1,750 
and  some  duebills  was  made  as  the  "Chas.  Wade  Fund."  Out  of  this 
fund  the  bank  had  paid  all  but  $635.08  to  commercial  creditors  of 
Wade,  when  Alexander,  who  was  not  such  a  creditor,  commenced  suit 
by  attachment  against  Wade  and  had  the  bank  garnished.  The  bank 
alleged  that  it  had  no  interest  in  the  fund,  which  it  held  for  cred- 
itors, and  asked  to  be  protected  in  disbursing  it  according  to  the  agree- 
ment.    The  above  parties  interpleaded,  each  claiming  the  fund. 

Bland,  P.  J.^^  [After  passing  upon  some  minor  and  technical  mat- 
ters:] *  *  *  3_  fjie  arrangement  under  which  the  $1,750  were 
deposited  in  the  bank  by  Wade  is  out  of  the  ordinary.  The  deposit 
was  made  on  the  demand  of  Hays  and  Rodgers,  yet  neither  of  them 
knew  who  Wade  owed,  or  what  particular  firms  or  individuals  would 
be  benefited  by  the  deposit.  They  undertook  to  act  for  Wade's  com- 
mercial creditors  as  a  class — that  is,  for  the  creditors  to  whom  he 
was  indebted  for  the  goods  they  were  purchasing  from  him — and  not 
for  all  his  creditors,  nor  for  his  creditors  generally.  Their  primary 
motive  was,  perhaps,  to  avoid  any  imputation  of  fraud  to  themselves, 
in  having  made  the  purchase  of  the  goods  with  knowledge  that  Wade 
was  largely  indebted  for  their  purchase  price.  Whatever  may  have 
been  their  motive,  their  action  was  not  only  lawful,  but  commendable, 
and  the  contract  which  they  made  with  Wade  in  respect  to  the  deposit 
was  one  which  his  creditors  might  lawfully  have  made  with  him,  and. 

2  7  Part  of  the  opinion  is  omitted. 


Aley^nder  v#  W^de^ 
-cts: 

Wnde  offered  to  sell  H^ys  ^nd  Rodgers 
lis  stock  of  merchandise.   They,  knowing  there  waj 
-.   debt  for  the  stock,  refused  to  buy  unless  W'^de 
rOuld  deposit  with  a  b«nk  flSOO.oo  to  "o^y  his 
commercial  creditors.  T'^de  deposited  the  money, 
;he  money  going  under  an  acct.  called  "The  '.Ypde 
Kind".  Out  of  this  fund  a  greater  psrt  of  the 
ftoney  was  paid  to  the  commercial  creditors  by  the 
)ank,  when  Alexander,  who  w«s  not  «  creditor  of 
;his  kind,  commenced  suit  by  attachment  «g°inst 
i^ede  end  had  the  b«nk  garnished.  B^nk  alleged 
ihf't  it  had  no  interest  in  the  fund,  which  it 
leld  frr  creditors,  «^nd  ^sked  to  be  protected  in 
lisbursing  it  according  to  the  agreement.  Above 
parties  interpleaded,  each  claiming  the  fund. 
)urt : 

Neither  Hays- nor  Rodgers  knew  who  Tade's 
jreditors  were;  they  undertook  to  act  for  them  as 
3,  cl^ss,  only  those  who  had  claims  against  the 
nerch^ndise  they  expected  to  buy,  not  all  gener- 
illy.  This  *^ct  on  the  pprt  of  E^ys  and  Rodgers 
In  m«kin^  contract  with  ">de  w«s  lawful,  «nd 
50uld  hrve  been  done  by  the  creditors  themselves. 
Tence  they  nn'^y  "Afterwards  ratify  it  ,  tho  they 
?pve  no  rn.tho'rity  to  m^-ke  it,  "By  the  dinterple^, 
t'-e  creditorF  h'^ve  r«=tified  the  contract  m?de  by 
5p"S  '^nd  Rodrers,  and  it  will  operate  the  s^me 
PS  if  they  hipd  been  authorized  in  the  first  pl'^ce, 

JUDG^'TT  FOR  INTERPLEADERS  APFXRI^D. 


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&«39XX«    ..^,   .     .58xi8xfi:t«3  >Inf^cf  ed^   bsd  bn^ 
iX  rioxrfw  ^baiil   sri^  ni   ;taei6-Jr£i   on  bBd  ii 
fix  feettoe^oiq  ©a'V>;)-  be^fa^   5a^   ,ato;txf>©io  i«^ 
©vocfA   ^^nemeet-gB  ed^   ou   ^nxbiooo.B  ^x  -gntsii 
mbms^   Bdi  -Qalmx^lo  do^^e   ^bebBelqie-inl   ae. 

a'eb^'   orfw  weicf  8193DQH  ion  ^^^H  i»rf;tx©^l 
a>B  merfit   to^   ioB  0^  sCoo^Tsbnxr  ^srfj    :  e^ew  8to^. 
^x^cr   :Jg:  "  -     '     ^   orfw  ©aorfa  -^Ifio   ,s 

-•x©xx©3  I.L      .....   ^  ..„ .  jacfoecnc©  ^j;©rf;t  ©ax5n  . 

B-xa^&oH   fen.e  a-^«E  1:o   ^T=^q  ©cf:t   xio   ^o«  slrfT   , 
Bn?^   ^Xi/tw'^I   3«^??  ©fj-5'^  xf;tjcw  ;to^iifr!00  -mill' 
.3evle3in©/f;}    s'lOiJlEeio   ft.nJ-    rcf   enob  n©©rf   ev^rf  | 
-9rf;t   orf^    ,    ^x  v'5tx:t^i   35T.«wi©;?^a  v«ir  v.®-^^   < 
,  ■' "^ ''     ' "  ^     '    ©rf^   \;F    .S'x    ©:>f«fn   o;}    v^it/icrfi.rM   on 
\d  'litnoo   ©rf;t    beiliy^^i   e^Bd  ^loiiibBti 

©ffl^-a   ©riit   &^.^ie<70  IIlw  :fx    &nB    ,8i©-q6o^  bn'* 
©oal-T  D^3il'±   ©rfj-  n.f    bdsxxoffd'irB  fie©n    b^rf  \:©d';t  " 


Ch.  4)  CREATION  OF  THE  RELATION  70 

therefore  might  ratify  after  it  was  made,  although  Hays  and  Rodgers 
had  no  authority  from  the  creditors  to  make  it. 

As  is  said  by  Mechem  on  Agency,  at  section  112:  "It  is  therefore 
the  general  rule  that  one  may  ratify  the  previous  unauthorized  doing 
by  another  in  his  behalf  of  any  act  which  he  mightx^hen  and  could 
still  lawfully  do  himself,  and  which  he  mJght  then  and  could  still  law- 
fully delegate  to  such  other  to  be  done."  'In  Suddarth  v.  Lime  Com- 
pany, 79  Mo.  App.  592,  it  was  held  that,  if  A.  had  no  authority  to 
contract  for  B.,  yet  if  B.  ascertained  that  he  had  so  contracted,  and 
ratified  the  act,  he  was  bound  by  the  contract.  In  McCracken  v.  City 
of  San  Francisco,  16  Cal.  591,  Field,  C.  J.,  said:  "To  ratify  is  to  give 
validity  to  the  act  of  another.  A  ratification  is  equivalent  to  previous 
authority.  It  operates  upon  the  act  ratified  in  the  same  manner  as 
though  the  authority  had  been  originally  given."  See,  also,  Ruggles 
v.  County  of  Washington,  3  Mo.  497;  Summerville  v.  Railroad,  62 
Mo.  391 ;  Hartman  v.  Hornsby,  142  Mo.  368,  44  S.  W.  242 ;  Bank  v. 
Hughlett,  84  Mo.  App.  268. 

The  creditors  for  whose  benefit  the  deposit  was  made,  being  pos- 
sessed with  the  power  to  make  the  contract  themselves  in  their  own 
behalf,^*  might  thereafter  ratify  the  contract  made  by  Hays  and  Rodg- 
ers, although  the  latter  were  without  authori^,,  to  act  as  their  agents, 
and  the  ratification  would  operate  upon  the  deposit  as  though  Hays 
and  Rodgers  had  authority,  as  agents  of  the  creditors,  to  contract  for 
the  deposit  for  the  purpose  for  which  it  was  made.  It  is  admitted 
that  the  interpleaders  are  commercial  creditors  of  Wade,  and  hence 
are  creditors  for  whose  benefit  the  deposit  was  made.  By  their  in- 
terplea  they  have  ratified  the  act  of  Hays  and  Rodgers,  and  occupy 
the  same  situation  in  respect  to  the  deposit  as  if  it  had  been  made  for 
their  benefit  under  a  contract  with  their  authorized  agent  or  with 
themselves,  and,  being  for  their  benefit,  ratification  will  be  pre- 
sumed. Kingman  &  Co.  v.  Cornell-Tebbetts  Co.,  150  Mo.  282,  51  S. 
W.  727.     *     *     * 

Judgment  for  interpleaders  affirmed. 


MEMPHIS  &  C.  R.  CO.  v.  SCRUGGS. 

(Supreme  Court  of  Mississippi,  1874.    50  Miss.  284.) 

Appeal  from  a  decree  of  specific  performance  of  an  award.  One 
J.  W.  Scruggs  made  a  contract  with  appellant  company  to  erect  a 
hotel  and  eating  house  on  the  right  of  way.  He  later  sold  this  to  liis 
wife.     Under  the  terms  of  the  contract  the  parties  later  desired  to 

28  In  Shepardson  v.  Gillette,  133  Ind.  125,  31  N.  E.  788  (1S93),  it  was  lield 
that  a  Ijoard  of  school  trustees  could  not  ratify  a  tax  levy  by  the  trustees 
of  the  civil  town,  because  the  act  was  not  one  which  originally  the  school 
trustees  possessed  the  power  to  do.  See,  also,  McCrackcu  v.  Sun  Francisco, 
16  Cal.  591  (18G0),  per  Field,  J. 


80  THE  RELATION  (Parti 

terminate  the  relations,  and  submitted  to  arbitrators  the  amount  the 
company  should  pay.    They  awarded  $31,666.66. 

Paton,  C.  J. 2^  [After  holding  that  an  award  by  arbitrators  was 
binding:]  *  *  *  It  is  contended  by  counsel  for  appellants  that 
M.  J.  Wicks,  the  president  of  the  Memphis  and  Charleston  Railroad 
Company,  had  no  authority  to  enter  into  the  submission  on  behalf 
of  said  company.  We  think  the  resolution  passed  by  the  board  of 
directors  of  the  company  on  the  25th  day  of  January,  1871,  conferred 
the  authority  upon  the  president  to  submit  to  arbitration  as  a  mode 
of  ascertaining  the  value  of  the  property  by  disinterested  parties,  as 
provided  in  the  original  contract.  On  that  day  the  minutes  of  tfie 
board  of  directors  show  "it  was  resolved  that  the  president  is  hereby 
authorized  to  receive  the  hotel  at  valuation  as  provided  for  by  said 
contract."  The  appellants  being  a  corporation  aggregate,  a  mere  ar- 
tificial being,  could  act  only  through  the  instrumentality  of  an  agent 
or  attorney.  A  power  to  "agree  with  the  proprietor"  of  land  for  the 
purchase  was  held  to  authorize  an  agreement  to  pay  such  sum  as  ar- 
bitrators should  award.  Alexandria  Canal  Company  v.  Swann,  5 
How.  (U.  S.)  83  [12  L.  Ed.  60].  So  we  think  the  authority  confer- 
red by  the  board  of  directors  upon  the  president  to  receive  the  hotel 
at  the  valuation  of  disinterested  parties,  clothed  him  with  the  power 
to  refer  to  arbitration.  And  the  appearance  of  the  appellees  before 
the  arbitrators,  by  their  agents  and  counsel  without  objection  to  the 
reference,  amounts  to  a  ratification  of  the  act  of  the  agent,  and  estops 
them  from  /making  any  objection  to  the  submission  after  the  award 
was  made.  Where  the  principal,  upon  a  full  knowledge  of  all  the 
circumstances  of  the  case,  deliberately  ratifies  the  acts,  doings  or  omis- 
sions of  his  agent,  he  will  be\bound  thereby  as  fully,  to  all  intents 
and  purposes,  as  if  he  had  originally  given  him  direct  authority  in  the 
premises,  to  the  extent  which  sVich  acts,  doings  or  omissions  reach. 
Story  on  Agency,  283,  §  239. 

At  common  law,  however,  th^e  is  a  distinction  between  the  ratifi- 
cation of  acts  which  are  void  a/id  the  ratification  of  those  which  are 
voidable.  In  the  former  case^'the  ratification  is  inoperative  for  any 
purpose  whatever ;  in  the  la;^r,  full  validity  is  given  to  the  acts.  Acts 
which  are  illegal,  immoral  or  against  public  policy  fall  within  the  for- 
mer class.  For,  in  such  cases,  the  original  contracts  or  acts  being  void, 
ought  not  to  be  allowed  to  acquire  any  validity  from  their  being  sub- 
sequently confirmed;  since  the  same  noxious  qualities  adhere  to  the 
ratification  as  existed  in  the  original  transaction.  But  whatever  may 
be  the  force  of  this  distinction  in  the  former  class  of  cases,  properly 
understood,  it  is  not  applicable  to  cases  of  agency,  where  a  party  as- 
sumes to  act,  not  for  himself  but  for  another,  without  any  authority 
whatsoever,  or  by  an  excess  of  the  authority  delegated  to  him,  in  cases 
where  the  principal  may  lawfully  do  the  act.    In  all  such  cases,  if  the 

29  Part  of  the  opinion  is  omitted. 


Memr>^  i  s  ^:  C.R.  Co.  v.  !^cruggs . 
F«cts : 

A-nrje^^l  from  ^  decree  of  s-oecific  per- 
form'^nce  of  ^n   ^w^^^rd.  Scrupgs  m^de  ^-    contract 
TTith  r^Toell'^nt  Co.  to  erect  b   hotel  on  the 
riprht  of  w^y.  L«^ter  sold  s?=ine  to  wife.  Under 
t^e  terms  of  the  contract  the  n^rties  l^ter 
desired  to  termi.n'^te  the  contr-ct,  «nd  suhmitt- 
ed  to  '^srhitr^tors  the  amount  the  Co.  should  pay* 
3urt : 

AD-oellants  contend  thPt  Wicks,  presid- 
|nt  of  the  Ro"d,  had  no  authority  to  enter  into 
the  submission  on  hehr'^.lf  of  the  Co.  However,  the 
ninutes  of  the  director's  meeting  show  th«.t  the 
president  w^s  authorized  to  submit  to  arbitrat- 
ion as  a  mode  of  ascertaining  the  v^lue  of  the 
proioerty  by  disinterested  parties,  ps   iDrovided 
by  the  original  contract.  Since  p..   corpor^^'tion  c^n 
act  only  thru  an  agt.,   and  the  appearance  of 
bheir  agents  and  counsel  before   the  arbitrators 
i7ithout  objection  to  the  reference,  amounts  to 
bhe  ratification  of  the  acts  of  the  agt.  ,  and 
3Stops  them  from  maJcing  any  object  ion"  to  the 
submission  after  the  award  was  made.  Ratification 
nay  be  accomplished  as  well  by  acts  as  by  express 
confirmation,  altho  the  agt.  acted  in  excess  of 
lis  authority. 

VERDICT  FOR  PTPS. 


erf*   ,i«^«'°^-/,^nx*9eB  «  "^o-  °!^iL  spw  inef - 


Ch.  4)  CREATION    OF    THE    RELATION  81 

principal  subsequently  ratifies  the  act,  he  is  bound  by  it,  whether  it 
be  for  his  detriment  or  for  his  advantage.     And  a  ratification  once  \ 

deliberately  made,  with  full  knowledge   of   all   the  material  circum- 
stances, cannot  be  recalled.    Story  on  Agency,  §  242. 

As  the  corporation  may  lawfully  be  a  party  to  a  submission  to  ar- 
bitration, and  as  this  can  be  effected  only  through  an  agent,  it  follows 
that  the  submission  of  the  agent,  although  it  may  be  in  excess  of  au- 
thority, may  be  ratified  by  the  corporation,  as  well  by  its  acts  as  by 
express  confirmation.  And  this  we  think  was  done  by  its  appearance 
before  the  arbitrators  by  its  agent  and  attorney,  without  objection  to 
the  authority  of  the  arbitrators.  This  conduct  and  act  on  the  part  j 
of  the  railroad  company  was  a  recognition  of  the  authority  of  the  / 
arbitrators,  and  amounted  to  a  ratification  thereof.^"     *     *     * 

Decree  affirmed. 


HENRY  CHRISTIAN  BUILDING  &  LOAN  ASS'N  v.  WALTON. 

(Supreme  Court  of  Pennsylvania,  1897.     181   Pa.   201,   37  Atl.  261,  59   Am. 

St.  Rep.  636.) 

Scire  facias  sur  mortgage.  Appeal  from  judgment  for  defendant. 
Plaintiff  was  attempting  to  collect  a  balance  due  on  a  $1,000  mort- 
gage. Defendant  denied  having  signed  it,  and  the  jury  found  his 
signature  was  a  forgery. 

Fell,  J.  The  distinction  between  the  power  to  ratify  acts  void  be- 
cause of  a  fraud  affecting  individual  interests  only  and  the  power  to 
ratify  acts  which  involve  a  public  wrong  has  been  carefully  defined 
and  preserved  in  our  decisions.  The  right  to  avoid  a  contract  on 
the  ground  of  fraud  is  a  privilege  given  to  the  injured  party  for  his 
own  protection,  and  it  may  be  waived;  but  he  cannot  give  validity 
to  an  illegal  contract.  The  earlier  cases  which  held  that  all  contracts 
vitiated  by  fraud  are  insusceptible  of  confirmation,  are,  in  effect,  over- 
ruled by  Pearsoll  v.  Chapin,  44  Pa.  9,  and  Negley  v.  Lindsay,  6J  Pa. 
217,  5  Am.  Rep.  427.  The  distinction  between  the  cases  pointed  out 
in  the  opinions  in  Shisler  v.  Vandike,  92  Pa.  447,  37  Am.  Rep.  702, 
and  Lyon  v.  Phillips,  106  Pa.  57,  is  this : 

Where  the  transaction  is  contrary  to  good  faith,  and  the  fraud  af- 
fects individual  interests  only,  ratification  is  allowed;  but  where  the 
fraud  is  of  such  a  character  as  to  involve  a  crime  the  adjustment  of 
which  is  forbidden  by  public  policy,  the  ratification  of  the  act  from 
which  it  springs  is  not  permitted.  Forgery  does  not  admit  of  ratifi- 
cation. /A  forger  does  not  act  on  behalf  of,  nor  profess  to  represent, 
the  person  whose  handwriting  he  counterfeits;    and  the  subsequent 

30  See,  also,  Daughters  of  American  Revolution  v.  Schenley,  204  Pa.  572, 
54  Atl.  366  (1903);  Rawlings  v.  Neal,  126  N.  C.  271,  35  S.  E.  597  (1900); 
Boutelle  v.  Melendy,  19  N.  H.  196,  49  Am.  Dec.  152  (1848). 


G0DD.PK.&  A.— 6 


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Ij  J  '/,  iiju<  iNu/y^  (Un^- 


82    /  THE  RELATION  (Part  1 

adoption  of  the  instrument  cannot  supply  the  authority  which  the 
forger  did  not  profess  to  have.  "A  forged  bond  or  note  obviously 
wants  the  essentials  of  a  contKact,  because  the  intention  is  not  to  bring 
the  minds  of  the  obligor  and  Obligee  together,  but  to  practice  a  fraud 
on  both."    Hare,  Cont.  p.  285.  j 

All  of  the  assignments  of  ^rror  which  were  insisted  upon  at  the 
argument  relate  to  the  instruction  given  to  the  jury  that,  if  the  mort- 
gage upon  which  the  action  was  founded  was  a  forgery,  there  could  be 
no  ratification  of  it,  and  thaft  no  act  of  the  defendant  thereafter  could 
make  it  binding  upon  him.  There  can  be  no  doubt  of  the  correctness 
of  the  first  part  of  this  instruction,  and,  in  view  of  the  evidence,  the 
whole  of  the  instruction  was  free  from  error.  Magee,  who  committed 
the  fraud,  was  the  accredited  agent  of  the  building  association,  and 
represented  it  in  the  preparation  of  the  mortgage.  He  may  have  rep- 
resented the  defendant  in  other  matters,  but  there  was  not  the  slightest 
evidence  of  his  agency  for  the  purpose  of  executing  the  mortgage. 
Nor  was  there  evidence  of  any  act  of  the  defendant  upon  which  to 
base  an  equitable  estoppel. 

The  attempt  to  bring  the  case  within  the  principle  of  the  decision 
in  Garrett  v.  Gonter,  42  Pa.  143,  that  a  deed  or  contract  executed 
by  a  professed  agent,  acting  under  a  pretended  authority,  may  be 
confirmed,  failed  for  want  of  proof.     The  judgment  is  affirmed. 


WILSON  V.  HAYES. 

(Supreme  Court  of  Minnesota,  1889.    40  Minn.  531,  42  N.  W.  467,  4  L.  R.  A. 
196,  12  Am.  St.  Rep.  754.) 

Action  by  Wilson  to  enforce  his  right  of  redemption.  The  owner 
of  the  property,  Douglas,  had  given  to  Wilson  a  note  for  $5,000,  se- 
cured by  mortgage,  which  note  Wilson  had  negotiated  and  later  repur- 
chased. A  prior  mortgage  had  been  foreclosed,  and  the  certificate 
of  sale  assigned  to  Hayes.  Wilson  now  claimed  the  right  to  redeem 
as  mortgagee  of  the  subsequent  mortgage.  It  appeared  that  Wilson 
had  altered  the  note  given  him  by  Douglas  by  erasing  the  word  "an- 
nually," and  inserting  the  word  "quarterly,"  so  as  to  make  the  inter- 
est payable  quarterly,  instead  of  annually. 

Mitchell,  J.^^  [After  disposing  of  other  defenses  in  plaintiff's 
favor,  and  ordering  a  new  trial  for  errors  in  the  instructions  of  the 
court  below:]  *  *  *  With  reference  to  a  new  trial,  it  becomes 
proper  to  consider  the  effect  of  Douglas'  so-called  ratification  of  the 
alleged  alteration.  The  court  found  that  upon  the  discovery  of  it  he 
denounced  the  alteration  as  fraudulent  and  unauthorized,  and  did  not 
acquiesce  therein.  This  is  not  justified  by  the  evidence.  While  it  ap- 
pears that,  upon  being  shown  the  note  by  the  bank, — then  the  holder, 
— he  asserted  that  it  had  been  altered  since  he  delivered  it ;  yet,  so  far 

31  Part  of  the  opinion  is  omitted. 


Ccct'C/^ 


7 


CREATION  OF  THE  RELATION 


83 


Ch.  4) 

from  repudiating  it,  according  to  his  own  admissions,  he  repeatedly 
paid  interest  on  it,  voluntarily  and  without  objection.     If  the  altera- 
tion was  capable  of  ratification,  this  would,  according  to  all  the  au- 
thorities amount  to  a  ratification  or  adoption,  whichever  it  may  be 
called,    'if  the  alteration  was  a  mere  spoliation  by  a  third  party,  or 
if  made  by  the  holder  by  mistake  or  accident  or  innocently,  and  with- 
out fraudulent  intent,  so  that  it  did  not  destroy  the  note,  or  at  least 
did  not  extinguish  the  debt,  of  which  it  was  the  evidence,  it  would  not 
invalidate  or  affect  the  mortgage,  which  can  only  be  discharged  by 
the  payment  or  extinction  of  the  debt  secured  by  it.     In  such  case 
the  question  of  ratification  would  be  wholly  immaterial.     But  suppose 
the  alteration  was  fraudulently  made,  amounting  in  law  to  a  forgery. 
The  question  remains,  could  this  be  subsequently  ratified  by  Douglas 
so  as  to  make  the  note  in  its  altered  form  his  contract? 
;    The  question  whether  a  forgery  is  capable  of  being  ratified,  so  as 
/to  create  a  liability  on  the  forged  instrument,  in  the  absence  of  cir- 
cumstances constituting  an  estoppel  in  pais,  is  one  upon  which  there 
i^almost  as  much  conflict  of  authorities  as  upon  that  of  burden  of 
proof  and  presumption,  already  considered.     Some  of  the  cases  hold- 
ing the  negative  of  the  question  place  the  doctrine  upon  grounds  of 
public  policy;    others,  upon  the  ground  that  ratification  involves  the 
relation  of  agency,  and  that  ratification  can  only  be  effectual  when 
the  act  is  done  by  the  agent  avowedly  for  or  on  account  of  the  prin- 
cipal;   that  the  very  nature  of  ratification  presupposes  the  act  done 
for  another,  but  without  competent  authority,   and  hence   can  have 
no  application  to  a  forgery,  for  a  forger  never  acts  or  assumes  to  act 
for  another ;    others  put  it  upon  the  ground  that,  in  the  absence  of 
any  new  consideration,  the  ratification  or  adoption  of  the  forged  in- 
strument would  be  a  mere  nudum  pactum. 

The  cases  holding  a  forgery  capable  of  ratification  take  the  ground 
that,  so  far  as  considerations  of  public  policy  are  concerned,  the  rat- 
ification of  forgeries  should  stand  on  the  same  footing  as  that  of  other 
contracts,  and  should  be  held  valid,  unless  made  in  consideration  of 
compounding  the  felony,  or  for  some  other  illegal  consideration ;  that 
as  to  the  want  of  authority  it  can  make  no  dift'erence  whether  the 
unauthorized  act  was  or  was  not  a  forgery;  that  this  want  of  au- 
thority is  the  very/thing  which  the  ratification  cures,  and  to  which  the 
maxim  applies,  '/Omnis  ratihabitio  retrotrahitur  et  mandato  priori 
sequiparatur ;"  thkt  the  ratification  is  "dragged  back  and  made  equiv- 
alent to  a  prior  command" ;  that  a  ratification  is  not  a  contract,  but 
an  adoption  of  one  previouslyliaade  in  the  name  of  the  ratifying  party, 
•  and  requires  no  consideration.  jSee  Brook  v.  Hook,  6  L.  R.  Exch.  98; 
McHugh  V.  Schuylkill  County,,  67  Pa.  391,  5  Am.  Rep.  445 ;  Shisler 
V.  Vandike,  92  Pa.  447,  37  Am.  Rep.  702 ;  Owsley  v.  Philips,  78  Ky. 
517,  39  Am.  Rep.  258;  Ferry  v.  Taylor,  33  Mo.  334;  Workman  v. 
Wright,  33  Ohio  St.  405,  31  Am.  Rep.  546;    Bank  v.  Crafts,  4  Allen, 

A 


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84  THE  RELATION  (Part  1 

447;    Wellington  v.  Jackson,  121  Mass.  157;    Hefner  v.  Vandolah, 
62  111.  483,  14  Am.  Rep.  106;   Forsyth  v.  Day,  46  Me.  176. 

In  the  large  majority  of  the  cases  usually  citec'  in  support  of  the 
proposition  that  a  forgery  can  be  ratified,  it  will  ue  found  that  the 
question  was  presented  in  connection  with  circumstances  creating  an 
estoppel,  or  that  there  was  in  fact  no  fraudulent  making  or  altering, 
hut  merely  a  lack  of  sufficient  authority;  and  hence  such  cases  are 
not  in  point.  Where  the  ratification  is  made  to  a  third  party, — the 
holder  of  the  instrument,  who  was  not  a  party  to  the  forgery, — we 
are  not  called  upon  to  decide  whether  or  not  such  ratification  would 
create  a  valid  liability  on  the  instrument.  All  the  authorities  cited 
by  appellant  to  the  effect  that  a  forgery  may  be  ratified  are  of  this 
class. ^^  But  we  have  found  no  case  where  it  has  been  held  that  a 
forged  instrument  can  be  ratified  so  as  to  give  the  forger  himself  a 
right  of  action  upon  it.  It  is  legally  impossible  in  such  a  case  that  the 
relation  of  principal  and  agent  could  exist  between  the  parties,  for 
one  man  cannot  be  the  agent  of  another  to  make  a  contract  with  him- 
self. Hence  it  would  seem  that  the  doctrine  of  ratification  can  have 
no  application  to  such  a  case. 

If  the  entire  instrument  was  a  forgery,  in  the  popular  sense,  it 
would  require  no  argument  to  prove  that  a  mere  assent  to  or  ratifi- 
cation of  it  in  the  hands  of  the  forger  would  be  a  mere  nudum  pac- 
tum. But  in  law  there  is  no  distinction  between  a  forgery  in  making 
and  a  forgery  by  altering.  The  altered  instrument  is  not  the  contract 
of  the  maker,  and  in  legal  contemplation  is  as  entirely  a  forgery  as 
the  other.  If  the  alteration  was  not  fraudulent,  so  that  it  did  not  de- 
stroy the  instrument,  or  at  least  did  not  extinguish  the  debt,  we  can  see 
how  a  subsequent  assent  to  it  would  create  a  liability  on  the  instru- 
ment as  altered.  Parties  can  alter  their  contract  by  mutual  consent, 
and  this  requires  no  new  consideration,  for  it  is  merely  the  substitu- 
tion of  a  new  contract  for  the  old  one,  and  this  is  of  itself  a  suffi- 
cient consideration  for  the  new.  /And  what  a  party  may  assent  to 
when  done  he  may  assent  to  afterwards,  so  as  to  bind  himself,  if  there 
be  a  consideration  to  support  it.  But  where  there  has  been  a  fraud- 
ulent alteration  of  a  written  contract,  which  not  only  destroys  the 
instrument  but  extinguishes  the  debt,  it  seems  to  us  clear  on  principle 
that  a  subsequent  assent  to  the  alteration,  given  to  the  party  who  made 

\"'  _.   32  That  a  forgery  may  be  ratified,  see  Greenfield  Bank  v.  Crafts,  4  Allen, 
\       447  (1862).    But  the  cases  all  agree  that  a  ratification  Is  not  effective  if  made 
\      upon  the  consideration  that  the  forger  shall  not  be  criminally  prosecuted. 
1      Brook  V.  Hook,  L.  R.  6  Exch.  89,  40  L.  J.  Exch.  50,  24  L.  T.  Rep.  N.  S.  34, 
I      19  W.  R.  506  (1871).     It  has  been  doubted  whether  there  can  really  be  any 
I      other  consideration  that  would  lead  one  to  assume  an  obligation  on  a  note  to 
'      which  his  name  was  forged.     Henry  v.  Heeb,  114  Ind.  275,  16  N.  E.  606,  5 
Am.  St.  Rep.  613  (1888).    Contra :    Greenfield  Bank  v.  Crafts,  supra ;    Hefner 
V.  Vandolah,  62  111.  483,  14  Am.  Rep.  106  (1872).     It  is  also  well  settled  that 
the  maker  or  indorser  of  the  forged  instrument  will  be  liable  when  the  ele- 
ments of  estoppel  are  present.     Hefner  v.  Vandolah,  57  111.  520,  11  Am.  Rep. 
39  (1871);    Workman   v.  Wright,  33  Ohio    St.  405,  31  Am.  Rep.  546  (1878), 
and  other  cases  cited  supra. 


Ch.4) 


CREATION  OF  THE  RELATION 


85 


it,  without  any  new  consideration,  is,  in  any  view  of  the  case,  a  mere 
naked  promise.  McHugh  v.  Schuylkill  Co.,  supra;  Workman  v. 
Wright,  supra;    Owsley  v.  Philips,  supra.     Order  reversed. 


III.  The  Essentials  of  Ratification 
(A)  Agent  Act  As  Agent 
WII,SON  V.  TUMMAN. 

(Court  of  Common  Pleas,  1S43.    1  Dowl.  &  L.  513,  12  L.  J.  C.  P.,  306,  6  Man. 
&  G.  23G.  6  Scott,  N.  R.  894,  46  E.  C.  L.  235.) 

Trespass  de  bonis  asportatis.    Plea,  not  guilty. 

TiNDAL,  C.  J.  This  case  comes  before  us,  on  the  rule  obtained  by 
the  plaintiffs,  to  enter  a  verdict  for  them  against  the  defendant  Tum- 
mon,  for  the  sum  of  £2.  16s.  6d.  if  the  court  should  think  that  the 
subsequent  ratification  made  him  liable  as  a  trespasser  for  the  original 
seizure.  The  seizure  of  the  plaintiff's  goods  was  made  by  an  officer 
of  some  court,  without  any  previous  authority  from  Tummon,  who  ap- 
peared on  the  trial  to  be  the  plaintiff  in  some  other  suit,  the  precise  na- 
ture of  which  did  not  transpire,  but  who  was  found  by  the  jury  not  to 
have  given  any  precedent  authority  to  take  the  goods  of  the  plaintiffs, 
but  to  have  ratified  the  taking  after  it  was  made.  The  question,  there- 
fore, is  a  dry  question  of  law,  whether  the  subsequent  ratification  by 
the  defendant  Tummon  of  the  seizure  under  such  circumstances,  is 
the  same  in  its  consequences  as  a  precedent  command  given  by  him ; 
and  we  think  upon  the  authorities  and  upon  the  reason  of  the  thing  it- 
self, that  it  is  not.  That  an  act  done  for  another  by  a  person  not  as- 
suming to  act  for  himself,  but  for  such  other  person,  though  without 
any  previous  authority,  would,  indeed,  become  the  act  of  the  principal, 
if  subsequently  ratified  by  him,  is  the  known  and  well  established  rule 
of  law.  In  that  case,  the  principal  is  bound  by  the  act,  whether  it  be 
for  his  detriment  or  advantage,  or  whether  it  be  founded  on  a  tort  or 
a  contract,  if  it  be  done  by  his  previous  authority. 

There  was  this  precise  distinction  taken  in  the  Year  Book,  7  Hen. 
4,  pi.  35,  "that  if  the  bailiff  take  a  heriot,  claiming  property  in  it  for 
himself,  the  subsequent  agreement  of  the  lord  would  not  entitle  him 
to  be  considered  as  the  lord's  bailiff  at  the  time.  But  if  he  took  it  at 
the  time  as  bailiff  of  the  lord,  and  not  for  himself;  although  he  did 
so  without  any  command  of  the  lord;  yet  the  subsequent  ratification 
by  the  lord  would  make  him  bailiff  at  the  time."  The  same  distinc- 
tion is  laid  down  by  Anderson,  C.  J.,  in  Godbolt's  Reports,  189.  "If 
one  have  cause  to  distrain  my  goods,  and  a  stranger,  of  his  own 
wrong,  without  any  warrant  or  authority  given  him  by  the  other,  take 
my  goods ;  not  as  bailiff  or  servant  of  the  other,  and  I  bring  an  action 


y 


alaJ- 


'kl<f^4j(^ 


ctt  J 


l^Ll 


/ 


86  THE  RELATION  (Parti 

of  trespass  against  him,  can  he  excuse  himself  by  saying  he  did  it  as 
bailiff  or  servant?  Can  he  so  father  his  misdemeanor  on  another? 
He  cannot,"  &c. 

In  the  present  case,  the  sheriff's  officers,  who  were  the  original  tres- 
passers by  taking  the  goods  of  the  plaintiffs,  were  not  the  servants  or 
agents  of  the  defendant  Tummon,  but  the  agents  of  a  public  officer  or 
minister,  obeying  the  mandate  of  a  court  of  justice.  They  did  not  as- 
sume to  act  at  the  time  as  agents  or  bailiffs  of  the  then  plaintiff,  Tum- 
mon, but  as  the  servants  of  another,  namely,  the  sheriff,  by  executing 
the  process  directed  to  him  by  the  court,  and  this  forms  the  distinction 
between  the  present  case  and  that  of  Parsons  v.  Loyd,  which  was  re- 
lied on  in  the  course  of  the  argument.  In  the  present  case,  the  sheriff, 
or  the  sheriff's  officers,  seized  under  a  valid  process,  but  in  Parsons  v. 
Loyd  the  sheriff  had  acted,  not  under  the  authority  of  the  court,  but 
under  the  direction  of  the  plaintiff  in  the  original  action,  who,  by  su- 
ing out  a  void  process,  was  in  the  same  situation  as  if  merely  he  had 
really  directed  the  sheriff  or  his  officers  to  make  the  arrest ;  and,  on 
the  latter  supposition  where  a  ca.  sa.  or  a  fi.  fa.  has  been  set  aside  for 
irregularity  it  becomes  a  nullity,  and  no  doubt  the  sheriff  acts  as  the 
servant,  and  by  the  command  of  the  plaintiff,  who  sued  it  out,  and 
who  is  consequently  liable  as  principal  for  the  act  of  his  agent.  If  the 
defendant  Tummon  had  directed  the  sheriff  to  take  the  goods  of  the 
present  plaintiffs,  under  a  valid  writ  requiring  him  to  take  the  goods 
of  another  person,  the  previous  direction  would  undoubtedly  have 
made  him  a  trespasser,  on  the  principle  that  all  who  procure  a  tres- 
pass to  be  done,  are  trespassers  themselves ;  the  sheriff  would  be  sup- 
posed not  to  have  taken  the  goods  merely  under  the  authority  of  the 
writ,  but  as  the  servant  of  the  plaintiff.  But  where  the  sheriff,  acting 
under  a  valid  writ,  has  seized  the  wrong  person's  goods,  a  subsequent 
declaration  of  the  plaintiff  in  the  action,  ratifying  and  approving  the 
taking,  cannot  alter  the  character  of  the  original  taking,  and  make  it 
a  wrongful  taking  by  the  plaintiff. 

We  think,  therefore,  that  the  defendant  Tummon  is  not  shewn  to  be 
a  trespasser,  and  that  the  rule  must  be  discharged. 

Rule  discharged. 


WYCKOFF,  SEAMAN  &  BENEDICT  v.  DAVIS  et  al. 

(Supreme  Court  of  Iowa,  1905.     127  Iowa,  399,  103  N.  W.  349.) 

Replevin  to  recover  two  typewriters.  From  a  judgment  for  the  de- 
fendant, plaintiff  appeals. 

DeEmer,  J.  One  Dahlberg  was  plaintiff's  agent  at  the  city  of  Ot- 
tumwa  for  the  sale  of  Remington  typewriters.  Defendants  Davis  and 
Rush  were  running  a  gambling  house  in  Ottumwa,  and  Dahlberg  was 
a  frequenter  of  their  establishment.  In  this  gambling  den  he,  Dahl- 
berg, lost  several  hundred  dollars  of  his  employers'  money.     Dahlberg 


Ch.  4)  ^EATION    OF    THE    RELATION  ^jt  Jj  J  ^^ 

had  authority  to  sell  and  deliver  typewriters  in  his  particular  locality, 
which  included  the  city  of  Ottumwa,  and  to  collect  the  purchase  price 
therefor,  and  also  to  collect  plaintiff's  accounts  in  general  within  the 
territory  allotted  to  him.  In  September  of  the  year  1902,  Dahlberg 
was  short  in  his  accounts  with  his  employers  to  the  extent  of  nearly 
$800.  During  this  month  he  sent  two  checks  to  his  principal  purport- 
ing to  represent  some  collections  made  by  him.  These  checks  were 
drawn  on  an  Ottumwa  bank,  and,  when  returned,  were  dishonored  by 
that  bank.  Plaintiff,  through  its  other  agents,  was  demanding  a  set- 
tlement by  Dahlberg,  and  he,  Dahlberg,  went  to  defendant  Davis  for 
help.  Davis  finally  loaned  him  $125,  but  insisted  upon  the  delivery  of 
the  machines  in  question  as  security  for  the  loan.  To  this  Dahlberg 
yielded,  and  pursuant  thereto  delivered  the  machines  to  Davis,  and  at 
the  same  time,  at  Davis'  request,  he,  Dahlberg,  issued  a  receipt  to  Da- 
vis, in  the  name  of  the  plaintiff  company,  showing  payment  of  the  sum 
of  $205  in  full  for  the  two  machines.  Dahlberg  did  not  receive  more 
than  $125,  and  he  did  not  sell  the  machines  to  Davis.  Davis  says  in  a 
half-hearted  way  that  he  purchased  the  machines  from  Dahlberg,  but 
his  own  testimony  shows  that  the  transaction  was  a  pledge  rather  than 
a  sale.  With  the  money  so  received  Dahlberg  took  tip  the  two  pro- 
tested checks ;  but  plaintiff  had  no  knowledge  as  to  where  the  money 
came  from  until  after  it  had  actually  been  received  and  credited. 
Thereupon  one  of  plaintiff's  agents  went  to  Ottumwa  to  settle  its  af- 
fairs with  Dahlberg,  and  then  learned  of  the  pledge  of  the  machines. 
This  action  of  replevin  was  then  instituted,  resulting  in  the  judgment 
heretofore  stated. 

While  many  questions  are  argued,  there  is  but  a  single  proposition 
involved  in  the  case,  and  that  is,  may  plaintiff  recover  the  machines 
from  Davis  without  returning  the  $125  loaned  by  him  to  Dahlberg? 
Much  is  said  about  the  rules  applicable  to  gambling  transactions,  which 
has  nothing  to  do  with  this  case.  Davis  did  not  return,  nor  did  Dahl- 
berg receive,  the  $125  because  of  any  change  of  heart  on  the  part  of 
Davis.  No  one  pretends  that  this  $125  was  any  part  of  the  money 
won  from  Dahlberg.  It  is  practically  conceded  that  it  was  a  loan  from 
Davis  to  Dahlberg,  induced  to  some  extent,  perhaps,  by  the  thought 
that,  as  Dahlberg  had  lost  his  money  in  defendant's  establishment,  he, 
Davis,  would  be  more  likely  than  any  one  else  to  make  the  loan ;  but 
at  the  same  time  Davis  was  not  conscience-smitten,  for  he  demanded 
and  received  what  was  thought  to  be  adequate  security  for  the  loan. 
But  this  loan  was  not  made  to  plaintiff  company,  or  to  Dahlberg  as 
agent  of  the  company,  but  to  Dahlberg  individually,  to  enable  him  to 
meet  a  shortage  due  his  principal.  He  had  the  right  as  an  individual 
to  borrow  money  of  whom  he  would,  but  he  had  no  authority  to  pledge 
the  property  of  his  employers  as  security  for  his  individual  debts.  No 
agent  has  any  such  implied  authority,  and  it  is  not  claimed  that  any 
such  express  authority  was  given.  Dahlberg  told  Davis  that  he  was 
short  in  his  accounts,  and  tliat  he  wanted  the  money  to  send  to  his  em- 


f « 


88  THE  RELATION  (Part  1 

ployer.  This  being  true,  it  is  clear  that  the  loan  was  not  made  either 
in  fact  or  form  to  the  company.  Dahlberg  did  represent  that  the  ma- 
chines belonged  to  him  individually,  and  that  he  had  a  perfect  right  to 
sell  them ;  but  he  did  not  represent  to  Davis  that  he  had  authority  to 
pledge  them  for  a  loan  either  to  himself  or  to  his  principal. 

Divested  of  all  extraneous  matter,  the  case  is  this:  Dahlberg  had 
possession  of  the  machines  as  agent  for  the  plaintiff,  with  authority 
to  sell  the  same  and  to  collect  the  purchase  price.  He  was  short  in  his 
accounts  with  his  principal,  and  applied  to  Davis  for  a  loan  to  make 
up  this  shortage,  stating  the  facts  to  him,  Davis.  He  represented  to 
Davis  that  the  machines  were  his,  and  that  he  had  authority  to  sell 
them.  Davis  loaned  $125  to  Dahlberg  individually,  and  took  the  ma- 
chines as  security  for  the  loan,  but,  in  order  to  make  the  transaction 
appear  as  a  sale,  insisted  upon  a  receipt  showing  a  sale  rather  than  a 
pledge.  Dahlberg  did  not,  of  course,  own  the  machines,  and  he  could 
not  pledge  them  as  security  for  his  individual  indebtedness.  These  be- 
ing the  facts,  the  ultimate  conclusion  is  clear.  Dahlberg  having  no  ex- 
press or  implied  authority  to  pledge  the  machines  as  security  for  his 
own  debt,  the  transaction  was  not  binding  upon  the  plaintiff,  and  it 
may  recover  its  property,  unless  it  be  that,  by  receiving  the  money  as 
a  result  of  the  transaction,  it  ratified  the  same  and  is  estopped  from 
asserting  its  title.  Of  course,  if  Dahlberg  had  assumed  to  act  as  an 
agent  for  his  company  in  securing  the  loan  and  pledging  the  machines, 
and  plaintiff  had  received  the  money  so  obtained,  it  could  not  repudi- 
ate the  transaction  without  returning  the  money. 

But  that  is  not  this  case.  Here  the  loan  was  not  made  to  the  plain- 
tiff either  actually  or  ostensibly,  but  to  Dahlberg  in  his  individual  ca- 
pacity to  enable  him  to  meet  a  shortage  to  his  company.  The  property 
was  not  pledged  as  the  property  of  the  company,  but  as  Dahlberg's.^^ 
Dahlberg  was  indebted  to  his  company  on  other  accounts,  and  the  loan 
was  to  enable  him  to  make  up  his  shortage  to  his  principal.  The  com- 
pany had  the  right  to  receive  its  money  from  its  agent  to  apply  on  this 
shortage,  no  matter  what  its  source,  so  long  as  the  agent  had  not  un- 

3  3  See,  also,  Watson  v.  Swann,  11  C.  B.  N.  S.  756,  31  L.  J.  C.  P.  210,  103  R. 
C.  L.  756  (1862) ;  Commercial  Bank  v.  Jones,  18  Tex.  811  (1857) ;  Pittsburgh 
&  Steubenville  R.  R.  v.  Gazzam,  32  Pa.  340  (1858) ;  Hamliu  v.  Sears,  82  N. 
Y.  327  (1880),  holding  that  "the  doctrine  properly  applies  only  to  cases  where  • 
one  has  assumed  to  act  as  agent  for  another."  And  it  has  been  held  that  the 
agent  must  not  merely  assume,  but  that  he  must  profess  to  act  as  agent. 
Ferris  v.  Snow,  130  Mich.  254,  90  N.  W.  850  (1902);  Mitchell  v.  Minn.  Fire 
Ass'n,  48  Minn.  278,  51  N.  W.  608  (1892) ;  Keighley  v.  Durant,  [1901]  A.  C. 
240,  70  L.  J.  K.  B.  662,  84  L.  T.  R.  N.  S.  777,  17  T.  L.  Rep.  527.  In  this 
last  case  it  had  been  decided  by  the  lower  court,  1  Q.  B.  629,  69  L.  J.  Q.  B. 
382,  82  L.  T.  Rep.  N.  S.  217,  16  T.  L.  R.  244,  48  Wkly.  Rep.  476  (1900),  that 
an  undisclosed  intention  to  act  as  agent  was  enough,  though  the  agent  had 
not  openly  professed  to  act  for  another.  To  the  same  effect  is  Hayward  v. 
Langmaid,  181  Mass.  426,  63  N.  E.  912  (1902).  In  Greenfield  Bank  v.  Crafts, 
4  Allen,  447  (1862),  the  court  went  so  far  as  to  hold  that  an  agt  "may  be 
ratified  where  there  was  no  pretense  of  agency."  This  case  involved  the 
ratification  of  a  forgery. 

h 


I    -1 


Ch.  4)  CREATION  OF  THE  RELATION  89 

dertaken  to  act  in  his  capacity  as  agent  in  obtaining  the  money.  It 
was  not  bound  to  return  the  money,  because  its  agent  borrowed  the 
same  in  his  individual  capacity  and  pledged  his  principal's  property  as 
security  therefor,  not  as  agent,  but  representing  himself  to  be  the  own- 
er thereof,  with  authority,  in  virtue  of  such  ownership,  to  sell.  The 
doctrine  of  ratification  has  no  application  to  such  a  state  of  facts,  for 
there  is  nothing  to  ratify ;  nothing  was  done  on  the  company's  behalf 
or  in  its  name ;  the  transaction  was  in  the  name  of  Dahlberg  and  for 
his  individual  benefit.  In  such  cases  the  rules  relating  to  ratification 
manifestly  do  not  apply.  Thacher  v.  Pray,  113  Mass.  291,  18  Am. 
Rep.  480 ;  Mechem  on  Agency,  §  127 ;  Hamlin  v.  Sears,  82  N.  Y.  327 ; 
White  v.  Sanders,  32  Me.  188. 

We  are  then  brought  down  to  the  simple  question  as  to  which  of  the 
parties  to  this  litigation  has  the  better  title  or  right  to  the  possession 
of  the  property.  Plaintiff  is  conceded  to  have  been  the  owner.  If  it 
has  lost  its  title,  it  was  through  the  act  of  Dahlberg,  its  agent.  Dahl- 
berg had  no  authority,  either  express  or  implied,  to  mortgage  or  pledge 
the  property  for  a  debt  of  his  own.  Bray  v.  Flickinger,  69  Iowa,  167, 
28  N.  W.  492;  s.  c,  79  Iowa,  313,  44  N.  W.  554.  Even  if  Dahlberg 
had  assumed  to  mortgage  the  property  as  the  property  of  his  principal, 
he  would  not  have  had  authority  to  do  so  under  power  to  sell  and  col- 
lect the  purchase  price,  although  here  the  question  of  estoppel  by  rati- 
fication might  perhaps  arise.  See,  as  supporting  these  conclusions : 
Mordhurst  v.  Boies,  24  Iowa,  99;  Gilbert  v.  Baxter,  71  Iowa,  327,  32 
N.  W.  364 ;  Van  Vechten  v.  Jones,  104  Iowa,  436,  7Z  N.  W.  1032 ; 
Edgerly  v.  Cover,  106  Iowa,  670,  77  N.  W.  328. 

None  of  the  cases  cited  and  relied  upon  by  appellee  are  in  point,  for 
in  each  there  was  some  act  done  by  the  agent  in  the  name  of  or  on  be- 
half of  his  principal  which  was  the  subject  of  ratification.  This  is  not 
true  in  the  case  at  bar,  and  plaintiff  was  not  obliged  to  see  if  there  was 
any  "taint  on  the  money"  which  was  paid  it  by  its  agent,  Dahlberg,  in 
satisfaction  or  part  satisfaction  of  his  account  with  it.  Even  if  the 
money  were  tainted,  there  is  no  principle  of  either  law  or  morals  which 
would  prevent  the  plaintiff  from  receiving  it. 

The  judgment  of  the  district  court,  which  was  evidently  based  upon 
the  theory  of  ratification,  is  wrong,  and  it  is  therefore  reversed. 


90  THE  RELATION  (Part  1 


(B)  Existence  of  Principal  . ,  » 

In  re  EMPRESS  ENGINEERING  CO.  ^     f 

(Chancery  Division  of  the  High  Court  of  Justice,  1880.     16  Ch.  Div.  125, 
43  L.  T.  N.  S.  742,  29  Wkly.  Rep.  342.) 

Glasier  &  Archer  agreed  with  Cottier,  who  acted  for  a  company, 
intended  to  be  registered  as  a  limited  company,  to  be  called  the  Em- 
press Engineering  Company,  to  sell  to  the  company  for  £3,000.  the 
right  to  manufacture  and  sell  the  Empress  water  motor.  All  costs, 
both  before  and  after  the  company  should  have  been  registered,  were 
to  be  borne  by  the  company,  including  60  guineas  to  Jones  &  Pride,  so- 
licitors, for  the  incorporation  and  registration  of  the  company.  This 
agreement  the  directors  of  the  company,  by  resolution  after  the  com- 
pany was  organized,  ratified.  On  the  winding  up  of  the  company, 
Jones  &  Pride  put  in  a  claim  for  the  60  guineas  and  other  charges. 

Jessel,  M.  R.  I  must  say  that  I  do  not  see  how  it  was  possible 
for  the  Vice-Chancellor  to  have  decided  otherwise  than  he  did.  The 
contract  between  the  promoters  and  the  so-called  agent  for  the  com- 
pany of  course  was  not  a  contract  binding  upon  the  company,  for 
the  company  had  then  no  existence,  nor  could  it  become  binding  on 
the  company  by  ratification,  because  it  has  been  decided,  and,  as  it 
appears  to  me,  well  decided,  that  there  cannot  in  law  be  an  effectual 
ratification  of  a  contract  which  could  not  have  been  made  binding 
on  the  ratifier  at  the  time  it  was  made,  because  the  ratifier  was  not 
then  in  existence.  It  does  not  follow  from  that  that  acts  may  not 
be  done  by  the  company  after  its  formation  which  make  a  new  con- 
tract to  the  same  effect  as  the  old  one,  but  that  stands  on  a  different 
principle.  I  am  of  opinion,  therefore,  that  there  was  no  contract  bind- 
ing the  company  to  pay  this  £63.  to  Messrs.  Jones  &  Pride. 

Supposing,  however,  that  there  was,  it  is  then  contended  that  a 
mere  contract  between  two  parties  that  one  of  them  shall  pay  a  cer- 
tain sum  to  a  third  person  not  a  party  to  the  contract,  will  make  that 
third  party  a  cesui  que  trust.  As  a  general  rule  that  will  not  be  so. 
A  mere  agreement  between  A.  and  B.  that  B.  shall  pay  C.  (an  agree- 
ment to  which  C.  is  not  a  party  either  directly  or  indirectly)  will  not 
prevent  A.  and  B.  from  coming  to  a  new  agreement  that  next  day 
releasing  the  old  one.  If  C.  were  a  cestui  que  trust  it  would  have 
that  eft'ect.  I  am  far  from  saying  that  there  may  not  be  agreements 
which  may  make  C.  a  cestui  que  trust.  There  may  be  an  agreement 
like  that  in  Gregory  v.  Williams,  3  Mer.  582,  where  the  agreement 
was  to  pay  out  of  property,  and  one  of  the  parties  to  the  agreement 
may  constitute  himself  a  trustee  of  the  property  for  the  benefit  of  the 
third  party.  So,  again,  it  is  quite  possible  that  one  of  the  parties  to 
the  agreement  may  be  the  nominee  or  trustee  of  the   third  person. 


Ch.  4)  CREATION  OF  THE  RELATION  91 

As  Lord  Justice  James  suggested  to  me  in  the  course  of  the  argument 
that  a  married  woman  may  nominate  somebody  to  contract  on  her  be- 
half, but  then  the  person  makes  the  contract  really  as  trustee  for  some- 
body else,  and  it  is  because  he  contracts  in  that  character  that  the 
cestui  que  trust  can  take  the  benefit  of  the  contract.  It  appears  to 
me,  therefore,  that  on  both  the  grounds  mentioned  by  the  Vice-Chan- 
cellor  this  claim  cannot  be  supported. 

There  is  another  ground  suggested,  namely,  that  as  the  company 
has  had  the  benefit  of  the  registration  they  ought  to  pay  for  it.  But 
the  answer  to  that  is  this — that  was  not  the  claim  brought  forward. 
The  claim  brought  forward  was  for  an  agreed  sum  of  £63.,  and  any 
order  we  make  (I  do  not  know  whether  it  is  necessary  to  express  it) 
will  not  prejudice  that  claim,  which  is  merely  for  an  amount  due  for 
services  the  benefit  of  which  has  been  taken  by  the  company. 

James,  h.  J.     I  am  entirely  of  the  same  opinion. 

I  think  it  is  perhaps  as  well  that  we  should  say  that  Gregory  v.  Wil- 
liams seems  to  be  misunderstood.  When  that  case  is  considered  with 
the  careful  criticism  with  which  the  Master  of  the  Rolls  has  examined 
it,  it  appears  quite  clear  that  there  was  there  a  transfer  of  property 
with  a  declaration  of  trust  in  favour  of  a  third  person,  which  was  a 
totally  dififerent  thing  from  a  mere  covenant  to  pay  money  to  that 
person.  As  regards  the  other  point,  notwithstanding  what  was  said 
by  Vice-Chancellor  Malins  in  Spiller  v.  Paris  Skating  Rink  Com- 
pany, 7  Ch.  D.  368,  it  appears  to  me  that  it  is  settled,  both  in  the 
Courts  of  Law  and  by  us  in  the  Court  of  Appeal  in  that  case  to  which 
we  have  been  referred  of  In  re  Hereford  &  South  Wales  Waggon 
&  Engineering  Company,  2  Ch.  Div.  621,  that  a  company  cannot  ratify 
a  contract  made  on  its  behalf  before  it  came  into  existence — cannot 
ratify  a  nullity.^'*  The  only  thing  that  results  from  what  is  called 
ratification  or  adoption  of  such  a  contract  is  not  the  ratification  or 
adoption  of  a  qua  contract,  but  the  creation  of  an  equitable  liability 
depending  upon  equitable  grounds.  It  is  inequitable  for  a  man  not 
to  pay  for  the  services  of  which  he  has  taken  the  benefit.  That  was 
the  only  ground  upon  which  we  have  held  that,  in  that  case,  Walter  & 
Head  would  have  had  a  claim  for  services  before  the  registration  of 
the  company,  had  not  an  equitable  defense  been  effectually  set  up  on 
the  ground  of  a  fraudulent  concealment  of  the  agreement. 

James,  L.  J.  The  appeal  will  be  dismissed  with  costs.  It  will  be 
without  prejudice  to  any  equitable  claim  on  a  quantum  meruit.  I  may 
add,  as  the  Master  of  the  Rolls  pointed  out  to  me  in  the  course  of  the 
argument,  that  in  Gregory  v.  Williams,  3  Men  582,  the  man  with 

3*  To  the  same  effect,  see  INIelhado  v.  Porto  Allegre,  New  Hampburg  &  Bra- 
zilian Ky.  Co.,  LlD)Ue(l,  L.  K.  y  C.  P.  50:^,  31  L.  T.  Kep.  N.  S.  57,  23  W. 
R.  57  (1874),  holding  that  if  a  promoter  has  spent  time  and  money  in  form- 
ing a  company,  and  the  company  accepts  the  benefits  of  his  efforts,  the  com- 
pany cannot  ratify  so  as  to  become  liable,  for  at  the  time  of  the  agreement 
it  was  non-existent  and  therefore  incapable  of  contracting. 


^^ 


92  THE  RELATION  (Part  1 

whom  the  contract  was  made  was  one  of  the  plaintififs,  and  the  only 
defence  there  would  have  been  misjoinder  of  plaintiffs,  and  that  is 
a  defence  which  the  Court  was  not  likely  to  view  with  much  favour. 


BATTELLE  v.   NORTHWESTERN   CEMENT  &  CONCRETE 

PAVEMENT  CO. 

(Supreme  Court  of  Minnesota,  1SS7.    37  Mixin.  89,  33  N.  W.  327.) 

Before  the  incorporation  of  the  defendant,  the  plaintiff  had  agreed 
with  two  of  its  promoters  to  buy  a  piece  of  real  estate  and  to  sell  the 
same  to  the  company.  This  he  did,  giving  a  mortgage  back,  and  the 
company,  when  it  was  formed,  assumed  the  mortgage.  Default  was 
made,  and  the  mortgage  was  foreclosed ;  but  the  property  did  not  sell 
for  enough  to  pay  the  debt,  and  the  plaintiff  was  held  for  the  defi- 
ciency. He  now  sues  to  recover.  From  judgment  for  the  plaintiff 
and  an  order  refusing  a  new  trial,  the  defendant  appeals. 

GiivFiLLAN,  C.  J.  It  is  self-evident  that  a  corporation  is  not  bound 
by  engagements  of  its  "promoters,"  (i.  e.,  those  who  bring  about  its 
organization,)  assuming  to  contract  for  it  in  advance.  It  cannot  have 
agents  till  it  has  an  existence.*^  The  promoters  are  not  the  cor- 
poration, and  their  contracts  cannot  be  its  contracts.  This  is  so, 
though  the  promoters  become,  at  the  creation  of  the  corporation,  its 
only  stockholders,  directors,  and  officers.  After  it  comes  into  exist- 
ence and  operation,  it  may,  by  adopting  the  engagements  thus  made 
for  it  in  advance,  make  them  its  contracts,  precisely  as  it  might  make 
similar  contracts  had  no  previous  engagements  been  entered  into. 
There  can  be  no  difference  between  its  making  a  contract  by  adopting 
an  agreement  originally  made  in  advance  for  it  by  promoters,  and  its 

3  5  In  Roekford,  R.  I.  &  St.  L.  R.  Co.  v.  Sage,  65  111.  328,  16  Am.  Rep.  587 
(1872),  the  court,  while  declining  to  say  that  a  promoter  cannot  recover  for 
services  and  expenses  before  the  organization  of  the  company,  if  the  company 
aftervpards  accepts  and  receives  the  benefit  of  them,  nevertheless  regards  it 
as  more  reasonable  to  hold  services  performed  or  expenses  incurred  prior  to 
the  organization  as  gratuitous,  in  view  of  the  general  good  or  private  benefit 
expected  to  result  from  the  objects  of  the  corporation.  The  same  court,  in 
Wood  V.  Whelen,  93  111.  153  (1879),  held  that  there  could  be  no  question  of 
the  right  of  directors  to  ratify  and  confirm  the  action  of  promoters  of  the 
corporation,  and  Bruner  v.  Brown,  139  Ind.  600,  38  N.  B.  318  (1891),  extended 
this  power  to  ratify  to  contracts  to  pay  promoters  for  their  services.  See, 
also,  Stanton  v.  N.  Y.  &  Eastern  Ry.  Co.,  59  Conn.  272,  22  Atl.  300,  21  Am, 
St.  Rep.  110  (1890);  Paxton  Cattle  Co.  v.  First  Nat.  Bank  of  Arapahoe,  21 
Neb.  621,  33  N.  W.  271,  59  Am.  Rep.  852  (1887),  citing  Low  v.  Conn..&  Pas- 
sumpsic  Rivers  R.,  45  N.  H.  370  (1864). 

That  a  corporation,  which  with  full  knowledge  of  all  the  facts  assumes  and 
agrees  to  the  terms  or  accepts  the  benefits  of  a  contract  made  by  its  promoters, 
will  be  bound  thereby,  or  at  least  will  be  estopped  to  deny  its  liability,  has 
been  often  held.  But  this  does  not  hold  unless  the  evidence  of  such  accept- 
ance is  clear.  Buffington  v.  Bardon,  80  Wis.  635,  50  N.  W.  776  (1891) ;  Bell's 
Cap  R.  Co.  V.  Christy,  79  Pa.  54,  21  Am.  Rep.  29  (1875).  A  corporation  may 
ratify  a  contract  made  when  it  was  a  de  facto  corporation  only.  Whitney 
V,  Wyman,  101  U.  S.  392,  25  L.  Ed.  1050  (1879).  . 


B^t telle  VyJ^.^y.  C.&C.  PAVBIvIENT  Co, 
stp:  -  " 

Before  the  incdiDOration  of  def.,  ptf.  h°d 
Teed  with  two  of  its  "oromoterE  to  buy  fi  tr'^et  of 
^nd  p.n6    sell  srme  to  Co.  This  he  did,  giving  back 
)rt'^<=ge,  ^nd  the  Co.,  when  it  w^s  formed,  assumed 
■e  -nortRPge.  IIort,q-*^ge  l*>ter  w^s  foreclosed  «nd 
le  -oro^erty  sold,  but  not  enough  w^s  realized  to 
».y  the  debt,  ^nd  i^tf.  w^s  held  for  the  deficiency, 
i   now  sues  to  recover • 
irt: 

The  directors  and  stockholder  of  Def.  Co. 
ire  knew  of  the  contract,  «nd  received  the  benefit 
.  the  land  it  conveyed  in  their  business.  Th^t  is 
le  e-ui-tealent  of  adopting  s«me,  and  they  are  li^bl 
ider  it,  the  same  as  if  an  entirely  new'  contr'^ct 
-d  been  made. 

VERDICT  FOR  PTF. 


b(^d  t.t^cr   ,,^eb  lo  nol;taionr6oi  ©lo^eff 

>*    "        ■    '  -    ,616   erf  airfT   .  oO  c-j   srn^.a  Ilea   bn 

t  ,     •:Gio'5:   a*'»'W  ^i   fierfw   ,»oO   exiit    5n^    ,83 

bn«  bsaoloeio^  a-^w  te^'^X  e^^^c^^f-xoM  .©t^f^g^T 

o;t    5dsil'^©'x  3^w  rigifOfie  ;torf  ;txrcf   ,  bloa  v^fiero 

♦  tevo^ei  oi  aejje 

,oO   .!©(  .e&Xoff^toods    &n3   8^oto9til5   erfT 

^^'il'enecf  ©rfil    j>6\'"X9©e'i   Br[<=*   .-te?  n.d'noD   erf'j"  ^o  wen 

ai   ;t'^rfr   •saenxsucf  tled'i  ai   l)©'/«vrtoo   ^x   5xi.^I 
Icf«il   ©IB  Y®rf^   ^^•^-    ♦^a^^'^s  ^nitJqofjB  ^o   :tn«^I-«itii; 

if^^Tt^xiOQ  wen  Yletiine  hb  ^.t   3b  eifi.Rs   ejfJ   ,»ti 

^'sg?^  HOI  TOia.^£v 


Ch.  4)  CREATION  OF  THE  RELATION  93 

making  an  entirely  new  contract.  No  greater  formality  can  be  re- 
quired in  the  one  case  than  in  the  other ;  and  if  it  could  make  an  en- 
tirely new  similar  contract,  without  the  use  of  its  seal,  or  without 
writing,  or  without  formal  action  of  its  board  of  directors,  it  may  also 
so  adopt  an  agreement,  assumed  to  be  made  for  it  in  advance  by 
promoters.  It  is  not  requisite  that  such  adoption  or  acceptance  be 
express,  but  may  be  shown  from  acts  or  acquiescence  of  the  corpora- 
tion or  its  authorized  agents  as  any  similar  contract  may  be  shown. 

It  is  true  that  the  relations  between  the  promoters  and  the  agents 
and  shareholders  may  be  such,  or  the  engagements  made  in  advance 
by  the  promoters  be  of  such  a  character,  that  the  matter  of  adoption 
will  be  scrutinized  by  the  courts  with  great  strictness.  The  highest 
degree  of  fairness  is  required.  In  this  case  no  complaint  can  be  made 
as  to  the  fairness  of  the  transaction.  Not  only  did  every  stockholder 
and  director  and  officer  of  the  corporation,  after  it  was  formed,  know 
that  the  property  was  conveyed  to  it  upon  the  agreement  that,  when 
formed,  it  should  assume  and  pay  the  indebtedness  to  which  the  prop- 
erty was  subject,  but  each  of  them  was  a  party  to  that  agreement. 
After  receiving  the  benefit  of  the  previous  engagement,  and  accepting 
and  using  the  property  in  its  business,  knowing  that,  as  part  of  the 
price  of  the  property,  the  corporation  was  to  pay  the  indebtedness, 
it  can  hardly  be  permitted  now  to  deny  its  liability  to  pay  it ;  and  the 
same  may  be  said  as  to  the  claim  that,  because  plaintiff  was  a  director, 
the  agreement  of  the  corporation,  by  its  adoption  of  the  previous  ar- 
rangement with  him,  was  not  binding  upon  it.  The  rule  that  a  con- 
tract between  a  director  of  a  corporation  and  the  corporation  is  void- 
able at  the  instance  of  the  latter,  or  of  its  stockholders,  cannot  be  ap- 
plicable to  a  case  where  all  interested  in  the  corporation,  its  officers, 
directors,  and  stockholders,  not  only  know  of  but  consent  to  it,  and 
where  the  property  acquired  by  the  corporation  under  the  contract 
is  kept  and  used  by  it,  no  one  dissenting. 

The  evidence  was  sufficient  to  sustain  a  verdict  for  plaintiff,  within 
the  rules  herein  stated.    Order  affirmed. 


(C)  Act  Done  for  the  Principal 

WATSON  V.  SWANN. 

(Court  of  Common  Pleas,  1862.     11  C.  B.  N.   S.  756,  .31  L.  J.  C.  P.  210,  103 

E.  C.  L.  7.56.) 

Action  on  a  policy  of  assurance  on  goods  shipped  on  steamer  La 
Plata,  on  which  there  was  a  loss  by  jettison.  The  further  facts  ap- 
pear in  the  opinions. 

Ekli:,  C.  J.  I  am  of  opiiuon  that  this  action  cannot  be  sustained. 
It  is  an  action  of  contract.  /  It  is  important,  therefore,  not  only  to 
ascertain  what  is  the  subject^of  the  contract,  but  who  are  the  parties 


04  THE  -yEiiATfoN  (Part  1 

to  it;  for,  it  is  clear  law  that  no  one  can  sue  upon  a  contract  unless  it 
has  been  made  by  him,  or  has  been  made  by  an  ag^t  professing  to 
act  for  him,  and  whose  act  has  been  ratified  by  him.  Now,  here,  the 
contract  was  not  made  by  the  plaintilT ;  nor  did  it  purport  to  be  made 
on  his  behalf ;  it  purported  to  be  made  by  Smith  on  his  own  behalf. 
And  it  is  clear  that  the  plaintiff  never  intended  to  ratify  that  contract 
in  toto,  but  part  of  it  only,  viz.,  so  much  of  it  as  was  sought  to  be 
appropriated  to  him  by  Smith.  A  very  wide  extension  has  been  given 
to  the  principle  I  have  adverted  to  as  to  the  parties  to  a  contract,  in 
respect  of  policies  of  insurance,  viz.,  that  persons  who  could  not  be 
named  or  ascertained  at  the  time  the  policy  is  effected  are  allowed  to 
come  in  and  take  the  benefit  of  the  insurance.  But  then  they  must 
be  persons  who  were  contemplated  at  the  time  the  policy  was  made. 
Here,  however,  Watson  was  not  and  could  not  be  contemplated  as 
being  a  party  to  whose  benefit  the  policy  should  enure,  at  the  time  it 
was  effected.  The  policy  was  effected  by  Smith  in  December,  1860. 
He  was  not  at  that  time  employed  by  Watson.  The  first  intimation 
he  received  from  Watson  that  he  wanted  to  effect  an  insurance,  was 
received  by  him  in  January,  1861,  when  he  was  requested  to  take  out 
on  his  behalf  an  open  policy  for  £5000.  against  jettison  on  deck.  Find- 
ing himself  unable  to  effect  such  a  policy  as  Watson  required,  he  had 
recourse  to  the  expedient  of  appropriating  a  part  of  his  own  contract 
to  Watson. 

No  doubt,  the  principle  contended  for  on  the  part  of  the  plaintiff 
is  one  of  considerable  importance  to  the  mercantile  community.  But 
I  am  clearly  of  opinion  that  Watson  cannot  sue  upon  this  policy.  It 
may  be  that  Smith  might  maintain  an  action  as  trustee  for  the  parties 
really  interested :  but  it  will  be  time  enough  to  consider  that  if  the 
question  should  arise.  No  case  can  be  found  of  a  running  policy  hav- 
ing been  appropriated  to  cover  a  risk  not  contemplated  at  the  time. 
Such  a  proceeding  is  entirely  unknown  to  the  law  of  contract.  With 
the  consequences  we  have  nothing  to  do,  even  though  the  effect  of 
our  decision  should  be  to  throw  doubt  upon  the  validity  of  running 
policies.  The  cases  to  which  the  learned  counsel  for  the  plaintiff  have 
referred  seem  to  me  to  be  entirely  in  conformity  with  our  present 
decision.  In  Lucena  v.  Craufurd  and  Routh  v.  Thompson,  the  prizes 
were  vested  in  the  Crown ;  the  Crown,  therefore,  was  interested  in 
the  policies,  and  substantially  they  were  effected  on  the  behalf  of  the 
Crown :  in  both,  the  very  risk  insured  against  was  the  risk  in  respect 
of  which  the  action  was  brought.  Here,  it  is  quite  certain  that  the 
underwriters  did  not  undertake  this  risk;  and  that,  if  asked  to  do  so, 
they  would  have  refused.  I  therefore  think,  that,  upon  the  declara- 
tion and  the  fifth  plea,  denying  that  the  policy  was  made  for  the  use 
and  benefit  or  on  account  of  the  plaintiff;  the  defendant  is  entitled 
to   judgment.  ' 

WiivLES,  J.  I  am  of  the  same  opinion.  iTo  entitle  a  person  to  sue 
upon  a  contract,  it  must  clearly  be  shown  that  he  himself  made  it,  or 


Watson  v«  ^°nn« 
ts:  

Action  on  a  policy  of  insurance  on  goods 
ipped  on  a  certain  steamer,  on  which  there  w^s  a 
3S.  It  appears  that  the  contract  was  not  ra«de  by 
f.  or  even  on  his  behalf^  but  by  one  Smith,  on 
3  own  beh«lf .  Ptf.  was  not  c^-oable  of  being  ascer 
Ined  fit  the  time.  Smith  made  the  contract  with 
orders  to  effect  s«me  from  ptf.  Ptf.  attempts 
V   to  ratify  the  contract  ^nd  sue  ut>on  it  to 
sume  the  benefits  therefrom, 
pt: 

A  etr«^no-er,  «^s  -ntf.  is  "'^ere,  cnnot  by  ^ny 
D-nosed  r^tif lc«'tion  assume  the  "benefit  of  a  cont- 
5t,  when  he  h*^  s  cri^n  no  orders  to  effect  s^me. 
ir)ers"»n  here  w^s  nointed  out  '^t  the  time  the  nol- 
^  w^s  effected  '^s  the  Derson  who  w^s  to  be  the 
[ler  of  the  good??  assured. 
\  VEKDICT  FOR  DEFS. 


First  Hat.  Bank  of  Trenton  v.  G^y. 

st  S  ! 

Action  on  a  promissory  note  signed  by 
«th«n  Gillilfin  «nd  S-muel  G^y,  p«y-ble  to  Hobert 
lllil°n.  Pp^^ee  l^ter  endorsed  note  over  to  T^tr. 
pn^-.  "^einfr  u^ry^^id  the  note  c-me  into  this  court 
or  collection  from  II.  Gillil--n.  It  -^pe«rs  th.«t 
•f.  while  rilling  to  become  surety  of  his  son. 
e  rt  the  p-em  time  desired  to  restrict  th^t  surety 
>1lr^  to  the  members  of  his  f^'mily. 

Def  >^a  ^   right  so  to  restrict  his  liabili 
t-   The  pon  Y^S   no   right  to  t^^tSsitt   disreg'^rd 
hese  restrictions.  Def.  h^s  a  right  to  spy  "I  neve 
-^  pssent  to  this  contr^-ct".  Def.  hfid  power  to 

3tion  the  contract,  tho  it  w^s  signed  with  his 
Lfime  without  his  authority.  However,  he  h^s  not 

lone  this.  _  ^^o-t^t. 

VERDICT  FOR  PTF.  REVERSED. 


abooB  lio  e  '^^^x   ^^^^^^^3  ^^x-;^-i^o  ^  no  be 

^cf  eD-m  ^oa  8-^>w  ^f  ^,*f  \^p.'ed   Birl  no  xieve  ^o 

^nv^  ;to.Bi*r.oo   erf^  e&^.ra^  tos^^e   o*   a*!®^ 

arr;t  sd   o*  a^w  orfw  -^^^^^^^^^.gg^  3^003  erf 5  Ic 


'         "^  ,    ^^^  ft  no  noi^o-^ 

*«r»--r-fr>«sal:Kioi^  »  ""       r«rr*r 

"^-Vrr  o*   tevo   e7or-v  ^'®-^*  .        ^^-^   bi^^n^f  ^-^ 

j„rf*  «r/5o  vUi«"^  emooerf  o*  3"//.^4^ 

.^^•>.r   f^rd  ^toli^set  o^   5^4^^?^  on  f>^rf  ^°^ 
ion  3»rt  *"   '^^  ^ 


Ch.  4)  CREATION  OF  THE  RELATION  95 

that  it  \\>as  made  on  his  behalf  by  an  agent  authorized  to  act  for  him 
at  the  tin)e,  or  whose  act  has  been  subsequently  ratified  and  adopted 
by  him.  The  law  obviously  requires  that  the  person  for  whom  the 
agent  profles^s  to  act  must  be  a  person  capable  of  being  ascertained 
at  the  tirr^e.  /It  is  not  necessary  that  he  should  be  named ;  but  there 
must  be  sucli  a  description  of  him  as  shall  amount  to  a  reasonable 
designation  of  the  person  intended  to  be  bound  by  the  contract.  In 
the  present  case,  the  policy  was  effected  on  goods  "to  be  valued  and 
declared  as  interest  might  appear."  No  person  was  pointed  out  at  the 
time  the  policy  was  effected  as  the  person  who  was  to  be  the  owner 
of  the  goods  insured.  Smith  was  professing  to  act  for  himself  at  the 
time  of  ryiaking  the  policy.  Goods  shipped  on  his  own  account,  or 
possibly/J^y  him  as  agent  for  another  person,  would  be  covered  by  the 
policy. //^But  a  stranger  who  had  given  him  no  orders  to  effect  a  policy 
for  hiM  clearly  cannot  by  any  supposed  ratification  assume  the  benefit 
of  thdlcontract.  The  cases  of  administrators  and  of  assignees  of 
bankrupts  stand  upon  a  totally  different  footing.  The  doctrine  of 
ratification  involves  this,  that  the  act  of  ratification  shall  have  refer- 
ence to  the  time  when  the  act  was  done  which  the  supposed  principaj, 
professes  to  ratify.  To  illustrate  our  opinion,  we  may  refer  to  tHe 
case  of  an  ordinary  policy.  In  the  ordinary  policy,  the  broker'who 
eff'ects  it  declares  that  he  does  so  as  well  in  his  own  name  as  for 
and  in  the  name  and  names  of  all  and  every  other  person  or  persons 
to  whom  the  same  death,  may,  or  shall  appertain,  &c. :  and  the  person 
who  sues  upon  it  must  be  either  the  broker  by  whom  it  is  effected  or 
the  person  on  whose  behalf  it  was  intended  to  be  effected.  No  sub- 
sequently acquired  interest  will  give  a  stranger  a  right  to  sue  upon  the 
policy.     *     *     *  ^® 

Williams  and  Keating,  JJ.,  also  rendered  opinions. 

Rule  nisi  to  direct  a  verdict  for  the  defendant  made  absolute. 


(D)   Who  may  Ratify 
FIRST  NAT.  BANK  OF  TRENTON  v.  GAY  et  al. 

(Supreme  Court  of  Missouri,  1876.    63  Mo.  33,  21  Am.  Rep.  430.) 

SiiKRWooD,  J."  Action  on  instrument  in  this  form: 
"$650.00  Trenton,  Mo.,  May  13,  1874. 

Ninety  days  after  date  we  promise  to  pay  to  the  order  of  Robert 
L.  Gillilan,  six  hundred  and  fifty  dollars,  for  value  received,  with  in- 
terest after  maturity,  at  the  rate  of  ten  per  cent,  per  annum,  at  the 
First  National  Bank  of  Trenton,  Mo.;    and  if  not  paid  at  maturity, 

3"  Soo.  also.  Mnrsh  v.  .Joseph,  1  Cli.  213,  66  L.  J.  Ch.  128,  75  L.  T.  Hop.  N. 
S.  rj-,H,  4.')  W.  R.  20!)  (isn7). 

3'  I'art  of  the  opinion  is  omitted. 


90*  TOE  RELATION  (Part  1 

and  the  same  is  placed  in  the  hands  of  an  attorney  for  collection,  we 
agree  and  promise  to  pay  an  additional  sum  of  ten  per  cent,  as  attor- 
ney's fee.  Nathan  Gillilan. 

"Samuel  Gay." 

On  the  above  instrument  there  was  this  indorsement : 

"For  value  received,  I  assign  the  within  note  to  First  National  Bank 
of  Trenton,  Mo.,  and  waive  protest,  notice  of  protest,  and  demand  of 
payment.  Robert  L.  Gillilan." 

The  petition  alleged,  among  other  things,  that  in  consequence  of  the 
non-payment  of  the  instrument  at  maturity,  it  was  placed  in  the  hands 
of  an  attorney  for  collection,  and  asked  judgment  not  only  for  the; 
principal  sum  with  interest,  but  also  asked  for  four  per  cent,  damages 
for  non-payment,  as  well  as  ten  per  cent,  damages  as  an  attorney's  fee. 

In  addition  to  other  matters,  the  defendant,  Nathan  Gillilan,  put  in 
a  plea  of  non  est  factum.  A  trial  was  had,  resulting  in  a  verdict  for 
plaintiff  and  judgment  accordingly.     *     *     * 

But  while  we  may  freely  concede  that  all  means  necessary  and  prop- 
er for  the  accomplishment  of  the  end  were  intended,  yet  this  conces- 
sion cannot  be  permitted  to  embrace  the  extraordinary  means  and 
measures  resorted  to  by  the  son,  in  the  present  instance.  These  consid- 
erations conspicuously  show  the  exceeding  impropriety  of  giving  the 
instruction  above  mentioned.  The  second  instruction  was  equally  er- 
roneous as  the  first.  The  evidence  of  plaintiff's  own  witnesses,  the  of- 
ficers of  the  bank,  shows  that  the  father,  in  proffering  the  use  of  his 
name,  for  the  accommodation  of  the  son,  distinctly  stated  "that  he  and 
Robert  were  both  good ;  that  he  did  not  wish  to  go  out  of  the  family 
for  security,  that  there  was  no  necessity  for  doing  so."  This  language 
is  susceptible  of  but  one  construction.  It  plainly  indicates  that  while 
the  father  was  willing  to  become  the  surety  of  his  son,  he  at  the  same 
time  desired  to  restrict  that  suretyship  to  the  members  of  his  family. 
And  he  had  the  undoubted  right  to  so  restrict  his  liability.  And,  as  a 
necessary  sequence  therefrom,  the  son  had  no  power  to  disregard 
tiese  restrictions  which  were  imposed  on  him. 

'These  remarks  are  but  the  application  of  a  very  familiar  doctrine 
respecting  agents  who  possess  only  special  and  limited  powers.  Thus, 
an  agent  authorized  to  draw  and  indorse  bills  in  the  name  of  his 
principal,  has  no  power  to  draw  or  indorse  a  bill  in  his  own  name,  or 
in  the  joint  name  of  himself  and  principal,  i  Stainback  v.  Read,  11 
Grat.  281,  62  Am.  Dec.  648.  A  ruling  similar  to  this  in  point  of  prin- 
ciple, was  made  in  Mechanics'  Bank  v.  Schaumburg,  38  Mo.  228.  And 
it  matters  not  whether  the  addition  of  the  name  of  Samuel  Gay  to  the 
note,  prior  to  its  delivery,  affected  the  rights  or  interests  of  Nathan 
Gillilan  injuriously  or  otherwise.  He  has  the  right  to  say,  when  as- 
certaining that  his  instructions  have  not  been  followed :  "I  never  gave 
assent  to  this  contract." 

The  instruction   referred  to  was  erroneous,  therefore,  as   already 
stated,  because  there  was  not  a  particle  of  evidence  tending  to  show 


Ch.  4)  CREATION  OF  THE  RELATION  97 

that  Nathan  Gillilan  was  willing,  at  the  outset,  to  assume  with  Samuel 
Gay,  or  indeed  any  one  else,  outside  of  his  family,  a  joint  liability 
in  the  execution  of  any  paper  whatever,  much  less  the  instrument  in 
suit.  There  are  other  errors  in  this  instruction  but  we  need  not  point 
them  out,  as  they  have  been  already  passed  upon  in  our  remarks  upon 
the  first  one  given.  And  the  errors  we  have  pointed  out  were  not 
aided  or  cured  by  the  harmless  platitude  which  the  court  of  its  own 
motion  gave,  "That,  unless  the  jury  find  from  the  evidence  in  the  case 
that  Nathan  Gillilan  authorized  Robert  L.  Gillilan  to  sign  his  (Nathan 
Gillilan's)  name  to  the  instrument  in  suit,  the  jury  must  find  for  the 
said  Nathan  Gillilan."  But  although  it  may  be  true  that  Nathan  Gilli- 
lan did  not  give  authority  to  sign  his  name  to  the  instrument  on  which 
the  claim  of  the  plaintiff  is  based,  yet  it  was  doubtless  in  his  power, 
upon  full  knowledge  of  what  had  been  done,  to  give  it  the  sanction 
of  his  approbation. 

There  have  been  many  refinements  adopted  about  this  doctrine  of 
ratification;  refinements  which  savor  more  of  subtlety  than  of  sound 
judgment.  With  some  exceptions,  not  necessary  to  be  adverted  to 
here,  the  general  proposition  is,  however,  undoubtedly  correct,  that 
he  who  may  authorise  in  the  beginning,  may  ratify  in  the  end.  This 
is  a  common  sense  view  of  the  matter,  easily  understood,  constantly 
acted  and  relied  on,  in  the  ordinary  occurrences  of  daily  life,  and 
should  not  be  frittered  away  by  subtleties  without  soundness,  and  dis- 
tinctions without  difference.  And  there  is,  therefore,  no  force/Tn  the 
point  urged  on  our  attention,  that  there  would  have  to  be  a  new  con- 
sideration in  order  to  attach  validity  to  a  confirmatory  act.  \^o  in- 
dependent consideration  is  required  in  the  case  of  an  accommodation 
indorser,  suretAetc,  in  the  first  instance,  and  it  is  difficult  to  see  why 
anything  more  sbould  be  required  on  subsequent  sanction  than  on 
original  assent.  Commercial  Bank  v.  Warren,  15  N.  Y.  (1  Smith) 
577,  and  cases  ci^d. 

The  Supreme  Court  of  Pennsylvania  (McHugh  vs.  County,  67  Pa. 
391,  5  Am.  Rep.  445,  and  cases  cited)  has,  it  seems,  uniformly  held 
that  there  could  be  no  ratification  without  a  new  consideration,  where 
the  original  act  was  mala  fide.  But  this  court,  in  the  case  of  Dow's 
Ex'r  V.  Spcnney's  Ex'r,  29  Mo.  386,  where  the  point,  indeed,  was  not 
expressly  raised,  but  where  there  was  no  proof  of  a  new  considera- 
tion, held  that  ratification  might  occur,  even  where  the  ratifier's  name 
had  been  forged.  There  is,  however,  no  proof  of  bad  faith  in  this 
case ;  so  that  the  Pennsylvania  decisions  to  which  we  have  been  cited, 
even  if   regarded  as  sound,   would  be   inapplicable  here.^^     *     *     * 

Judgment  reversed  and  cause  remanded. 

88  It  is,  of  course,  a  corollary  to  the  principal  case  that  a  ratification  can 
only  be  made  when  the  party  ratifying;  possessed  the  power  to  perforin  the 
act  ratified.    Marsh  v.  Fultou  County,  10  Wall.  676,  19  L.  Ed.  1040  (1870). 
(;oDij.l'R.&  A. — 7 


98  THE  RELATION  (Part  1 

KELSEY  V.   NATIONAL  BANK  OF  CRAWFORD   COUNTY. 

(Supreme  Court  of  Pennsylvania,  1871.    69  Pa.  426.) 

Plaintiff,  a  detective,  sues  in  assumpsit  to  recover  $5,000  reward 
for  detecting  the  felon,  who  had  robbed  the  bank  of  $150,000,  and 
recovering  the  money.  He  offered  to  prove  that  the  cashier  had  of- 
fered $5,000  reward  in  the  presence  of  some  of  the  directors,  and 
that  more  than  a  majority  of  the  directors  with  full  knowledge  sanc- 
tioned what  the  cashier  had  done.  Further  plaintiff  testified  that  he 
arrested  the  clerk  of  the  bank  and  recovered  nearly  all  the  money. 
He  now  brings  error  to  the  court  of  common  pleas  for  a  nonsuit. 

Williams,  J.^**  It  is  not  necessary  to  decide  whether  the  cashier 
ex  officio  had  authority  to  offer  the  reward  in  question  for  the  detec- 
tion of  the  thieves  that  robbed  the  bank.  If  he  had  no  authority,  the 
bank  is  liable  for  the  reward  if  the  offer  was  acquiesced  in  and  rati- 
fied by  the  directors.  The  law  is  well  settled,  that  a  principal  who 
neglects  promptly  to  disavow  an  act  of  his  agent,  by  which  the  latter 
has  transcended  his  authority,  makes  the  act  his  own  (Bredin  v.  Du- 
barry,  14  Serg.  &  R.  30) ;  and  the  maxim  which  makes  ratification 
equivalent  to  a  precedent  authority  is  as  much  predicable  of  ratifi- 
cation by  a  corporation  as  it  is  of  ratification  by  any  other  principal, 
and  it  is  equally  to  be  presumed  from  the  absence  of  dissent  (Gordon 
V.  Preston,  1  Watts,  387,  26  Am.  Dec.  75).  . 

It  was  accordingly  held  in  Bank  of  Pennsylvania  v.  Reed,  1  Watts 
&  S.  101,  that  though  the  authority  of  the  cashier  does  not  extend 
so  far  as  to  justify  him  in  altering  the  nature  of  the  debt  due  the 
bank,  or  in  changing  the  relation  of  the  bank  from  that  of  a  creditor 
to  that  of  an  agent  of  its  debtor,  yet  a  subsequent  acquiescence  of  the 
bank  in  such  an  exercise  of  power  would  be  conclusive  upon  it.  In 
delivering  the  opinion  of  the  court,  Rogers,  J.,  said:  "It  is  a  very 
clear  and  salutary  rule  in  relation  to  agencies,  that  when  the  prin- 
cipal, with  the  knowledge  of  all  the  facts,  adopts  or  acquiesces  in  the 
acts  done  under  an  assumed  agency,  he  cannot  be  heard  afterwards 
to  impeach  them,  under  the  pretence  that  they  were  done  without  au- 
thority, or  even  contrary  to  instructions.  'Oninis  ratihabitio  mandato 
sequiparatur.'  When  the  principal  has  been  informed  of  what  has 
been  done,  he  must  dissent  and  give  notice  of  it  in  a  reasonable  time ; 
and  if  he  does  not,  his  assent  and  ratification  will  be  presumed."  If 
then  the  directors  of  the  bank  were  informed  that  the  cashier  had 
offered  the  reward,  it  was  their  duty  promptly  to  disavow  the  act, 
if  they  did  not  intend  that  the  bank  should  be  bound  by  it.  If  they 
had  notice  of  the  offer  and  did  not  dissent  from  it,  their  assent  and 
ratification  must  be  presumed.  Nor  was  it  necessary,  in  order  to 
bind  the  bank  by  their  acquiescence,  that  notice  should  have  been 
given  to  the  directors,  when  sitting  in  their  official  capacity  as  a  board. 

"9  Part  of  the  opinion  is  omitted. 


Kelsley  v«  Benk, 
its: 

Ptf«,  a  detective,  sues  to  recover  '=•  reward 
rfered  by  the  cashier  of  def .  "bpnk,  the  offer 
ling  m^de  before  a  number  of  the  bank's  directors 
id  V7ith  the  knowledge  of  a  majority •Ptf,  did  wh^t 
Lj»* :  he  was  supposed  to  do  to  be  eligible  for 
iwerd  • 
Lit: 

The  law  is  well  settled  th^t  p.   principal 
10  neglects  promptly  to  disavow  an  act  of  his  agt. 
'  which  the  latter  transcends  his  authority, 
kes  the  '^ct  his  own.  The  ratification  is  the  « 
uit)«lent   to  a  precedent  authority.  The  evidence 
LOwed  T-ere  th^t  ptf.  talked  the  matter  over  with 
le  directors  individu*^lly  ^fter  the  reward  w^s 
ae,  so  it  is  cles'r  th.«t  the  bank's  officers  h«d 
lowledge  of  the  offer  ^nd  must  be  assumed  to  have 
itified  It, 

VERDICT  FOB  PTF. 


bi^^Bt    --^   iftvooei  o^   a  sua  ,ev'-x;toe.T8&  b  ,,!td1 

idllo  erf*    ^ifa^^cf   ,^65  ^o  telriQ^o  ed'i  ^cT  £>€ 
a%o^Q»ilb  3'5[nM   6if^  lo  ledaijjn  s  eio^ecf  ©Jb^ci 
d'^'rfw  5x6   .l;t1*^^c^ixoQ«*fil   «  lo   ©T^belwoajf  erf*  d^l 
10^   elcfi-ixle   ecf   o:^   ob   o^   baaoqans  asw  orf 

.1 

iRglonx-xa  ^s     ;^«rf^   6©I;J;?©s  Ilew  ai  wbI  ©n'T 
.itQB  Bid  5:0   ;)"D-B  xib  wov^slb  o^  ^^lifmnoiq  8D-o©l3« 
,^:tiiorfdir^  a  iff  8feiT©osn«TJ  i©*;f-Bl   e.rf;t  rfoJ 
»  ©n^   ax  aoi^-r'^om-j'^'x   srfT   .swo   a±rf  ;fop   ©f{;t 

xf;Jiw  "jeYo  xe'iu«^m   ©fid"    fce7fl''<;t   .i^g  it«f(ct    ©lerf   f 
S'^w  b-x^ws-x   ©rf^  x©;t^«  \^II'*L-fei:Tx£)fil   sio-JoetJ 
£)«rf  s^eoxlTiO  a 'iIiiM   ©xftJ-   j-orf;t  i^elo  si    :t.f   os 
g.^,'-^   ■'■■-'    '^ornrrss'"-   -'   '*-^'-    >"-,..-,   'leJ'io  ©rfo'  to  ©-gbe 

.:f|    &©J 


Ch.  4)  CREATION  OF  THE  RELATION  99 

If  they  were  personally  cognisant  of  the  offer  made  by  the  cashier, 
it  was  their  duty  to  call  a  meeting  of  the  board  and  disavow  the  act, 
if  they  were  unwilling  that  the  bank  should  be  bound  by  it.  It  would 
be  unjust  to  permit  the  plaintiff  to  spend  his  time  and  money  for  the 
detection  of  the  thief,  on  the  faith  of  the  promised  reward,  and  then 
to  repudiate  the  offer,  as  unauthorized,  when  he  had  succeeded  in 
apprehending  the  thief  and  restoring  to  the  bank  the  stolen  securities 
found  on  his  person.  The  question  of  the  bank's  liability  for  the 
reward  turns  on  the  fact  of  notice  and  acquiescence.  If  the  evidence, 
tending  to  show  that  the  directors  had  notice  of  the  offer  and  that 
they  acquiesced  in  it,  was  sufficient  to  establish  the  fact,  if  believed, 
the  case  should  have  been  permitted  to  go  to  the  jury.  We  think  that 
the  evidence  was  sufficient,  and  that  it  should  not  have  been  withheld 
from  them. 

It  tended  directly  to  show  that  the  cashier  offered  the  reward  at 
the  instance  of  one  of  the  directors,  and  upon  his  suggestion  that  "the 
directors  would  bear  him  out  in  it,"  and  that  the  offer  was  made  in 
the  presence  of  three  of  the  directors;  and  that  the  plaintiff  "sep- 
arately met  all  the  directors  and  talked  the  matter  over  with  them," 
with  the  exception  of  William  Davis,  Jr.  If  so,  can  there  be  any 
doubt  that  the  evidence  showing  the  directors'  knowledge  of  the  oft"er 
was  sufficient  to  go  to  the  jury?  In  a  town  like  Meadville  it  could 
hardly  have  happened  that  the  bank  should  have  been  robbed  of  so 
large  an  amount  and  that  a  reward  should  have  been  oft'ered  by  the 
cashier  for  the  detection  of  the  thief,  and  telegraphed  to  the  police 
headquarters  at  Cleveland,  Erie  and  Pittsburg,  without  the  fact  being 
known  to  almost  the  entire  community.  And  if  so,  the  directors  must 
have  been  informed  of  it.  But  whether  so  or  not,  the  evidence  touch- 
ing the  question  was  amply  sufficient  to  go  to  the  jury.     *     *     * 

Judgment  reversed,  and  a  procedendo  awarded. *° 

*o  See,  to  the  same  effect.  Moody  &  :Meckell)iirg  Co.  v.  Trustees  of  M.  E. 
Church,  99  Wis.  49,  74  N.  W.  572  (ISOC).  citing  Mechem  on  Agency,  §§  158,  167 ; 
also  Oregon  Ry.  Co.  v.  Oregon  Ry.  &  Nav.  Co.  (C.  C.)  28  Fed.  505  (1886),  and 
cases  tliere  cited. 

Ratification  by  Corporations. — That  a  municipal  corporation  can  ratify 
an  unautiiorized  action  of  its  agents,  whieli  tlie  corporation  could  in  the  first 
instance  have  authorized,  was  lichl  in  Hell  v.  Waynesboro  Borough.  195  Pa. 
299,  45  Atl.  9.''>0  (1900).  Rut  this  is  only  possible  when  the  party  ratifying 
I)ossessed  the  power  to  perform  the  act  ratified.  A  board  of  supervisors,  with 
no  power  to  vote  or  issue  bonds  without  a  vote  of  the  county,  cannot  there- 
fore ratify  a  subscription  without  a  vote  of  the  county,  because  they  could 
not  make  a  subscription  in  the  first  Instance.  Marsh  v.  Fulton  County,  30 
Wall.  676,  19  L.   Ed.   1040  (1870). 

And  tlie  state,  ui)on  the  same  principles  as  an  individual,  may  ratify  a 
contract,  either  by  formal  act  of  (he  Legislature.  State  of  Wisconsin  v.  Tur- 
inus,  26  Minn.  1,  49  X.  W.  259.  M7  Am.  Rep.  .■J95  (1879);  or  by  acquiescence 
by  the  Eeglslature  after  full  knowledge  of  the  terms  of  the  unauthorized  con- 
tract, and  enjoyment  of  tiu'  l)enelits  of  it,  .Jewell  Nursery  Co.  v.  State,  5  S. 
I).  (!2:',,  59  X.  W.  1(J25  (1894).  The  ratification,  to  be  effective,  nuist  l)e  made 
by  tlie  same  agency  of  the  state  which  would  have  had  original  power  to  do 
the  act.     State  of  Ohio  v.  Ex'r  of  Buttles,  li  Ohio  St.  .'509  (1854). 


100  THE   RELATION  (Pa-^t  1 

TRUDO  V.  ANDERSON. 
(Supreme  Court  of  Michigan,  1S62.    10  Midi.  357,  81  Am.  Dec.  795.) 

Trudo  left  his  horse  with  one  McAlister  to  be  sold.  While  McAlis- 
ter  was  absent,  his  employe,  Miller,  exchanged  it  for  another  horse. 
McAlister  suspected  that  this  other  horse  was  stolen,  which  was  the 
fact,  but  nevertheless  sold  him  conditionally  to  one  Gleason.  An- 
,  derson  loaned  $30  to  the  party  who  had  traded  for  plaintiff's  horse, 
.j  taking  the  horse  as  security.  Plaintiff  now  brings  replevin.  Judgment 
for  the  defendant. 

Christiancy,  J.*^  [After  ruling  on  a  matter  of  jurisdiction:] 
*  *  *  The  Court  found  as  a  fact  that  the  plaintiff,  in  July,  1860, 
was  the  owner  of  the  horse  in  question;  and  to  warrant  the  judg- 
ment in  favor  of  the  defendant,  it  must  appear,  first,  that  the  prop- 
erty, or  the  plaintiff's  right  of  possession,  had  been  divested,  or  second, 
we  must  be  satisfied  that  the  Court  below  was  right  in  holding  that 
a  demand  of  the  property  was  necessary  before  the  institution  of  the 
suit.  To  authorize  the  judgment  on  the  first  ground  the  Court  must 
have  found,  as  a  fact,  the  ratification  by  the  plaintiff  of  the  exchange 
made  by  the  servant  of  his  agent,  and  of  the  subsequent  conditional 
sale  by  McAlister  of  the  horse  received  in  exchange;  for  the  simple 
authority  of  McAlister  to  sell  the  horse  for  the  plaintiff  would  not 
have  authorized  the  exchange  if  made  by  McAlister  himself,  much  less 
when  made  by  his  servant ;  and  the  conditional  sale  of  the  horse  re- 
ceived in  exchange  could  in  no  way  bind  the  plaintiff,  unless  ratified 
and  adopted  by  him.  But  while  the  finding  sets  forth  the  particular 
facts  and  circumstances  in  evidence  with  more  particularity  than  nec- 
essary, and  is  therefore  thus  far  more  in  the  nature  of  evidence  than 
of  a  finding  of  facts,  it  fails  entirely  to  find  directly  the  fact  of  rati- 
fication, or  any  fact  or  state  of  facts  which  would,  in  law,  constitute 
such  ratification.  Certain  facts  are  set  forth  in  reference  to  a  condi- 
tional sale  made  by  McAlister  of  the  horse  received  by  his  servant 
in  exchange  for  the  plaintiff's  horse ;  but  these  facts,  though  probably 
with  others  considered  by  the  Judge  as  circumstances  tending  to  the 
proof  of  ratification,  cannot  be  treated  as  a  finding  of  that  fact  by 
the  Court.  If  admissible  and  sufficient  to  authorize  the  inference  of 
ratification,  they  were  certainly  no  more  than  mere  evidence,  and 
it  was  for  him  to  draw  the  inference.  A  finding  of  facts  should  set 
forth  the  facts  found,  not  merely  the  evidence  tending  to  prove  them. 
Upon  a  special  verdict  the  Court  can  draw  no  mere  inference  of  fact 
which  the  jury  have  failed  to  draw  from  the  evidence.  But  we  see 
nothing  in  this  evidence  which,  without  other  facts  not  found,  could 
even  tend  to  the  proof  of  ratification;  as  the  plaintiff  himself  does 
not  appear  to  have  had  any  connection  with  the  conditional  sale,  nor 
even  to  have  been  informed  of  it,  either  before  or  after  the  transaction. 

41  Part  of  the  opinion  is  omitted. 


Trudo  y.   Anderson, 
cts : 

Ptf .  left  his  horse  with  one  McAlister 
0  "be  sold,  '..■hile  Ivic.  was  absent.  His  employee 
xch'^'nged  it  for  another  horse.  McAlister  suspect- 
d  the  horse  w«s  stolen,  but  neverthless  sold  him 
ondition'=lly  to  one  Gle^son.  Def.  loaned  some 
oney  to  the  r)f>rty  who  had  tr'=5ded  for  ptf's.  horse 
pking  the  horse  «s  security.  Ptf*  now  brings 
eT)levin. 
urt : 

It  is  n^t  shown  here  th'^t  lotf.  knew  of  thi 
5ndition*^l  F^le  by  McAlister.  rieither  is  there 
vldence  tend  lag  to  show  th^t  rtf.  r<-^tified  I.Ic- 
lister's  unauthorised  exchange  of  his  horse, 
a  "ffent  cannot  ratify  ^-n  '^ct  done  bj?-  himself  or 
i.F  Ferv«^nt,  r-E  w^b   the  c^se  here,  beyond  the 
fo^e  of  the  Bgency,  so  as  to  bind  the  prineiT)al. 

VERDICT  FOR  PTF. 


ledslLAoll  eno     dilw  esioti  Qld  [Tl-el   .IrtT^ 

e0-^olqm6   slH  ,  cfneacfB  a^w  «oM  ©XlffVT  .  6Ioa 

-doeasifs  it©"JaiIAoM  #eaioii  'xsrfJtofiB  10^   j'i    6630 

mxr'   bios   saelrf^fxeven  ^tird"   ,neIo;ta   s»w  ©a-xorf  e 

9mo8  bensol  .lea  .noa'^elO  eno  oj  Y-^-T^'^olit 

eeioif  *a'l*cf  toI   beB-.-xit    5.Bif  orh"  ^^ii^rr^ed^   oi  ■ 

•  niY 

id^  lo   wen^i   .I'Jp   o"^;:[^   ©i©rf  rrworfa   ;trn   31    dl 

sierfd    ai   i©rl;fie-:    ,t©^3iIAoM  ^cT   ol^a   I«^xiolt 

-oM  belHt^i   .t'^rr  ;^^->rf;t   woffa   oit   -Riniftn©:?  9on 

•  ©axoff  alrf  1:o   e^n.Tiox©    besiiorfitir^n;/  a'le 

10  ll6ainlr{  ^.rd   »nob  io^  n«  'r1:l;ti^i    itonn^o   :tn© 

©xf"J    Sno^scf    ,©T:e:{  ©3'=»o   erf^t   a^w  a^    ,;tn''vie 

•  lBori©nlicf  ed^    baid  oi    B<^  oa    ^vone-^B  edi  Jo 


Ch.  4)  CREATION  OF  THE  RELATION  101 

And  an  agent  cannot  ratify  an  act  done  by  himself  or  his  servant  be- 
yond the  scope  of  the  agency,  so  as  to  bind  the  principal :    otherwise 
an  agent  might  enlarge  his  own  powers  to  any  extent  without  his 
principal's  consent.     *     *     * 
Judgment  reversed.*^ 


(B)  Knowledge  of  Pacts 
VALLEY  BANK  OF  PHCENIX  v.  BROWN. 

(Supreme  Court  of  Arizona,  1905.     9  Ariz.  311,  83  Pac.  362.) 

Appeal  from  a  judgment  of  the  District  Court  in  favor  of  the  plain- 
tiff and  appellee. 

Campbell,  J.*^  Plaintiff  below,  appellee  here,  was  a  depositor  of 
the  defendant  bank.  In  December,  1902,  the  bank,  by  its  president 
and  manager,  drew  a  check  for  $1,000  against  plaintiff's  deposit,  and 
loaned  that  sum  to  one  L.  D.  McClure,  taking  a  promissory  note  pay- 
able to  plaintiff",  due  in  one  year,  and  bearing  interest  at  the  rate  of 
10  per  cent,  per  annum.  McClure  was  a  retail  druggist,  carrying  on 
business  in  the  city  of  Phoenix.  As  collateral  security  for  the  loan, 
he  pledged  a  warehouse  receipt  for  whisky  in  bond  in  Kentucky,  and 
agreed  to  set  apart  a  portion  of  his  stock  of  goods,  to  be  held  by  one 
F.  H.  Lyman,  his  attorney,  as  receiptor.  The  warehouse  receipt  was 
of  small  value.  The  goods  to  be  set  aside  inventoried  $1,042.07.  A 
large  part  of  them  were  of  a  perishable  character.  Mr.  Lyman  re- 
ceipted for  the  goods,  and  saw  some  of  the  goods  segregated  from 
the  stock,  but  was  not  requested  by  the  bank  to  check  them  over,  nor 
did  he  do  so,  nor  was  he  requested  to  exercise  more  than  a  nominal 
control  over  them;  the  actual  custody  and  control  remaining  in  Mc- 
Clure. There  was  a  verbal  agreement  between  McClure  and  the  bank 
to  the  effect  that,  should  McClure  desire  to  use  any  of  the  goods  men- 
tioned in  the  inventory,  he  could  pay  the  bank  the  schedule  price  and 
take  them. 

About  one  month  after  the  loan  was  made,  plaintiff  was  called  to 
the  bank,  and  told  by  the  president  that  he  had  loaned  $1,000  of  her 
money  to  McClure  on  "gilt-edged"  security.  This  was  the  first  knowl- 
edge she  had  of  the  transaction.  She  was  not  told  the  nature  of  the 
security,  nor  the  manner  in  which  it  was  held.    Thereafter  McClure 

42  See,  also,  Bullard  v.  De  Groff,  59  Neb.  783,  82  N.  W.  4  (1900).  That  an  > 
agent  niav  ratify  the  unauthorized  acts  of  another  agent,  if  he  could  originally 
have  authorized  the  subagent  to  do  them,  is  held  in  U.  S.  Exp.  Co.  v.  Raw- 
son,  ion  Ind.  215,  6  N.  E.  337  (ISSG) ;  State  of  Ohio  v.  Ex'r  of  Buttles,  3 
Ohio  St.  309  (1S54),  But  if  such  original  authority  is  laclving,  then  the  first 
agent  cannot  bind  his  principal  by  a  ratification  of  the  acts  of  another  agent. 
Ironwood  Store  Co.  v.  Harrison  &  Green,  75  Mich.  197,  42  N.  W.  SOS  (1889). 
And  certainly  an  agent  has  no  power  to  ratify  his  own  unauthorized  acts. 
Britt  V.  Gordon,  132  Iowa,  431,  lOS  N.  W.  319  (190G). 

<3  Part  of  the  opinion  is  omitted. 


102  THE  RKLATioN  (Pari.  1 

paid  the  interest  monthly  to  plaintiff,  who  receipted  to  him  for  the 
same.  During  the  month  of  March,  1903,  the  cashier  of  the  bank 
suggested  to  plaintiff  that  she  had  better  look  over  the  securities  con- 
nected with  her  loan,  and  handed  the  papers  relating  to  them  to  her. 
These  papers,  with  the  exception  of  the  receipt  given  by  Lyman,  are 
not  in  evidence.  She  did  not  examine  the  papers,  but  returned  them  at 
once  to  the  cashier,  who  assured  her  that  the  securities  were  perfectly 
good.  All  of  the  papers  remained  with  the  bank.  Some  time  there- 
after, plaintiff  attempted  to  negotiate  a  purchase  of  real  estate,  and  told 
the  broker  of  the  McClure  note.  The  broker,  in  response  to  her  sug- 
gestion, and  with  a  view  to  accepting  the  note  if  satisfactory  in  part 
payment,  examined  the  note  and  securities,  and  declined  to  accept  it; 
merely  telling  her  that  the  note  was  not  satisfactory.  Shortly  before 
the  note  became  due,  McClure  failed  in  business.  Investigation  dis- 
closed that  of  the  goods  supposedly  set  aside  as  security  for  plain- 
tiff but  a  small  portion  remained.  During  this  investigation  plaintiff 
learned  for  the  first  time  the  precise  nature  of  the  goods  pledged,  and 
the  conditions  under  which  they  were  held.  Shortly  after  learning 
the  facts,  she  notified  the  bank  that  she  repudiated  the  act  of  the  bank 
in  making  the  loan,  tendered  the  interest  she  had  received,  offered 
to  indorse  the  note  to  the  bank  without  recourse,  and  demanded  pay- 
ment of  the  $1,000.  The  bank  refused  payment,  and  this  action  was 
brought. 

The  principal  question  requiring  our  attention  is,  did  the  plaintiff 
ratify  the  Action  of  the  bank  in  making  the  loan  under  such  circum- 
stances as/ to  be  binding  upon  her?  The  principles  of  law  involved 
are  clear,  i  "No  doctrine  is  better  settled,  both  upon  principle  and  au- 
thority, thaii  this,  that  the  ratification  of  an  act  of  an  agent  previously 
unauthorized  must,  in  order  to  bind  the  principal,  be  with  full  knowl- 
edge of  all  the  material  facts.**  If  the  material  facts  be  either  sup- 
pressed or  unknown,  the  ratification  is  treated  as  invalid,  because 
founded  in  mistake  or  fraud."  Owings  v.  Hull,  9  Pet.  607,  9  L.  Ed. 
246. 

\     ■  Speaking  through  Chief  Justice  Bigelow  in  the  case  of  Combs  v. 

^  Scott  et  al.,  12  Allen,  493,  the  Supreme  Court  of  Massachusetts  say: 

"Ratification  of  a  past  and  completed  transaction,  into  which  an  agent 
lias  entered  without  authority,  is  a  purely  voluntary  act  on  the  part 
of  the  principal.  No  legal  obligation  rests  upon  him  to  sanction  or 
adopt  it.  No  duty  requires  him  to  make  inquiries  concerning  it. 
Where  there  is  no  legal  obligation  or  duty  to  do  an  act,  there  can  be 
no  negligence  in  an  omission  to  perform  it.  The  true  doctrine  is  well 
stated  by  a  learned  text-writer:  'If  I  make  a  contract  in  the  name  of 
a  person  who  has  not  given  me  an  authority,  he  will  be  under  no  obli- 
gation to  ratify  it,  nor  will  he  be  bound  to  the  performance  of  it.' 
1  Livermore  on  Agency,  44.     See,  also,  Paley  on  Agency,  171,  note 

44  See  especially  the  opiuion  of  Brewer,  J,,  in  First  National  Bank  v.  Drake, 
29  Kan.  311,  44  Am.  Rep.  646  (1SS3). 


Y^llej   Bpnk  of  Phoenix  v.  Browii. 
cts:  — 

Ptf.  here  h«d  a  deposit  with  def.  h^nk. 
if,   without  her  knowledge  or  consent  drew  « 
^eck  on  her  acct,,  pnd  loaned  the  arat .  thereof 
)  one  McClure,  One-fflen%h-i»%er  taking  f='S   secur- 
ty  therefor  «  perishable  stock  of  drugs  of 
^upI  v«lue,  which  remained  in  the  rossession  of 
jClure.  The  b«nk  failed  to  exert  more  th«=n  «  nom- 
lel  control  over  them,  and  seemed  to  h^ve  done 
)thing  to  safeguard  TDtf's.  interests.  Sometime 
iter  the  cashier  suggested  that  TDtf,  look  over 
le  securities  and  gave  her  the  papers  connected 
lerewith.  She  did  not  ex^^mine  the  papers  upon 
SBurance  by  the  cashier  th«t  the  security  w^s 
jrfectly  good.  Shortly  thereafter  McClure  failed 
I  business,  and  it  v/^s  discovered  th^t  none  of 
19  security  remained,  Be#T-a  Ptf.  notified  def. 
ipt  she  repudiated  their  ©ct  in  making  the  lo^n, 
id  demanded  ^layment ,  which  was  refused.      ^ 
irt :  ^/' 

Ptf.  w«s  careless  here  but  not  wilfully! 
^nor'^nt.  The  r'^tif ic-^tion  of  ^n  °ct  of  an  agt.^ 
■"^^ionslv  im^^ithorized  must^  in  order  to  bind  the 
:-iP'--I'^  be  ;'lth  full  knowler^pe  of  ^11  the  m^t- 
i  f^cts.  .'ere  w^s  no  such  knowledge  here. 


•  7[n«cr   ,^e5   r'r:tlw  ^tisocrsfe  .e    b^xi  oierf  .j:;ti 

o  weifc   ;tii08noo  to   e359lwoii^'  te;{   iiiodii 
loeierlit    ,  jtaii^  efi;t   bea^oL   &n'-^   ,,;^oob  lerf  no 

!to  a^xjiB  ^0  >[oo3s   eld'^dalTeq;   «  io5:eie 

^o  xiolBaeaaocr  ©n';t  nJt   beni^mdi  rfoirfw  ^©irlfv 

-men  °  xx«rf;t   eiora  i^iexe  o^   belip^'t  3fxi.Rcf  erfT   ,6 

enob  QY^d  oc    beiaees   5ns     raeifj'   levo  loid'no 

6xnl;t0fiio3   .aijaeie^^iil   .8'1:jq  bt^irge't^s  ot  ^ 

•xevo  :jrooI    ^Ha  i^d^   beiae-gs^'Q  xeldQPo  erfj 

5©ito9nrioo   ai6g»"^cf  eif^  len   0^.33   f)Xi.B  aei;txij;;o 

xjocfif  s^eq-Ba  ©d^   ©jctxaif^x©  d'on  £>if)  ©n'f-   •rf^x 

8^w  -\r:MijJ0©8   en'o    ct«if;t  T©xjcfs«o  ©xf;t  -^cf  ©on 

5©Ix«l   ©ixrIOoM     leilBe^edt  xLiiod^   .feoo^  -^11 

1:0   ©Kon  ^'^d^   6©i©voo8i:D  8«w  d'x   bns  ,a8©rrx 

.!©£)   bexlxtoa  •!f:i'S:  ft-r%*^S   .bsni'Rmei  ^*1t0o 

,n«oI   ©ii;t  ^nlii^m  xii   ^^D'^   ilerf^    f5  9;t*^x&ira©t   e^i 

,I)S8l1:©'x  i3«w  rfoxffw  ^driem'^^n-   bebiif^ni 

..^-33  HB  lo  ;to^  fl-^  ^0  nolif^^ol^x^f'T   srfT   .-in 
9ff}    Bnlcf  o'J  i®&t:o  nl    ^ifsxrfli   od'^it^--- n  vl"^  ■ 

.eterf  ©-aSsIwcnT^  rfous   on   s^'w  -.."        .3?n 


Ch.  4)  CREATION  OF  THE  RELATION  103 

'o.'  Whoever,  therefore,  seeks  to  procure  and  rely  on  a  ratification 
is  bound  to  show  that  it  was  made  under  such  circumstances  as  in  law 
to  be  binding  on  the  principal,  especially  to  see  to  it  that  all  material 
facts  were  made  known  to  him.  The  burden  of  making  inquiries  and 
of  ascertaining  the  truth  is  not  cast  on  him  who  is  under  no  legal  obli- 
gation to  assume  a  responsibility,  but  rests  on  the  party  who  is  en- 
deavoring to  obtain  a  benefit  or  advantage  for  himself.  This  is  not 
only  just,  but  it  is  practicable.  The  needful  information  or  knowledge 
is  always  within  the  reach  of  him  who  is  either  party  or  privy  to  a 
transaction  which  he  seeks  to  have  ratified,  rather  than  of  him  who 
did  not  authorize  it,  and  to  the  details  of  which  he  may  be  a  stranger. 
We  do  not  mean  to  say  that  a  person  can  be  willfully  ignorant,  or 
purposely  shut  his  eyes  to  means  of  information  within  his  own  pos- 
session and  control,  and  thereby  escape  the  consequences  of  a  ratifi- 
cation of  unauthorized  acts  into  which  he  has  deliberately  entered; 
but  our  opinion  is  that  ratification  of  an  antecedent  act  of  an  agent 
which  was  unauthorized  cannot  be  held  valid  and  binding  where  the 
person  sought  to  be  charged  has  misapprehended  or  mistaken  ma- 
terial facts,  although  he  may  have  wholly  omitted  to  make  inquiries 
of  other  persons  concerning  them,  and  his  ignorance  and  misappre- 
hension might  have  been  enlightened  and  corrected  by  the  use  of  dili- 
gence on  his  part  to  ascertain  them."  See,  also,  Story  on  Agency, 
§  243 ;  Wheeler  v.  Northwestern  Sleigh  Co.  (C.  C.)  39  Fed.  347 ;  1 
Am.  &  Eng.  Enc.  Law,  1190. 

The  trial  court  found  as  a  fact  that  the  plaintiff  was  not  informed 
as  to  the  character  or  value  of  the  securities,  and,  after  a  careful  con- 
sideration of  the  evidence,  we  are  not  prepared  to  say  that  it  was  not 
justified  in  so  finding.  A  lack  of  such  knowledge  is  a  material  circum- 
stance, and  a  ratification  without  it  is  not  binding,  unless  the  igno- 
rance resulted  from  willfulness  and  not  mere  carelessness.  The  in- 
ventory or  other  papers  concerning  the  collateral  held  by  the  bank, 
with  the  exception  of  Mr.  Lyman's  receipt,  are  not  in  evidence,  and 
we  cannot  say  how  much  information  plaintiff  would  have  acquired 
had  she  examined  them.  We  think  the  evidence  shows  the  plaintiff 
to  have  been  careless,  but  not  willfully  ignorant.*^     *     *     * 

Judgment  affirmed. 

45  But  if  the  i)i-iiicii»!il  takes  advantage  of  the  unauthorized  act,  he  cannot 
willfully  and  iiurposoly  shut  his  eyes  to  means  of  information  within  his  pos- 
session and  control,  and  seek  to  retain  the  lienefits  and  at  the  same  time 
repudiate  the  act.  Johnson  v.  O.cren,  lOl!  Minn.  S,  112  N.  W.  S94  (1907); 
Jones  V.  Atkinson.  CS  Ala.  107  (INSO).  citing  INIeehan  v.  Forrester,  52  N. 
Y.  277  (1S7:;).  If.  however,  he  accepts  money  lawfully  due  him,  with  no  knowl- 
edge that  it  is  tlie  proceeds  of  an  unauthorized  act  by  the  agent,  he  does 
not  hv  retaining  the  money  ratify  such  act.  Smith  v.  Tracy,  ?,G  N.  Y.  79 
(1807/;  Shull  V.  New  I'.irdsall  Co.,  15  S.  D.  8,  8G  N.  W.  (;54  (1901);  Thacher 
V  I'ray,  ll."'.  Mass.  291,  IS  Am.  Rep.  4S0  (187.3);  Lime  Hock  Bank  v.  riimi)ton. 
17  rick.  (Mass.)  1.59.  28  Am.  Dec.  28G  (18:55),  supra.  803,  holding  that  money 
having  no  earmarks  does  not  stand  on  the  same  grounds  as  chattels ;  Wiieeler 
V.  Northwestern  Sleigh  Co.,  .'!9  Fed.  PA7  (1889);    Hamlin  v.   Sears,  8-2  N.  Y. 


104  THE  RELATION  (Part  1 

MOYLE  V.  CONGREGATIONAL  SOCIETY  OF  SALT  LAKE 

CITY. 

(Supreme  Court  of  Utah,  1S97.     16  Utah,  69,  50  Pac.  806.) 

Action  by  Moyle,  as  assignee  of  the  Burton-Gardner  Company, 
against  the  defendant  for  $11,012.85,  alleged  to  be  due  for  work  and 
materials  in  building  the  defendant's  church  building.  The  original 
contract  was  with  Barber  &  Co.  Owing  to  dissatisfaction,  this  was 
assigned  by  the  consent  of  the  building  committee  to  the  Burton-Gard- 
ner Company.  It  was  claimed  by  the  latter  that  the  written  assign- 
ment was  made  merely  to  get  rid  of  Barber  &  Co.,  and  that  the  chair- 
man of  the  building  committee,  one  Hollister,  now  deceased,  made 
an  oral  agreement  with  the  Burton-Gardner  Company  to  complete  the 
church  and  be  paid  whatever  it  was  worth.  Plaintiff  claimed  that 
Hollister  had  ostensible  authority  to  make  the  oral  contract,  and  in 
any  case  the  society,  by  accepting  and  keeping  the  building,  had  rati- 
fied the  contract  and  was  bound  to  pay  in  accordance  with  it.  Judg- 
ment for  plaintiff  for  $6,801.84  and  interest. 

Minor,  J.  [After  stating  the  facts  and  holding  there  was  no  im- 
plied authority  in  Hollister  to  make  the  oral  contract:]  *  *  * 
The  trustees  authorized  the  building  committee  to  make  a  contract 
with  Barber  &  Co.  to  build  the  church  on  the  terms  stated  in  the  con- 
tract, and  with  no  other  persons.  Neither  the  trustees  nor  the  build- 
ing committee  ever  directed  any  contract  to  be  made  with  Burton  or 
the  Burton-Gardner  Company  to  build  the  church,  or  to  complete 
building  it,  except  that  which  grew  out  of  the  written  assignment. 
Nor  has  either  body,  or  any  member  of  it,  ever  knowingly  ratified  any 
contract  with  the  Burton-Gardner  Company  to  build  the  church.  Nor 
does  it  appear  that  either  of  the  bodies  representing  the  church,  and 
having  authority  to  speak  for  it,  or  any  member  of  it,  except  Hol- 
lister, had  any  notice  or  knowledge  of  any  verbal  contract  between 
Hollister  and  the  plaintiff  company  to  complete  the  church,  in  violation 
of  the  written  agreement  made  and  agreed  to  by  all  the  parties.  When 
completed,  the  church  paid  the  full  contract  price,  together  with  ex- 
tras, as  provided  for  and  agreed  upon  under  the  contract.  These  pay- 
ments were  mostly  made  to  Burton,  until  after  Hollister's  death,  and 
/  then,  by  the  direction  of  Burton,  they  were  paid  to  the  Burton-Gardner 
Company,  and  many  of  the  checks  passed  through  Mr.  Burton's  hands. 
It  is  well  established  that  the  ratification  of  an  unauthorized  act  of 
any  agent,  in  order  to  be  effectual  and  binding  on  the  principal,  must 
have  been  made  with  full  knowledge  of  all  material  facts ;  and  igno- 
rance, mistake,  or  misrepresentation  of  any  of  the  essential  circum- 
stances relating  to  the  transaction  alleged  to  have  been  ratified  will 

327  (1880);  Heinzerling  v.  Agen,  46  Wash.  390,  90  Pac.  262  (1907);  Marsh 
y.  Joseph  [1897]  1  Ch.  213,  66  L.  J.  Ch.  128,  75  L.  T.  Rep.  N.  S.  558,  45 
W.   R.  209. 


MOyle  V,  Congregational  Society, 
cts : 

Action  by  Moyle  as  assignee  of  Burton  Co,, 
gainst  def.  to  recover  some  11000. oo  alleged  to 
9  due   for  work  and  material  in  "building  the  def's 
hurch  building.  Contract  originally  was  with 
arber.  Owing  to  dissatisfaction,  the  contr'^ct  WPS 
ssigned  in  writing  to  Gprdiner  Co.  Latter  claims 
ti^t  the  written  assignment  w^s  made  to  get  rid  of 
t^rber,  and  that  the  chairman  of  the  building 
ommitte,  now  deceased,  m^^de  an  oral  agreement  witt 
ordner  Co.   to  complete  the  church  and  be  paid 
li^'tever  it  w«s  worth.  Ptf.  claims  that  def.,  by 
cceiDting  the  building  ^nd  keeping  it,  h'^d  r^^tifiec 
he   contract  m^de  by  the  deceased  chairman. 
art : 

There  w-s  no  implied  ruthority  to  make  this 
r*^!  contr'^c^.  There  was  no  r*"  tif  ic^tion  ^s  no  one 
lev.'  of  thip  or^l  contr- ct  exce^^t  the  m^n  who  m?=?de 
t,  '^nd  he  wp  un 'authorized .  There  was  no  knowledg( 
sre  of  ^11  the  ;>i'^teri^l  f^cts!  def.  p°id  the  full 
>atr^ct  -nrice  ur)on  the  completion  of  the  building 
sfp.  un'-voidrbl;-  benefitted  by  ptf's.  work  and 
'teri^ls,  but  it  does  not  follow  that  they  are 
i.^bTe  therefor.  The   work,  etc.,  cannot  be'segreg- 
ter)  from  the  remainder  and  returned  to  ptf. 

VERDICT  FOR  DSFS. 


ott   fee^allB  00.00011  emoa  ttevooei  o:^      ,^eB  ; 

3  "tab   ed^   -salbllud  al  I.'^lis-J -mii  baB  -^xov/  aol 

xijiw^'s'^.w  '^Ilwiixslio  itcr.x^fioO   .  gxiiblixjcf 

a*^w  to^a^iioo   ed^    ^xioi^oPlaJLit^BSib  o^  3islw0  , 

ami'-=Io  te^^?'^!   •oO  TecTibi^O  o^   3nl;^iaw  nl   5' 

lo   bi-i   c}©3  o^   ef>-^i  s-w  (tnemrralaaB  aeiili^  ©. 

;gnJfcf3li:xrcr  9f  afMiiai Brio   ed^   ^sdi   baa 

l;trw  ;?  ■  '  6  5'-ffl   ,f)©3A©oe£)  won   ,e 

bi  .ufi'.'..   e.f^    e d" 6 Iqra 00   o;t      .oO  ' 

Yd"   ,.l:eb  d«^r{j   8ml pIo   .1*^   .rfifiow  s^w  :H  i 

♦  n^mii^rio    f)»8-3©c«e6   ed'i   Tjcf  ©&om  :}"o^i:;f 

BXi-j    sii.dffl   oit   T2^xiorf;tn^-   bexinrni   on  S'^w  eterfT 

eno  on  a<^  rrox^t'^oiltxit^i   on  a^.w  9i»r^"T   .to^>i;tn 

e&Bffl  oiiw  n^ffl  edJ   ifnsoxs   d'o  i;)T[oo  I'^-to   -^.Mi 

^gbslwoiol  on  8i^w  ©TsnT   ,  be^iio dins'* nu  "S-^w  ©rf 

IIi;^   ©rf-i    hf^q  .^©5    Ta^to^-I:   I^^xi©;t^rri   ©rf;t   11''  ' 

gnibliircf   ©dj"  ^o  rsox ^©Iqstoo    ?'.c{;t  norrr  eolTCf   ;t 

bus  ^fiow  ,a'1:;tq   \;a    be^fixlsnecf    ild'^blov^n 

eiB  ijerf^   iBrf;t   wollo^   ton  a©o6  ;tx   ^i;cf   ,al 

-^©tsse   ©cf  itonn-'o    ,,ot©    ,iI'Xow  ©rfT    .TO^&T©n:t 

•  jt  ^  cr   '■*'  -    ""  '■^  ax xr ;!"  9 x    6 1 i  b  x  ^  ?■•  r :  *r  -^  r n  © f   ?  "'  j   rr:  o 


Ch.  4)  CREATION  OF  THE  RELATION  105 

absolve  the  principal  from  all  liability,  by  reason  of  the  supposed  adop- 
tion or  assent  to  the  prevvjusly  unauthorized  acts  of  the  agent.  Bald- 
win V.  Burrows,  47  N.  Y.  199;  Bennecke  v.  Insurance  Co.,  105  U. 
S   355,  26  L   Ed.  990;   Dupont  v.  Wertheman,  10  Cal.  354. 

And,  in  adopting  and  ratifying  what  the  principal  had  authorized 
the  agent  to  do.  he  was  not  adopting  and  ratifying  that  which  was 
unauthorized.  Smith  v.  Tracy,  36  N.  Y.  79.  We  are  satisfied  that  the 
church  did  not,  through  its  directors  or  building  committee,  ratify 
the  alleged  acts  of  Hollister.  It  is  true,  the  church  retains  the  struc- 
ture built  upon  its  real  estate ;  but  we  know  of  no  way  by  which  the 
alleged  work  performed  upon  the  church  building  can  be  segregated 
from  it,  and  returned  to  the  plaintiff.  It  does  not  follow  that  be- 
cause the  church  used  the  building  after  its  completion,  thereby  un- 
avoidably having  the  benefit  of  the  work  and  materials  furnished,  the 
church  would  therefore  be  liable  for  the  value  thereof.  Mills  v.  Berla 
(Tex.  Civ.  App.)  23  S.  W.  910 ;  Baldwin  v.  Burrows,  47  N.  Y.  199. 
We  are  of  the  opinion  that  the  plaintiff  offered  no  valid  testimony  to 
show  that  Mr.  Hollister  had  authority  to  bind  the  defendant  by  the 
alleged  parol  contract.  Nor  was  there  any  ratification  of  his  alleged 
acts  in  that  respect  by  the  church,  building  committee,  or  trustees  of 
the  church,  shown.  The  alleged  verbal  contract  varies  and  contradicts 
the  written  contract  and  assignment  by  which  the  parties  were  bound, 
and  that  testimony  concerning  the  verbal  contract  with  Hollister  was 
improperly  received  in  evidence,  and  should  have  been  stricken  out  on 
defendant's  motion  at  the  close  of  plaintiff's  case.*®     *     *     * 

Reversed  and  remanded. 


THOMPSON  V.  LABORINGMAN'S  MERCANTILE  &  MFG.  CO. 

(Supreme  Court  of  Appeals  of  West  Virginia.  190G.     60  W.  Va.  42,  53  S.  E, 
908,  6  L.  E.  A.  [N.  S.]  311.) 

Action  by  Thompson  on  a  note  for  $382.39,  signed  "Laboringman's 
M.  &  M.  Co.,  P.  M.  Murphy,  Pres."  Judgment  for  plaintiff.  Re- 
versed and  judgment  for  defendant. 

PoFFENBARGER,  J.*^  [After  Stating  the  facts :]  *  *  *  It  is  not 
pretended  that  Murphy  had  any  inherent  authority  or  power  as  presi- 
dent to  borrow  money,  and  execute  the  company's  note  therefor.  That 
such  authority  is  not  possessed  by  the  president  of  a  corporation,  in 
the  absence  of  an  express  delegation  thereof,  has  been  determined  by 
this  court.  Bank  v.  Kimberlands,  16  W.  Va.  579;  Third  National 
Bank  v.  Laboringman's,  etc.,  Co.,  56  W.  Va.  446,  49  S.  E.  544.  Nor 
is  it  pretended  that  he  had  any  antecedent  express  authority  from  the 
board  of  directors  to  so  bind  the  corporation. 

*o  Other  parts  of  this  ophiion  are  found  post,  pp.  342,  841. 
*''  I'urt  of  the  opinion  is  omitted. 


^y 


106  THE  UELATioN  (Part  1 

The  judgment  rests  upon  two  propositions,  the  first  of  which  is 
that  there  is  evidence  which  would  justify  a  finding  that  the  defend- 
ant, with  full  knowledge,  allowed  Murphy  to  so  act  and  deal,  in  re- 
spect to  its  business,  as  to  constitute  a  representation  to  the  public 
of  authority  in  him  to  borrow  money  on  its  account.  The  facts  re- 
lied upon  to  sustain  this  proposition  are  of  the  same  character  as  those 
set  up  in  Third  National  Bank  v.  Laboringman's,  etc.,  Co.,  and,  in 
that  case,  they  were  deemed  and  held  wholly  insufficient  for  that  pur- 
pose. They  were  almost  contemporaneous  in  date  with  the  transac- 
tion with  Thompson.  It  does  not  appear  that  he  had  any  knowledge 
of  but  one  such  transaction,  namely,  the  first  one  had  with  George 
B.  Thompson.  Nothing  in  the  testimony  indicates  that  the  directors 
,  of  the  corporation  had  any  knowledge  of  this  transaction  subsequently 

\^  had  with  George  B.  Thompson,  or  the  one  had  with  W.  W.  Golightly. 

In  the  absence  of  any  knowledge  of  these  facts  on  the  part  of  the 
board  of  directors,  there  is  no  foundation  for  saying  the  corporation 
held  Murphy  out  to  the  public  as  an  agent  authorized  to  borrow  money 
for  use  in  its  business.  A  verdict  of  a  jury,  predicated  upon  such 
testimony,  could  not  be  sustained,  and  therefore  the  evidence  is  clearly 
insufficient  upon  a  demurrer  thereto. 

The  other  view  is  that  of  ratification  of  the  unauthorized  act  of  the 
president.  There  is  no  claim  of  an  express  ratification.  The  con- 
tention is  that  it  is  a  ratification  by  acquiescence  and  retention  of 
benefits.  As  noted  in  the  statement  of  the  evidence,  it  does  not  appear 
that  the  account  which  was  set  off  against  the  note  at  the  time  of  its 
execution  was  due  from  the  defendant  company.  Mr.  Thompson's 
evidence  goes  no  further  than  to  say  it  was  so  represented  to  him  by 
Murphy,  and  he  acted  upon  that  information.  Whether  the  company 
received  the  benefit  of  the  check  given  for  the  balance  of  the  note 
does  not  in  any  way  appear  from  the  evidence.  The  alleged  recep- 
tion of  benefits  stands  wholly  upon  the  representations  made  to  Mr. 
Thompson  by  Murphy.  The  check  is  not  produced,  so  as  to  show 
whether  it  was  payable  to  Murphy  individually  or  to  the  defendant, 
nor  if  payable  to  the  defendant,  whether  it  was  deposited  to  its  credit 
or  cashed  by  Murphy  and  the  money  used  by  him.  Starting  with  the 
admitted  fact  that  the  act  of  Murphy  in  borrowing  this  money  was 
outside  of,  and  beyond,  his  authority,  it  would  be  contrary  to  legal 
principles  to  say  that  his  representations  or  acts,  relating  thereto,  are 
binding  upon  the  company.  What  he  said  as  well  as  what  he  did  was 
beyond  the  scope  of  his  authority,  and  it  is  well  settled  that,  only  such 
acts  and  declarations  of  an  agent  are  binding  upon  his  principal  as 
were  done  and  made  within  the  scope  of  his  authority.  Had  said  sum 
of  $200  been  a  debt  due  the  defendant,  it  may  be  that  it  could  have 
been  rightfully  paid  to  its  president.  This  we  do  not  decide.  But  it 
was  borrowed  money.  The  acquisition  of  it  was  an  unauthorized  act, 
and  the  custody  of  it  was,  therefore,  necessarily  not  on  behalf  of  the 
principal.     Hence,  the  agent's  possession  of  it  raises  no  presumption, 


Thompson  v,  L^boringman' s  Mero.  Cp. 
cts : 

Action  on  a  note  signed  by  Def,  Co.  by 
ts  president.  There  is  no  evidence  to  show  th^t 
he  president  h^d  authority  to  borrow  money  and 
xecute  the  Go's,  note  therefor,  either  inherent 
r  antecedent  express  fjpom  the  board  of  directors 
0  so  bind  the  def .  corporation.  Ptf.  maintains 
bat  ratification  of  the  president's  ?-^uthorized 
ct  may  be  implied  from  the  def*s.  acquiescence 
nd  retention  of  the  benefits, 
urt : 

The  retention  of  benefits  is  not  essential 
to  make  a  ratification  good.  There  was  a 
ilence  here  on  the  part  of  defs.  from  which  a 
Ptific-'^tion  could  be  inferred,  if  all  the  materia] 
Rcts  pertaining  to  the  transaction  had  been  known 
0  them.  "But  here  all  the  material  facts  were  not 
nown,  nor  w^s  the  money  obtained  appropriated  to 
heir  use,  T  t  is  not  shown  th'^t  -ntf.  ^t  ^ny  time 
ol<3  def'p.  officers  *^nythins:  concerning  the  tr'^ns- 
ction  in  'uestion  • 

VEHDICT  FOR  DEFS. 
Kelle.  V.  Hew. 


^cT  .00   .^ad  ^cf   bdfisxci   s^on  &     no  noi;^oA 
^^rfif  worfe   o-i   eoaehlve  on  sx   eierfT   .^^nebieei 
6nB  Y©com  wo-x/cocf  oi   ^^^ Jtio d"^ l' -^   &^x{     t^nefiiBei 

anorfoe'xxfc  "^o   biriocT  erf^  mo^l   38»iqxe  ;tn©beoe;j 
8x1  J:  ^ iTix  «m   ,x:tg:   .aoivt^.i.oqioe)   .^©6   erf;t   bnicf 
fcssixorf:t.ui^.  3^;fn®6x8eT(T  ©xfit  ^o  iioi:;tijollx^£'j 
$oneo8©xxr-^oB  ,a'l95   ed^  moil   fceHqmi   ©cf  ^i 

.a^x^sixecf   ©riit  lo  flOl;^n©:?« 

lBi;rn©fc^:vi     .,^,.1  c..    3;txl-sfl©d'  ^o  noxone^t©!   ©ifT 
B  a.pw  ©leilT  •£oos  aol^^poi^xd-st  b  eils^m  0^ 
B  rfoxrfvi/  ffioil   •83:©b  lo   ^iBg  ©xfit  no   ©T©ff  ©j 
CBit©;tBm  ©rfif  IIb  ^J:   ,  fcsitelni   ©d"  blssoo  aoii'^^Qi 
nwoiiTC  nescT   5Brf  noi^opsn^id   ©rfj    o:t  gnxnlrt-^idq 
t^Oi-   ©T6W  a^o^"!  Xtu~i©it.p^m  ©i-fj-  IIb  ©lerf  in^  .m< 
oJ'   5©u  ^t'iqoiqq"«   h&£iiBi6o  ^^©nofli   ®dt   8rw  inn   , 
einxo   v,n'^  ;f?^   ♦Id'n-  ^«ri"^  nwoifs   ton  ax   ;t   T   .©3jt 
-axi^i;t   ©rf;t  snifrisonoo  ^fxiif#^fli«  S'laox'^^o   ,B*t©J 

.s'^aa  go's  ToioHSY 

.V    v©II©X 


Ch.  4)  CREATION  OF  THE  RELATION  107 

and  lays  no  foundation  for  an  inference,  that  the  principal  received 
the  benefit  of  jt.     *     *     * 

This  may  not.  however,  be  conclusive  of  the  case.  A  principal  may 
ratify  the  unauthorized  act  of  his  agent  without  having  received  the 
benefit  thereof.  It  may  be  that  the  defendant  did  receive  the  money 
notwithstanding  the  lack  of  evidence  here  to  show  that  fact.  The 
authorities  do  not  seem  to  hold  the  reception  of  benefits  to  be  an  es- 
sential element  of  ratification.  Nor  is  any  reason  perceived  why  it 
should  be.  It  is  necessary,  therefore,  to  consider  the  other  evidence 
relied  upon  to  show  ratification.  This  consists  of  the  silence  of  the 
defendant  from  March  or  April,  1901,  when,  it  is  claimed,  the  note 
was  brought  to  the  attention  of  the  general  manager  and  one  or  more 
of  the  director§.  until/the  5th  of  September,  1901,  a  period  of  probably 
five  or  six  months.  ("Where  an  agency  actually  exists,  the  mere  ac- 
quiescence of  the  principal  may  well  \i\e  rise  to  the  presumption  of 
an  intentional  ratificatib«^  of  the  act."  jStory  on  Agency,  §  256.  The 
authorities  almost  uniformly  say  that/  acquiescence  after  knowledge 
of  an  unauthorized  act  is  evidence  of  ratification,  and  such  acquies- 
cence need  not  be  for  any  considerable  length  of  time.  What  length 
of  time  will  depend  upon  the  nature  of  the  transaction  and  the  situ- 
ation of  the  parties  afifected  or  interested.  "Silence  of  the  alleged 
principal,  when  fully  advised  of  what  has  been  done  in  his  behalf  by 
one  who  attempts  to  act  as  his  agent  without  authority,  may  be  suf- 
ficient from  which  to  infer  a  ratification  of  the  unauthorized  act." 
Lynch  v.  Smyth,  25  Colo.  103,  54/Pac.  634;  King  v.  Rea,  13  Colo.  69, 
21  Pac.  10S4;  Union  M.  Co.  v/Bank,  2  Colo.  248;  Bank  v.  Fricke, 
75  Mo.  178,  42  Am.  Rep.  397.  ("Where  the  relation  of  principal  and 
agent  exists,  but  in  the  particular  transaction  the  agent  has  exceeded 
his  authority,  an  intention  to  ratify  w'yW  be  presumed  from  the  silence 
of  the  principal  beyond  a  reasonable/time  after  having  knowledge  of 
the  transaction,  if  he  has  an  opportunity  to  express  his  dissent."  Mc- 
Geoch  v.  Hooker,  11  111.  App.  649.  i  "It  is  a  salutary  rule,  in  relation 
to  agencies,  that  when  the  principal  i^informed  ofWhat  has  been  done, 
he  must  dissent,  and  give  notice  in  a  reasonable  tirie,  or  otherwise,  his 
assent  to  what  has  been  done  shall  be  presumed."  A^airnes  v.  Bleecker, 
12  Johns.  (N.  Y.)  300.  To  the  same  effect,  se4  Bredin  v.  Dubarry, 
14  Serg.  &  R.  (Pa.)  30;  Fuel  Co.  v.  Lee,  102  Wis.  426,  78  N.  W. 
584;  McLaren  v.  Bank,  76  Wis.  259,  45  N.  W.  223;  Hoosac  M.  & 
M.  Co.  V.  Donat,  10  Colo.  529,  16  Pac.  157;  Breed  v.  Bank,  4  Colo. 
481;  Smith  v.  Fletcher,  73  Minn.  189,  77  N.  W.  800;  Sheldon,  etc., 
Co.  V.  Eickemeyer,  etc.,  Co.,  90  N.  Y.  607;  Alexander  v.  Cauldwell, 
83  N.  Y.  480;  Phillips  v.  Lumber  Co.,  130  Cal.  431,  62  Pac.  749; 
Bank  V.  Railway  Co.,  117  Cal.  332,  49  Pac.  197;  4  Thomp.  Corp. 
§§  5286,  5288. 

Occasionally  a  case  is  found  which  seems  to  conflict  with  the  prop- 
osition just  stated.  Thus,  in  Railway  Co.  v.  Jay,  65  Ala.  113,  the  court 
^eems  to  have  inclined  to  the  view  that  silence  and  acquiescence,  after 


108  THE  RELATION  (Parti 

knowledge  received,  is  not  evidence  of  ratification,  and  that  no  duty 
rests  upon  the  principal  to  disavow  the  unauthorized  act  of  his  agent, 
unless  the  party  dealing  with  the  agent  would  be  misled  to  his  injury 
by  failure  to  repudiate  the  act  properly  or  the  act  is  in  reference  to 
a  matter  as  to  which,  by  the  usage  of  trade,  a  prompt  reply  is  de- 
manded when  notice  is  given.  For  this  proposition,  Smith  v.  Sheeley, 
12  Wall.  358,  20  L.  Ed.  430,  and  2  Greenl.  Ev.  §  66,  are  cited.  2 
Greenleaf  on  Evidence,  §  67,  seems  to  assert  two  propositions,  the 
first  of  which  is  that  mere  silence  after  notice  of  an  unauthorized  act, 
with  full  knowledge  of  the  circumstances,  is  evidence  of  ratification, 
but  not  conclusive ;  and  the  second,  that  if  the  silence  of  the  principal 
is  contrary  to  his  duty,  or  has  a  tendency  to  mislead  the  other  party  to 
the  transaction,  it  is  conclusive.  As  an  instance  of  this,  the  rule  gov- 
erning transactions  among  merchants,  under  which  an  act  is  deemed 
to  be  assented  to,  after  the  lapse  of  a  reasonable  time  when  notice 
thereof  has  been  given  is  mentioned.  This  is  a  species  of  estoppel, 
rather  than  an  instance  of  ratification  by  acquiescence,  and  it  seems  to 
be  the  principle  which  rules  the  case  of  Smith  v.  Sheeley.  This  dis- 
tinction is  marked  in  other  cases.  See  Smith  v.  Fletcher,  75  Minn. 
189,  77  N.  W.  800;  Lynch  v.  Smyth,  25  Colo.  103,  54  Pac.  634;  Breed 
V.  Bank,  4  Colo.  481. 

That  acquiescence,  with  full  knowledge  of  the  material  facts  attend- 
ing an  unauthorized  act  is  evidence  from  which  a  ratification  may  be 
inferred,  when  no  element  of  estoppel  is  involved,  is  made  plain  by 
a  number  of  decisions.  Where  the  president  of  a  corporation,  with- 
out authority  of  the  board  of  directors,  sold  all  of  its  personal  prop- 
erty, and  the  purchase  money  was  garnished  in  the  hands  of  the  ven- 
dee by  a  creditor  of  the  corporation,  and  no  steps  were  taken  by  the 
debtor  corporation  either  to  affirm  or  repudiate  the  act  of  its  pres- 
ident, the  silence  of  the  corporation  was  held  to  be  sufficient  evidence 
of  ratification  of  the  unauthorized  sale.  Fuel  Co.  v.  Lee,  102  Wis. 
426,  78  N.  W.  584.  Where  officers  of  a  corporation,  without  author- 
ity, have  given  liens  upon  its  property  by  mortgage,  third  parties, 
such  as  unsecured  creditors,  cannot  impugn  the  transaction  on  the  sole 
ground  of  want  of  authority  in  the  officers.  Moller  v.  Fiber  Co.,  187 
Pa.  553,  41  Atl.  478;  Cooper  v.  Potts,  185  Pa.  115,  39  Atl.  824;  Rag- 
land  V.  McFall,  137  111.  81,  27  N.  E.  75.  In  these  cases  the  only  evi- 
dence of  ratification  is  the  mere  silence  and  acquiescence  of  the  prin- 
cipal. 

These  authorities  may  justify  the  position  of  counsel  for  the  ap- 
pellee in  saying  that  acquiescence  alone  is  evidence  of  ratification. 
The  books  assert  the  proposition  over  and  over  and  contain  numerous 
illustrations  of  it.  But  there  is  one  element  which  enters  into  it  that 
must  not  be  lost  sight  of.  When  the  circumstances  are  such  as  to 
call  for  the  application  of  the  law  of  estoppel,  rather  than  the  mere 
law  of  ratification,  it  may  be  that  the  principal  can  bind  himself  with- 
out full  knowledge  of  all  the  material  facts.     The  situation  may  be 


Ch.  4)  CREATION  OF  THE  RELATION  109 

such  as  to  make  it  his  duty  to  know.  The  means  of  knowledge  may 
be  at  hand  or  within  easy  reach,  and  his  relation  to  the  third  party 
such  as  to  estop  him  from  saying  he  is  without  knowledge.  But,  in 
the  absence  of  such  circumstances,  the  authorities  are  unanimous  in 
holding  that  there  can  be  no  ratification  by  acquiescence,  unless  the 
principal  has  full  and  complete  knowledge  of  all  the  material  facts 
attending  the  unauthorized  act.  "Any  ratification  of  an  unauthorized 
act,  in  order  to  be  made  effectual  and  obligatory  upon  the  alleged  prin- 
cipal, must  be  shown  to  have  been  made  by  him  with  a  full  knowledge 
of  all  the  material  facts  connected  with  the  transaction  to  which  it 
relates;  and  especially  must  it  appear  that  the  existence  of  the  con- 
tract and  its  nature  and  consideration  were  made  known  to  him." 
Mechem  on  Agency,  §  129i  "A  ratification  of  the  unauthorized  acts 
of  an  attorney  in  fact,  without  a  full  knowledge  of  all  the  facts  con- 
nected with  those  acts,  is  not  binding  on  the  principals.  No  doctrine 
is  better  settled  on  principle  and  authority,  than  this,  that  the  ratifi- 
cation of' the  act  of  an  agent  previously  unauthorized  must,  in  order 
to  bind  the  principal,  be  with  a  full  knowledge  of  all  the  material 
facts.  /If  the  material  facts  be  either  suppressed  or  unknown,  the  rat- 
ification is  invalid,  because  founded  on  mistake  or  fraud."  Owings 
V.  Hull,^  Pet.  (U.  S.)  607,  9  L.  Ed.  246. 

Want  of  such  knowledge  prevents  the  possibility  of  ratification  by 
silence,  and  it  invalidates  an  express  ratification,  as  will  be  clearly 
disclosed  by  an  examination  of  the  following  decisions :  Bosseau  v. 
O'Brien,  4  Biss.  395,  Fed.  Cas.  No.  1,667;  Fuller  v.  Ellis,  39  Vt. 
345,  94  Am.  Dec.  327 ;  Meyer,  Weis  &  Co.  v.  Baldwin,  52  Miss.  263 ; 
Forrestier  v.  Bordman,  1  Story,  43,  Fed.  Cas.  No.  4,945;  Bank  v. 
Bank,  13  Bush  (Ky.)  526,  26  Am.  Rep.  211;  Craighead  v.  Peterson, 
72  N.  Y.  279,  28  Am.  Rep.  150;  Reese  v.  Medlock,  27  Tex.  120,  84 
Am.  Dec.  611;  Bennecke  v.  Insurance  Co.,  105  U.  S.  355,  26  L.  Ed. 
990;  Lynch  v.  Smyth,  25  Colo.  103,  54  Pac.  634;  Smith  v.  Kidd,  68 
N.  Y.  130,  23  Am.  Rep.  157;  Bell  v.  Cunningham,  3  Pet.  (U.  S.)  69, 
7  L.  Ed.  606;  Ward  v.  Williams,  26  111.  447,  79  Am.  Dec.  385;  Nav- 
igation Co.  V.  Dandridge,  8  Gill  &  J.  (Md.)  248,  29  Am.  Dec.  543 ; 
Combs  V.  Scott,  12  Allen  (Mass.)  495;  Bank  v.  Tones,  18  Tex.  811; 
White  V.  Davidson,  8  Md.  169,  63  Am.  Dec.  699;  Bannon  v.  Warfield, 
42  Md.  23 ;  Bohart  v.  Obernc,  36  Kan.  284,  13  Pac.  388 ;  Bryant  v. 
Moore,  26  Me.  84,  45  Am.  Dec.  96;  McCants  v.  Bee,  1  McCord,  Eq. 
(S.  C.)  383,  16  Am.  Dec.  610;  Billings  v.  Morrow,  7  Cal.  171,  68  Am. 
Dec.  235. 

From  the  review  of  the  evidence  herein  given  and  conclusions 
stated  respecting  the  same,  it  is  plain  that  full  knowledge  of  the  ma- 
terial facts  relating  to  the  transaction  between  Murphy  and  Thomp- 
son is  not  shown  to  have  been  in  the  possession  of  the  defendant  cor- 
poration at  any  time  before  the  institution  of  this  action.  Mr.  Thomj)- 
son  docs  not  testify  to  any  statement,  on  his  part,  to  the  general  man- 
ager or  Mr.  Getty,  as  to  what  the  consideration  of  the  note  was.    Nor 


no  THK  ui;lation  (Parti 

is  there  aiiythingf  in  the  testimony  of  John  F.  Thompson  or  George 
B.  Thompson,  tending  to  show  th;il  tliey  revealed  to  any  threetor  the 
cireuinstanccs  whieli  eonstitnted  tlie  ground  for  executing  the  note. 
No  notice  was  given  of  the  satisfaction  of  the  Blackwater  Luniher 
Company  account  out  of  the  note,  or  tliat  the  resichie  of  it  was  rep- 
resented by  a  check  payable  to  the  corporation.  Nothing  in  the  evi- 
dence shows  that  any  record  in  the  bank  in  which  the  corporation  kept 
its  deposits,  or  on  the  books  of  the  corporation  itself,  discloses  the 
receipt  of  the  money,  or  its  appropriation  to  the.  use  of  the  defendant 
comjiany.  This  failure  to  bring  home  to  the  defendant  knowledge  of 
tht>  material  facts,  in  connection  with  its  silence,  makes  a  fatal  defect 
n  the  ca^e,  and,  therefore,  the  court  should  have  sustained  the  de- 
murrer to  the  evidence.''®     *     *     ♦ 

As  the  denuuTcr  to  the  evidence  should  have  been  sustained,  and 
no  error  has  been  shown  in  the  action  of  the  court  in  excluding  evi- 
dence offered,  the  judgment  must  be  reversed,  the  demurrer  sustained, 
and  judgment  rendered  here  for  the  defendant^  with  its  costs  in  the 
court  below,  as  well  as  costs  in  this  court. 


KELLEY  V.  NEWBURYPORT  & /A.  H.  R.  CO. 

(Supreme  Judicial  Court  of  Massachusetts,  1886.    141  Mass.  49G,  6  N.  E.  74.'5.) 

Action  upon  certain  promissory  notes.  Upon  a  verdict  for  plaintiff, 
defendant  alleged  exceptions. 

C.  Allen,  J.  The  first  ground  of  defense  is  that  by  virtue  of  St. 
1871,  c.  381,  §  6,  the  defendant  was  forbidden  to  build  its  road  until  a 
certificate  had  been  filed  in  the  office  of  the  secretary  of  the  common- 
wealth, signed  and  sworn  to  by  the  president,  treasurer,  clerk,  and  a 
majority  of  the  directors,  stating  that  the  whole  amount  of  the  capital 
stock  had  been  unconditionally  subscribed  for  by  responsible  parties, 
and  that  50  per  cent,  of  the  par  value  of  each  share  of  the  same  had 
been  actually  paid  into  its  treasury  in  cash.  It  appeared  by  the  audi- 
tor's report  that  such  a  certificate  was  filed  in  season,  but  he  received 
evidence  to  show,  and  found  as  a  fact,  that  50  per  cent,  of  the  par 
value  of  each  share  had  not  been  paid  in,  though  the  whole  of  the  cap- 
ital stock  had  been  duly  subscribed  for,  and  more  than  50  per  cent,  of 
the  whole  amount  of  it  had  been  paid  in  at  the  time  of  the  making  of 
the  contract  for  the  construction  of  the  road.  Under  these  circum- 
stances, the  defendant  contends  that  it  had  no  power  to  enter  into  a 

*8  See,  also,  Ladd  v.  Hildebrant,  27  Wis.  135,  9  Am.  Rep.  445  (1870),  liold- 
iiig  tliat  the  iirincipal  must  have  knowledge,  not  only  of  every  material  fact 
relatiuK  to  tln'  act  or  contract  allciicd  to  have  been  ratified,  hut  .-ilso  of  every 
fact  rcMuisite  to  cnahle  him  to  repudiate  it,  or  the  means  of  kno\vledf?e  must 
he  at  hand,  so  that  he  may  obtain  it,  or  it  shall  he  his  fault  if  he  does  not. 

The  principal  may  he  bound  where  he  had  not  full  knowledge,  if  all  the 
elements  of  estoppel  are  present.  Thompson  v.  Mfg.  Co..  supra,  p.  108  ;  I'oiie 
V.  .\rmsby  Co.,  Ill  Cal.  l.'jO,  4:j  Pac.  .^89  (181)0). 


'  (Lo 


F*cts: 

Action  uT)on  certain  r.otes.  The  clefs*  set 
UTJ  '^  defenre  th^t  they  h^d  no  x»ower  to  enter  into 
^   contr'^ct  for  the  construction  of  its  roPd  ;  th^t 
t'^.e  '^ct  w^E  ultr*^  vires-  thp t  therefore  ^11  TDromis- 
es  "-nd  notes   iven  to  -nry  therefore  were  void  «=nd 
inc-D^hle  of  r?^  tific-^ tion,  altho  the  ro«d  sohuilt 
h*!^  "been  used  by  them  for  ten  ye^rs,  interest  -D^id 
on  the  notes,  etc.  The  reason  '^ller-ed  for  their 
l^ck  of  power  w^s  th«t  they  did  not  hf=ve  the  requi- 
red omount  of  c^TDit*^!  stock  ■p'^id  in  °t  the  time  th( 
contr-^ct  w^s  m'^de,  ^s  rehired  by  st'^tute. 

Another  defense  is  th^t  the  notes  here 
were  .^iven  to  its  own  directors,  who  were  forced 
PS  sureties  to  complete  the  contract  unon  the  de- 
f*^ult  of  the  original  contractors,  ^nd  th«t  they 
rre  subject  now  when  held  by  ptfs,  to  the  s^me 
defenses  -^s  formerly 

Court : 

The  first  defense   is  un^v^ilpble,  for  the 
legislature  never   intended  th*^t  p   cor-Dor*=^tion 

esc^^^e  its  ,1  ift  debts,   Asto  the  second  «  contract 
>>#itreen  ^  corporation  and  its  directors  is  mer^ly 
void  ble  not  void,  -nd  requires  no   indeT)endent 

d  substrntlve  ^ct  of  r-^tific^tion.  Such  ^  cont- 
r-Pt  -p-  be  full-  established  by  pc-4iescence . 
Its  r-tific-tion  m«y  be  inferred  here  from  the 
iong  use  of  the  ro^d,  the  .^yment  of  interest  in 
the  notes.  Def's.  stockholders  ^^^^  ^^^^:i^,*^* 
knowledge  of  the  tr-ns-ction  here  they  c-red  to 

h«=ve*  they  '^re  liable,  

^   ^  '    ^  VERDICT  FOR  PTFS  • 


*aa   .altefi   eriT    .aecto:-:   at^lneo  noau  noi^foA 
oiat  '.:"'--    oi  :i©won    -  -^    '    -^    -';t   ©anol© 

::ov  ©Tew  ©T.o'VdTerfit  y^^a   o;t   nevi      aeefon 
03   £)«oi    ©ii;t    cd^lP-   ^aoli^'otJ:!^  ^1  to   ©Icf 
5I«g  ;taet©;tfil    ,bi=?6'^  rieif   TOi  merfit  ^cf   beau  xi© 
il©ff:t  10^   be-;©!!'*  noa^*©*!   ©rfT   •oj'©   ,a©don 

..../..    J8  "s^d   i30Tlir^©i   8^    ,e6«)i!   s^'w  ^o 

©i©ri  3©;ton  ©rfit   i^di   si   ©8n6!t©6  i9ff;^oxiA 

5©oio^   ©i©w  o;fw   ,a«o^o©iib  n-;?.?   ai^i   oi  nevJi 

-©B   ©ri;t  aocrij  'Jo»i^aoo   ea'j-   ©;J©Ia-moo   o;t   8©I;t© 

jed^  i'-<di   bns   ,3io;tof=».'i^noo   I^'ni^xio   edi  Ito 

om-^a  ©rf^   Oo    .s*ttcr  ^cf  bl©ff  fi©rfw  won  ;to©tcf 

vli  smio^    ??^    ^e 


?Diil      on   .tJ©T:ixr^©T    5n '■    ,6lov   :rnn      el' 

---ICO        ifoxj8    .  -oifi;t=>i  1:0    ^o-    ©tJitn^iscfj 

.©oneoa©^   .         ;    bedsild^Ue  xUssJ:  ed  v^n 

orf;}  moTl   ©T©rf   5-»t7©^ni   ©cf  \^«in  nol:f  ^oni'j  ^ 

OJ  b©i<=^o  x^d^   eied  not^o-en'ii   edi  to  e-gte 
^rr^„  •^Idntl   ©xe  ved:^ 


'T/l/l^X      ^^--rWUOt^ 


Ch.  4)  CREATION  OF  THE  RELATION  111 

contract  for  the  construction  of  its  road ;  that  the  act  was  ultra  vires ; 
that  the  unanimous  action  of  the  stockholders  would  not  cure  the  taint; 
and  that  all  promises  to  pay  for  work  and  materials  in  building  the 
road,  and  all  notes  given  therefor,  are  void  and  incapable  of  ratifica- 
tion, and  that  it  cannot  now  be  held  responsible  therefor,  although  for 
nearly  10  years  it  has  held,  enjoyed,  operated,  and  taken  the  earnings 
of  the  road  so  built  for  it,  and  paid  the  interest  on  the  notes.*"  In 
reference  to  this  ground  of  defense,  it  is  sufficient  to  say  that,  accord- 
ing to  cases  heretofore  decided,  it  has  been  declared  to  be  unavailable. 
It  was  not  intended  by  the  legislature  to  allow  corporations  to  escape 
from  their  just  debts  in  this  manner.  First  Nat.  Bank  of  Salem  v. 
Almy,  117  Mass.  476;  Augur  Steel  Axle  Co.  v.  Whittier,  117  ]vlass. 
451 ;'  Whitney  v.  Wyman,  101  U.  S.  392.  25  L.  Ed.  1050.  See,  also. 
Davis  V.  Old  Colonv  R.  R.,  131  Mass.  260,  41  Am.  Rep.  221 ;  Monu- 
ment Nat.  Bank  v.  Globe  Works,  101  Mass.  57,  3  Am.  Rep.  322 ;  Gold 
Min.  Co.  V.  National  Bank,  96  U.  S.  640.  24  L.  Ed.  648;  National 
Bank  v.  Matthews,  98  U.  S.  621,  25  L.  Ed.  188;  Harris  v.  Runnels, 
12  How.  79,  13  L.  Ed.  901 ;  O'Hare  v.  Second  Nat.  Bank.  77  Pa.  96. 

The  defendant  then  contends  that  the  notes  in  suit  cannot  be  en- 
forced because  they  were  given  to  its  own  directors  in  payment  for  the 
construction  of  the  road  by  them,  and  are  now  held  by  the  plaintifif 
subject  to  all  defenses  which  might  have  been  made  to  a  suit  upon 
tliem  by  the  payees.  Upon  this  point  the  only  question  properly  be- 
fore us  is  whether  there  was  sufficient  evidence  to  warrant  the  jury  in 
finding  a  ratification  of  the  notes  by  the  corporation.  The  presiding 
judge  assumed  that  the  notes  were  originally  void,  and  submitted  to 
the  jury  the  single  question  of  ratification.  Being  of  the  opinion  that 
there  was  sufficient  evidence  to  warrant  the  verdict  on  the  question  of 
ratification,  we  have  no  occasion  to  consider  whether  it  might  not  also 
have  been  proper  to  submit  to  the  jury  the  question  of  the  original 
vali(hty  of  the  notes  under  proper  instructions. 

The  first  request  for  instructions  was  properly  refused.  It  seems  to 
refer  to  a  supposed  theory  of  the  plaintifT  that  the  notes  might  be  rati- 
fied by  the  directors,  whereas  the  sole  question  submitted  to  the  jury 
was  whether  they  had  been  ratified  by  the  stockholders;  i.  e.,  by  the 
corporation  itself.    The  third  request  is  open  to  the  same  objection. 

The  second  request  sought  to  incorporate  into  the  doctrine  of  ratifi- 
cation a  new  element ;  namely,  that,  in  order  to  make  a  valid  ratifica- 
tion, the  principal  must  have  not  only  known  all  the  facts,  but  also  the 
legal  efTcct  of  the  facts,  and  then,  with  a  knowledge  bulh  of  the  law 
and  facts,  have  ratified  the  contracts  by  some  independent  and  sub- 
stantive act.  This  request  also  was  properly  refused/  It  is  sufficient 
if  a  ratification  is  made  with  a  full  knowledge  of  all  tlic  material  facts. 
Indeed,  a  rule  somewhat  less  stringent  than  this  may  properly  be  laid 

*i' S<'«'.  also.  Ilvatt  v.  f'liirk,  lis  X.  Y.  TA\\\.  2\\  X.  E.  WUXlsiMM:  Wll.l- r 
V.  Hc«'(lc,  111)  f'fi'l.  040.  Ttl  I'ac.  1083  (1S9S) ;  Contra:  Brown  v.  Rouse.  101 
(":il.  CT-J.  :!S  I'M'-.  .-(17  (is')li. 


112  Tiiio  RELATION  (Parti 

down  \vlicn  one  purposely  shuts  his  eyes  to  means  of  information 
witliin  his  own  possession  and  control,  and  ratifies  an  act  deliberately, 
having  all  the  knowledge  in  respect  to  it  which  he  cares  to  have. 
Combs  V.  Scott.  12  Allen,  493,  497 ;  Phosphate  of  Lime  Co.  v.  Green, 
L.  R.  7  C.  P.  43,  S7.   \ 

The  fourth  and  fiftl^  requests  were  both  to  the  effect  that  on  all  the 
evidence  the  jury  would  not  be  warranted  in  finding  a  ratification. 
The  circumstances  of  the  case  were  such  as  to  render  the  inference  of 
ratification  natural  and  easy,  especially  in  view  of  the  lapse  of  time 
since  the  notes  were  given.  There  was  uncontradicted  evidence  tend- 
ing to  show  that  the  directors  made  a  contract  with  one  Gowan  for 
building  the  road  for  a  certain  price  in  money  and  stock,  and  that  he 
gave  to  the  company  a  bond,  with  Kelley  and  Binney  as  sureties,  for 
the  faithful  performance  of  his  contract.  Gowan  failing  to  perform 
his  contract,  the  board  of  directors  called  on  the  sureties,  who  them- 
selves were  directors,  to  perform  it,  with  notice  that  they  would  be 
held  liable  to  the  company  for  all  damages  that  might  accrue  to  the 
company  by  their  default.  Therefore  the  sureties  proceeded  to  finish 
the  road  according  to  the  contract,  in  which  originally  they  had  no  in- 
terest. The  price  was  fair  and  reasonable.  The  road,  as  completed  by 
them,  was  a  well-built  road.  The  advancements  made  by  them  were 
in  consequence  of  the  notice  given  to  them  by  the  directors,  and  not 
with  any  fraudulent  design  to  obtain  any  pecuniary  benefit  for  them- 
selves from  said  contract.  The  settlement  was  made  with  them  by  the 
directors  under  authority  of  a  general  vote  of  the  stockholders  author- 
izing them  to  make  any  settlement,  and  the  notes  in  suit  were  given. 

As  a  general  rule,  a  contract  between  a  corporation  and  its  directors 
is  not  absolutely  void,  but  voidable  at  the  election  of  the  corporation. 
Such  a  contract  does  not  necessarily  require  any  independent  and  sub- 
stantive act  of  ratification,  but  it  may  become  finally  established  as  a 
valid  contract  by  acquiescence.  The  right  to  avoid  it  may  be  waived. 
Union  Pac.  R.  R.  v.  Credit  Mobilier,  135  Mass.  376,  377;  Twin  Lick 
Oil  Co.  V.  Marbury,  91  U.  S.  587,  23  L.  Ed.  328;  Hotel  Co.  v.  Wade, 
97  U.  S.  13,  24  L.  Ed.  917;  Ashhurst's  Appeal,  60  Pa.  290.  In  the 
present  case,  such  ratification  or  waiver  might  well  be  inferred ;  and, 
indeed,  we  do  not  see  how  any  other  inference  could  fairly  be  drawn 
from  the  acts  of  the  company  in  holding  and  operating  the  road  for 
so  many  years  without  taking  any  steps  to  repudiate  the  notes ;  from 
the  payment  of  interest ;  from  the  acceptance  of  the  report  of  the 
treasurer  on  October  6,  1875,  and  October  2,  1878;  and  from  the  ac- 
ceptance of  St.  1884,  c.  149,  authorizing  the  company  to  issue  bonds 
to  an  amount  not  exceeding  $30,000  for  the  purpose  of  extinguishing 
its  floating  debt.    Exceptions  overruled. 


City  of  Detroit  v^   jpckson. 

F?»cts:  --^^' 

U-non  ^n  pgreeraent  for  /=  sulDmission  to-  ^r"b- 
itr^tion  ^-  indp^Tient  iinon  ^n  ^iwrd  in  «  certain  ^mt, 
hos  "heen  entered  fg^inst  def.  eit;/.  I'  ef .  ==  lieges 
f'-.pt  the  su'bmiFFion  ws  not  duly  e*6t66666  executed 
^y  the  cit;:,  in  th^t  its  m«=yor,  duly  authorized 
"^-t.,  on  h'eh^lf  of  city  Pnd  its  officers  signed  his 
-me  to  s«>me,  followed  "by  "M'^yor  of  Detroit",  in- 
^te^d  of  disclopins:  t>e  -^^gency  "by  an  addition  to 

e  sign-^ture  ^f  well  «s  by  descri-ntion  in  the  "body 
^f  the  instrument. 

Co  irt! 

It  is  competent  for  ^n  ^gt.,  who  h^s  due 
"uf'^ority  to  contr^-ct  on  beh^^lf  of  -i^rin.,  so  to 
exceiite  ^n   instrument,  °s  to  m«ke  hi:Tiself  person^  11; 
resTOJisihle  for  his  ^^rinciT)«=l,  Court  looks  to 
form  of  iiistrument  itself  to  escert-^in  whether  it 
is  contract  of  "orin.  or  ^gt,  person'^lly.  Here  -^ddit 
ion  of  word  ^'gent  or  other  designation  to  signature 
would  not  '^lone  m«^ke  contr'^ct  th«=t  of  r^rinclP'^l. 
P'^rticul^r  form  of  execution  is  not  materil/,  if 
instrument  is  subst.^nti^lly  done  in  n^me  of  princip 
Defs.  ^re  duly  described  in  body  «s  contracting 
p^rty.   Principal's  f>nme  must  be  signed  to  instrum- 
ents under  se^l,  but  th^t  is  not  c»=se  here, 

VERDICT  FOR  PTF. 
Ivlerch'-nts  B'^nk  v.  Central  B-^nk. 


:  8;t 


•>^I«2  •^5f^,/Vv  i^/ylteb   itanJt^^'*   b^T9in9  neerf   st 

aj.t   ;t'*rf^   nf    ,Y,^i©   ©rf^t 
•irf   ^  ai«c  ^  'y;;tl5  lo  "tl^rferf  no    , .  ;J 

-    •    ,  rd   bewoIXol:    ,em'»a   o;t    ©rr 

gj    !:■-  . ''    ©  :;t    :?*r. .r^oI03.f  fb   1:n    b^'© 

^borf  0rf*  al  aoi^rrstoB^b  y,ci    a«   Ilew  <?-   •Tu;t "^n-^la  e^'l 

.;tn»fnin:tanl   sK:^   ^r 

esjb  STi'  orfw    ,  n^   lo^   itiie;terrmoo   al   ;tl 

^^    08    ,.nii      1-   il^rfdcf  no   :fo 'T:^riOo   Co    Y^iir    jif 
;II  ;..n-  tle3i!;ifi   ©li.wfn   o^   a=^    ,;tnefriXJid'arii  n^^   e^iT©ox« 

OJ    aitOOl    iXL^oO    .I'^'rrxonilrr    3iff    10^    ©Icf  iBifcorraei 

3i.aq    ♦J^S'*  10    »nixrf  lo   (tCT^tnoo   aj 

61  3e&  Terf^to  *to  ^n©s^   bxow  lo  n- 

.      ._      „     .:    jO'-^Titnoo   e:ar-<iri   enol'^  ^ on   bLu-. 

^.  te;tBm  ;ton  si  nol;t;;oexe  lo  mtco^  X'^IuolcJ'n^ 

qt9a  ■   Y-f-f"  '  ^   8i   ^nemxncfanj 

^,,  - .  .  .-    „   ..._    -.      ,,..---   ai   t-L --.   ^jlj'/b  ©•!«    .81  ©I 

-miniani   o^   b©ngx8   ed  ^eum  ©ran'*  a 'I«crioniiS:     ,'^d'TRc 
,©T©n   ©8=^0   J"on  81   ;t^^ff;t   iis6    ,I^©8  labnxr  aj-n* 


Ch.  4)  CREATION  OF  THE  RELATION  113 

EHRMANTR.\UT  v.  ROBINSON  et  al. 
(Supreme  Court  of  Minnesota,  1S93.    52  Minn.  333,  54  N.  W.  ISS.) 
Appeal   from  an  order,  denying  motion  of  defendants   for   a  new 

trial. 

Mitchell,  J.  This  action  was  brought  on  the  covenants  of  a  lease 
to  recover  rent  for  the  last  eight  months  of  the  term,  viz.  from  Sep- 
tember 1,  1890,  to  May  1,  1891.  The  evidence  discloses  the  following 
facts :  Nora  Grove  No.  23,  U.  A.  O.  D.,  of  which  the  defendants  were 
members,  was  an  unincorporated  association  or  society  of  individuals, 
formed  for  social  and  benevolent  purposes,  and  not  for  gain  or  pecun- 
iary profit.  Among  other  officers,  they  had  three  trustees,  of  whom 
defendants  Robinson  &  Larson  were  two.  The  scope  and  extent  of 
the  powers  and  duties  of  these  trustees  was  to  take  charge  of  the  prop- 
erty of  the  association.  In  May,  1886,  Robinson  &  Larson,  without  au- 
thority, so  far  as  appears,  from  their  assbciates,  procured  from  plain- 
tiff the  lease  referred  to,  of  the  upper  story  of  a  certain  building,  for 
the  term  of  five  years,  at  an  annual  rent  of  $300,  payable  $25  monthly 
in  advance.  The  lease  runs  to  them  as  trustees  of  the  association,  and 
there  is  and  can  be  no  question  but  that  in  taking  the  lease  these  trus- 
tees assumed  to  act  for  and  in  behalf  of  the  society.  In  July,  1886, 
the  members  of  the  association,  including  the  defendants,  entered  into 
possession  of  the  premises,  and  continued  to  hold  their  meetings  there 
until  some  time  in  the  fall  of  1890,  when  the  society  disbanded,  \yhile 
the  society  occupied  the  premises,  they  paid  rent  therefor,  $25  per 
month,  up  to  September  1,  1890.  The  lease  was  never  reported  to  or 
acted  on  by  the  society  at  any  of  its  meetings,  and  it  may  also  be  as- 
sumed that  neither  Hervin  nor  Wilson  ever  knew  what  the  terms  of 
the  lease  were,  and  that  Hervin,  perhaps,  did  not  even  know  that  there 
was  any  written  lease.  But  there  is  abundant  evidence  to  show  that 
both  of  them  knew  that  some  agreement  had  been  made  in  behalf  of 
the  association,  with  plaintiff,  for  the  use  of  the  premises,  and  that 
without  inquiring,  or  in  any  way  attempting  to  inform  themselves,  as 
to  what  the  terms  of  that  agreement  were,  they,  in  common  with  their 
associates,  went  into  possession  and  continued  to  use  and  occupy  the 
premises  for  the  purposes  of  their  society  until  they  disbanded. 

It  seems  to  us  that  neither  of  the  counsel  has  fully  grasped  the  legal 
principles  applicable  to  this  state  of  facts.  Of  course,  a  benevolent  or 
social  club  or  association  of  this  kind  is  not  a  partnership,  in  any  prop- 
er sense  of  that  term.  The  members  are  liable,  if  liable  at  all,  for  the 
acts  of  their  associates,  on  the  ground  of  principal  and  agent,  and  not 
of  partnersliij).  Hence,  it  is  undoubtedly  true  that  only  those  members 
who  authorized  or  subsequently  ratified  the  act  of  these  trustees  in 
taking  this  lease  would  be  bound  by  it.  Bates,  Partn.  §  lh\  Lindl. 
Partn.   50,  Story,  Partn.  §   144;    Flemyng  v.  Hector,  2  Mecs.  &  W. 

G0DD.1'K.&  A. — 8 


114  iiiK  KicLATioN  (I'artl 

17J;  Asli  V.  C.uic.  97  Pa.  4''3.  3')  Am.  Ucp.  SIS.  lUit  it  is  true  that 
all  tho  luoinbors  who  suhscijucnllv  ralilicd  the  act  are  liable,  ami  in  our 
•pi.'iioii  the  act  of  llcrvin  and  Wilson  amounlotl  to  a  ratilication. 

It  is  sometimes  said  that,  to  constitute  a  ratification  of  an  unauthor- 
ized act  of  an  ajijent.  the  ]irincii)al  must  have  had  knowledge  of  all  the 
iiaterial  facts.  As  to  a  past  and  completed  transaction,  this  would  be 
sjenerally  true,  but  there  are  many  cases  where  the  conduct  of  the  prin- 
cipal may  amount  to  a  ratification,  although  he  may  not  know  all  the 
facts  as  to  the  unauthorized  act  of  die  agent  in  his  l)ehalf.  lie  may 
ratify  by  voluntarily  assuming  the  risk  without  inquiry,  or  he  may  de- 
liberately ratify  upon  such  knowledge  as  he  possesses,  without  caring 
for  more.  Lewis  v.  Read,  13  Mees.  &  W.  S34,  Kelley  v.  Railroad  Co., 
141  Mass.  496,  6  N.  E.  745. 

Where,  as  in  the  present  case,  the  defendants  ITervin  &  Wilson  had 
notice  that  an  unauthorized  contract  had  been  made  in  their  behalf  for 
the  use  of  these  premises,  it  was  their  duty,  before  accepting  its  bene- 
fits, to  ascertain  what  the  terms  of  that  contract  were.  By  going  into 
possession,  and  enjoying  the  use  of  the  premises,  without  any  attempt 
to  ascertain  the  terms  of  the  lease  under  which  they  entered,  they  must 
be  held  to  have  deliberately  intended  to  take  the  risk  of  ratifying  upon 
such  knowledge  as  they  had."° 

2.  The  statute  of  frauds,  which  defendants  invoke,  has  no  applica- 
tion to  the  case.  Of  course,  to  bind  the  plaintiff,  the  lessor,  it  was 
necessary  that  the  lease  should  be  in  writing,  and  subscribed  by  him. 
But  a  lessee  neither  "creates,  grants,  nor  declares"  any  estate  or  in- 
terest in  lands.  By  accepting  a  lease,  he  is  bound  by  all  its  covenants 
to  be  by  him  performed,  and  this  acceptance  need  not  be  in  writing. 
The  authority  of  an  agent  to  procure  or  accept  it  for  him  is  not  re- 
quired to  be  in  writing,  and,  as  original  authorization  may  be  by  parol, 
50  may  ratification.    Order  affirmed. 


LEWIS  V.  READ. 

(ExeheQuer  of  IMeas,  H.  V.  1S45.     13  Mees.  &  W.  S.*',4.) 

Case.  The  first  count  was  for  illegally  distraining  and  selling  the 
cattle  of  the  plaintiff  for  rent  due  to  the  defendant  Read  from  one 
John  Lewis,  without  duly  appraising  the  same ;  the  second  count  was 
in  trover :    the  third  was  for  selling  them  for  less  than  the  best  price. 

•'•0  See,  also.  Walker  v.  Walker,  5  Heisk.  425  (1871),  holding  that  Igno- 
rance of  the  facts,  whether  due  to  want  of  iiitiniry  liy  tlie  principal  and  neg- 
lect to  ascertain  the  fiicts.  or  otherwise,  will  render  the  ratificiilion  incCfcctual, 
and  Stokes  v.  Mackay.  04  Hun.  (;:;0,  10  X.  Y.  Supp.  OlS  (ISDU),  in  which  it 
was  said  that  a  lainciiml  may,  if  he  choo.ses,  adopt  or  ratify  his  agent's  acts 
without  full  information,  if  his  intent  to  do  so  be  clearly  manifest.  If  he 
has  such  confidence  in  his  agent's  judgment  and  fidelity  that  he  is  willing 
to  abide  any  reasonable  liability  which  the  agent  has  honestl.v  and  in  good 
faith  assumed  to  impose  on  him.  he  may  take  the  risk  of  the  agent's  act 
n  ithout  inquiry,  and  adopt  the  whole  act. 


0 


Ch.  4)  CREATION  OF  THE  RELATION  llo 

Plea,  not  guilty,  by  statute.  At  the  trial,  before  Coleridge.  J.,  at  the 
last  assizes  for  Montgomeryshire,  it  appeared  that  the  plaintiff's  broth- 
er, John  Lewis,  was  tenant  from  year  to  -ear  to  the  defendant  'Sir. 
Crewe  Read,  of  a  mill  and  tarm  called  Aberborthen,  and  a  mountani 
sheep-walk  called  Penybryn;  and  that,  being  in  arrear  with  his  rent, 
the  other  defendants,  by  the  verbal  direction  of  a  Sir.  Owens,  who 
was  ^Ir.  Read's  general  agent  for  the  management  of  his  estate,  on 
the  11th  May,  1844,  distrained  about  forty  sheep  belonging  to  the 
plaintiff  to  satisfy  the  rent,  which  were  sold,  under  Mr.  Owen's  direc- 
tions, for  il4.  15s.  Mr.  Owens  had  expressly  directed  the  defendants 
not  to  take  any  thing  but  what  they  should  find  on  Aberborthen  or  on 
Penybryn. 

The  main  questions  in  the  cause  were,  first,  whether  the  sheep 
(which  were  clearly  shown  to  be  the  property  of  the  plaintiff",  and  not 
of  John  Lewis)  were  or  were  not  distrained  upon  the  sheep-walk  of 
Penybryn,  or  beyond  its  boundary ;  and,  secondly,  whether,  at  the 
time  of  the  distress,  John  Lewis's  tenancy  in,  or  possession  of  the 
farm  and  sheep-walk  continued :  on  both  which  points  there  was  con- 
flicting evidence.  It  appeared  that  the  defendants  had  in  the  first  in- 
stance seized  upon  a  dozen  sheep,  which  they  found  on  the  Penybryn 
mountain,  and  that,  while  they  were  driving  them  down,  and  some- 
where very  near  the  boundary  of  the  Penybryn  sheep-walk,  these  were 
joined  by  the  other  sheep,  which  had  been  straying  upon  an  adjoin- 
ing sheep-walk  belonging  to  another  farm.  Mr.  Owens  received  the 
proceeds  of  the  sale  of  the  sheep,  and  accounted  for  the  money  to  Mr. 
Read;  but  there  was  no  direct  evidence  that  either  Mr.  Owens  or  Mr. 
Read  was  informed  where  the  sheej)  were  taken,  or  had  any  distinct 
knowledge  that  the  distress  was  not  made  on  the  Penybryn  sheep- 
walk.  The  learned  Judge,  in  summing  up,  told  the  jury,  that,  if  the 
sheep  were  distrained  off  the  Penybryn  sheep-walk,  although  it  might 
be  so  near  the  boundary  as  to  amount  to  a  mere  irregularity  in  the 
bailiffs;  or  if,  at  the  time  of  the  (Hstress,  the  tenancy  of  John  Lewis 
in  Penybryn  had  determined,  and  he  did  not  continue  in  possession  of 
it,  the  defendants  were  all  liable  on  the  count  in  trover.  The  jury 
found,  that  the  first  lot  of  sheep  were  taken  on  Penybryn,  but  that 
there  was  no  evidence  to  satisfy  them  where  the  others  were  taken : 
anfl  that,  at  the  time  of  the  distress,  John  Lewis  had  ceased  to  be  the 
tenant,  and  did  not  continue  in  possession  of  Penybryn ;  and  there- 
upon, under  the  direction  of  the  learned  Judge,  a  verdict  was  entered 
for  the  i)laintiff  against  all  the  defendants  on  the  count  in  trover,  dam- 
ages £14.  15s. 

W'clsby.  in  Michaelmas  Term  last,  obtained  a  rule  nisi  for  a  new 
trial,  on  the  ground  of  misdirection;  contending,  that,  without  evi- 
dence of  the  ratification  by  the  defendant  Read  of  the  irregularity  in 
the  execution  of  the  distress,  with  knowledge  of  such  irregularity,  he 
could  not  be  liable  in  trover;  that  there  was  no  evidence  of  such  rati- 


Ci(A4n 


IIG  TllK    KKLATION  (Paitl 

fication,  or,  if  there  were,  '.hat  the  question  liad  not  been  left  to  the 
jury. 

\V.  Yardley  and  E.  Beavan  (with  whom  were  Jervis  and  Wilkin) 
now  showed  cause :  First,  the  s;dc  of  the  sheep,  the  proceeds  of  which 
were  received  by  the  defendant  Read,  was  a  conversion  for  which  he 
was  clearly  liable  on  the  count  m  trover.  [Parke,  B.  But  then  you 
must  show  a  joint  conversion,  and  there  was  no  evidence  that  the 
other  tiefendants  took  part  in  the  sale. J  Secondly,  the  whole  transac- 
tion, from  the  original  seizure  down  to  the  sale  of  the  sheep,  may  be 
regarded  as  one  continued  conversion,  to  different  parts  of  which  all 
the  defendants  were  parties ;  the  bailiffs  by  the  actual  seizure,  and  the 
defendant  Read  by  directing,  through  his  agent,  the  sale  of  the  sheep, 
and  receiving  the  proceeds  of  it.  But,  even  supposing  that  the  orig- 
inal seizure  is  to  be  regarded  as  the  conversion  complained  of,  there 
was  sufficient  evidence  of  a  ratification  by  the  defendant  Read  of  the 
illegal  act  of  the  other  defendants  in  making  the  seizure.  It  appeared 
that  Mr.  Owens  was  his  general  agent  for  the  management  of  his  es- 
tate ;  and  the  receipt  by  him,  through  such  agent,  of  the  proceeds  of 
the  illegal  distress,  without  inquiring  into  the  circumstances,  was  suf- 
ficient evidence  against  him  that  he  adopted  the  acts  of  the  bailiffs 
done  on  his  behalf. 

Welsby  (wnth  whom  was  Townsend),  in  support  of  the  rule:  The 
conversion  complained  of  at  the  trial  clearly  was  the  original  seizure 
of  the  sheep,  and  not  the  sale.  The  previous  authority  did  not  war- 
rant the  seizure  off  Penybryn ;  and  there  was  no  evidence  of  a  ratifi- 
cation by  the  defendant  Read  of  that  illegal  seizure.  A  party  cannot 
be  made  a  wrongdoer  by  his  merely  receiving  the  proceeds  of  a  dis- 
tress made  for  his  benefit,  unless  he  knew  it  to  have  been  wrongfully 
made.  At  all  events,  the  question  of  ratification  ought  to  have  been 
left  to  the  jury.     [He  was  then  stopped  by  the  Court.] 

Parke,  B.  I  am  afraid  the  rule  must  be  absolute.  There  is  no 
doubt  that  the  acts  of  the  defendant  Read,  in  directing,  through  his 
agent  Owens,  the  sale  of  the  sheep,  and  receiving  the  proceeds,  were 
a  sufficient  ratification  of  the  act  of  the  bailiffs  in  making  the  distress, 
as  to  such  of  the  sheep  as  were  taken  on  the  Penybryn  sheep-walk,  be- 
cause the  taking  of  them  was  within  the  original  authority  given  to  the 
bailiffs  by  Owens  as  the  agent  of  Read.  But  as  to  the  others  which 
were  not  proved  to  have  been  taken  on  Penybryn,  and  as  to  which, 
therefore,  the  authority  was  not  followed,  Mr.  Read  could  not  be  lia- 
ble in  trover,  unless  he  ratified  the  act  of  the  bailiffs,  with  knowledge 
that  they  took  the  sheep  elsewhere  than  on  Penybryn;  or  unless  he 
meant  to  take  upon  himself,  without  inquiry,  the  risk  of  any  irregu- 
larity which  they  might  have  committed,  and  to  adopt  all  their  acts.°^ 

61  See,  also,  Tucker  v.  Jerris,  75  Me.  184  (1883),  in  which  the  ratification 
by  a  principal  of  a  tort  of  the  agent  was  involved.  Said  the  court :  "Of  origi- 
nal authority  even  to  commence  a  suit  in  the  name  or  for  the  benefit  of  Jer- 
ris there  was  no  evidence  whatever — of  ratification,  none  but  the  failure  to 


Ch  4)  CREATION  OF  THE  RELATION  117 

There  appears  to  have  been  evidence  quite  sufificient  to  warrant  the 
jury  in  coming  to  the  conclusion,  that  he  didX  in  this  sense,  ratify  the 
acts  of  the  other  defendants  -J  but,  as  this  question  was  not  left  to  the 
jury,  the  defendant  is  entitlekj:o  a  new  trial.    ,  'A« 

Aldersox,  Rolfe,  and  Platt,  BB.,  concurred. 

Rule  absolute.  ^ 

.    y 


THACHER  V.  PRAY. 

(Supreme  Judicial   Court   of  Massachusetts,  1873.     113   Mass.  291,   18   Am. 

Kep   480.) 

Thacher  sold  one  Gray  potatoes  and  left  with  him  a  horse  to  keep, 
but  not  to  sell.  Gray  owed  Pray,  and  sold  him  the  horse  to  satisfy  the 
debt,  receiving  in  addition  a  check  for  $100.  This  check  he  indorsed 
and  mailed  to  Thacher,  who  cashed  it,  supposing  it  was  in  payment  for 
the  potatoes.  When  he  learned  that  Pray  had  the  horse  he  demanded 
its  return,  but  refused  to  give  up  the  proceeds  of  the  check.  The  court 
below  charged  that  the  retention  of  the  $100  after  full  information  ' 
of  the  transaction,  and  the  refusal  to  restore  it  to  Pray,  was  an  adop- 
tion of  the  whole  transaction.  Verdict  for  defendant,  and  plaintiff  al- 
leges exceptions. 

Endicott,  J.  The  instructions  upon  which  this  case  was  given  to 
the  jury  failed  to  notice  an  important  portion  of  the  evidence.  If  the 
only  dealings  between  the  plaintiff  and  Gray  related  to  this  horse,  and 
the  money  paid  for  the  horse  by  the  defendant  to  Gray,  who  had  no 
authority  to  sell,  had  been  sent  to  the  plaintiff,  the  taking  and  keeping 
it  might  be  a  ratification  of  the  sale  by  Gray;  or  if  the  plaintiff,  had 
wished  to  rescind  it,  he  should  return  the  money  so  received.  But  the 
evidence  in  the  case  required  other  and  further  instructions.  ;  It  ap- 
peared that  the  plaintiff  had  sent  potatoes  to  Gray  for  sale,  an^  there 
was  evidence  tending  to  show  that  the  check  for  $100,  taken  by  Gray 

direct  its  discontinuance  as  soon  as  it  came  to  liis  knowledge  that  it  had  boon 
commenced  in  his  name  when  Chase's  attorney  presented  the  bond  for  his 
aititroval.  The  (jnestion  is  wlictlicr  that  omission  imjioscs  ui)ou  the  defend- 
ant a  lialillity  for  Cliase's  tort,  if  he  committpd  one.  To  bind  one  to  tlx- 
performance  of  a  contract  wliich  another  without  antliority  has  assumed  to 
make  for  him,  the  ratification  nuist  l)e  made  with  a  full  knowlcdice  of  all 
material  facts.  'Ignorance  or  misapprehension  of  any  of  the  essential  cir- 
cumstances relating  to  the  particular  transaction  alleged  to  have  been  ratified 
will  absolve  the  principal  from  all  liability  l)y  reason  of  any  suppo.sed  adoj)- 
llon  of  or  assent  to  the  previously  im.authorized  acts  of  an  agent.'  Combs 
V.  Scott,  12  Allen,  4'M.  And  this  is  so  even  though  the  ignorance  or  niisaii- 
prehensiori  arises  from  the  negligence  and  omission  of  the  defendant  to  luake 
any  impdry  relative  to  the  subject-matter.  Ibid.  To  hold  one  responsible 
for  a  trtrt  not  conuidtted  by  his  orders,  his  adojttion  of  juid  asseid  to  (he 
.same  nmst  at  all  events  be  clear  and  e.xiilicit.  and  founded  on  a  clear  knowl 
edge  of  the  tort  which  has  been  committed.  Adams  v.  Freeman,  !)  .loliiis. 
117:  West  V.  Shockley,  4  liar.  *JS7;  Kreger  v.  Osborn,  7  Blackf.  74;  Abbott 
V.  Kimball,  19  Vt.  'j'A    [47  Am.   Dec.  70S)." 


'V 


lis  Till-   Ki;i..vri(>\  (Fart  1 

oil  account  of  the  \\ront;ful  s;iK'  nf  llio  Ikm-sc,  was  i>ai(l  over  to  the 
lilaiiilitT.  received  by  him.  ami  crethied  on  account  of  the  potatoes,  and 
the  phuntilT  iHil  not  know  the  horse  had  been  sold,  for  a  lon<j  time  aft- 
erward. These  facts  justify  the  plaintilT's  pra\er  for  instructions,  and 
wc  think  they  siundd  have  been  c^iven. 

It  docs  not  affect  the  rij^hts  of  the  parties  that  the  same  check  which 
dcfen(kuit  i,Mve  Gray  was  given  to  the;  plaintiff,  if  it  was  appHed  to 
the  settlement  of  an  existing  account  between  them,  without  any  no- 
tice that  it  was  a  part  of  the  proceeds' of  the  unauthorized  sale  of  the 
horse.  Iking  indorsed  by  Gray  it  was  in  the  plaintiff's  hands  payal)le 
to  bearer,  transferable  by  delivery,  and  subject  to  the  same  rules  as 
bank  bills,  couitons.  or  other  instruments  payable  in  money  to  bearer. 
Sjiooner  v.  Holmes,  102  Mass.  503,  3  Am.  Rep.  491.  It  is  as  if  Gray 
had  cashed  the  check  and  sent  the  identical  or  other  bills  to  the  plain- 
tiff". It  was  held  in  Lime  Rock  Bank  v.  Plimpton.  17  Pick.  159,  28 
Am.  Dec.  286,  where  an  agent  had  lent  the  money  of  his  principal  to 
his  jirivate  creditor,  who  appropriated  it  to  the  payment  of  the  debt, 
that  the  principal  could  not  recover  it,  the  creditor  not 'knowing  at 
time  of  the  loan  that  the  money  belonged  to  the  principal.j  The  cred- 
itor had  the  right  to  secure  his  private  debt,  and  being  nipney  having 
no  ear  mark,  it  did  not  stand  on  the  same  ground  as  chattels.  A  party 
is  not  bound  to  inquire  intO'  the  authority  of  a  person  froni  whom  he 
receives  money  in  payment  of  a  debt,  for  a  different  doctrine  would  be 
productive  of  great  mischief.  In  that  case  as  in  this,  there  was  no 
privity  between  the  parties,  and  the  equities  were  much  stronger  than 
here. 

Exceptions  sustained. 


(P)  Ratification   in   Part 

RUDASILL  V.  FALLS. 
(Supreme  Court  of  North  Carolina.  ISSo.    92  N.  C.  222.) 

Plaintiff,  defendant,  and  one  Green  became  sureties  on  a  note  for 
SI, 600,  given  by  the  firm  of  Jenkins,  Homesley  &  Oates  to  A.  V. 
Falls.  Green  and  Jenkins  became  insolvent  and  Oates  died.  Homes- 
ley  wished  to  keep  the  factory  running  to  protect  the  sureties.  De- 
fendant got  a  bill  of  sale  of  $2,000  of  property,  which  plaintiff  claimed 
was  in  behalf  of  the  sureties,  and  to  protect  them  and  enable  Homes- 
ley  to  continue  to  run  the  factory.  Defendant  denied  that  he  had  ever 
come  into  possession  of  any  property  for  such  purpose,  or  that  plain- 
tiff had  agreed  to  the  arrangement.  Action  to  recover  from  defend- 
ant the  moiety,  paid  by  plaintiff,  on  the  allegation  that  the  defendant 
received  from  their  principals  property  sufficient  in  value  to  discharge 
the  entire  debt.     The  court  instructed  the  jury  to  find  for  plaintiff  if 


^^  //..       4. 


l^fJA^U. 


Ch.  4)  CREATION  OF  THE  RELATION       '  119 

they  believed  his  testimony ;   for  defendant  if  they  believed  his.    Judg- 
ment for  plaintiff,  and  defendant  appeals. 

Smith,  C.  J.^-  *  *  *  The  instruction  in  this  alternative  form 
is  unexceptionable  as  far  as  it  goes.  But  there  is  an  intermediate 
aspect  of  the  case  presented  in  the  testimony,  and  perhaps  warranted 
by  it,  which  was  not  brought  to  the  attention  of  the  jury.  The  result 
does  not  necessarily  depend  upon  the  terms  of  the  first  arrangement, 
nor  the  extent  of  the  authority  conferred  upon  the  defendant,  as  agent 
of  his  associate  sureties. 

Assuming  the  plaintiff's  representation  to  be  true  and  his  memory 
of  what  occurred  entirely  accurate,  his  statement  is  not  in  accord  with 
the  understanding  of  Homesley,  who  made  the  proposal,  and  the  lat- 
ter may  have  refused  to  make  the  assignment  at  all,  except  upon  the 
condition  of  a  continuance  of  the  factory  operations.  If  then,  the 
defendant  could  not  effect  the  object  of  the  agency  under  the  pre- 
scribed limitations  and  exceeded  them  in  what  was  done,  the  plain- 
tiff had  an  election  to  ratify  or  repudiate  what  was  done  on  behalf 
of  all.  This  he  was  bound  to  do,  and  he  could  not  sever  parts  of  a 
single  agreement  embraced  and  expressed  in  the  two  writings,  so  as 
to  take  advantage  of  that  which  was  favorable  without  the  whole  be- 
ing assumed.  The  agency  being  exceeded,  he  was  not  bound  by  what 
the  agent  did  in  the  name  and  for  the  common  benefit,  but  he  was 
bound  to  take  the  arrangement  in  its  entirety  or  not  to  recognize 
it^ obligations  at  all. 

f'The  principal  cannot  of  his  own  mere\  authority  ratify  a  transac- 
tiafj  in  part  and  repudiate  as  to  the  rest,"  As  the  language  of  IMr.  Jus- 
tice Story  in  section  250  of  his  work  ojk  Agency.  "He  must  either 
adopt  the  whole  or  none."  /  r^^f 

Another  recent  author  lays  down  the  same  doctrine  thus :    "A  nulli-  { 

fication  must  extend  to  the  whole  of  a  transaction."  So  well  estab- 
lished is  this  principle,  that  if  a  party  is  treated  as  an  agentMn  respect 
to  one  part  of  a  transaction,  the  whole  is  thereby  ratified.  /  From  this 
maxim  results  a  rule  of  universal  application  that  wherej  a  contract 
has  been  entered  into  by  one  man  as  agent  of  another,  th^  person  on 
whose  behalf  it  has  been  made  "cannot  take  the  benefit  of  it  without 
bearing  its  burdens.  The  contract  must  be  performed  in  its  integrity." 
Ewell's  Evans'  Agency,  70  (Ed.  of  1879,  p.  95). 

The  rule  rests  ujjon  sound  reason  and  abundant  authority.  Craw- 
ford V.  Barkley,  18  Ala.  270;  Modnett  v.  Tatum,  9  C.a.  270;  Banl^ 
v.  Manner,  14  Mich.  208;    Coleman  v.  Stark,  1  Or.  115. 

The  record,  and  these  instructions  asked,  i)rcsent  this  view  of  the 
case,  and  the  defendant  had  a  right  to  have  them,  or  their  equivalent, 
given  for  the  guidance  of  the  jury.  The  judge  was  mistaken  in  his 
hurried  reading  of  the  series  of  instructions  asked,  in  supi)usiiig  they 
were  embodied  in  his  charge. 

r'ZPnrt    of  tlio  njiiiiinn  is  oinlttfrl. 


(<JjJdL 


\\ 


(\1 


\-()  TiiK  uKi,ATioN  (Part  1 

Ihul  they  been  ^rivon  (ho  rcsuU  niij^ht  have  hcoii  different,  but  at 
least  tlie  eharge  ouj^ht  to  liave  preseiUeil  the  ease  in  this  aspeet  to 
the  eonsideration  of  tlie  jury,  and  there  is  error  in  his  mistake  to  do 
so. 


♦     ♦     * 


For  error  in  the  record  a  new  trial  was  ordered. 


.WP 


MUNDORFF  v.  WICKERSHAM. 

(Supreme  Court  of  lViiiis\  lv:uii;i.  3800.     G3  Pa.  S7,  3  Am.  Rep.  531.) 

Assumpsit  upon  a  note  which  plaintiff  delivered  to  the  agent  of 
defendant,  and  which  it  was  alleged  had  been  lent  to  defendant  on  a 
stipulation  signed  by  the  agent  that  the  defendant  would  protect  it  at 
maturity.  Plaintiff  had  to  take  up  the  note  at  maturity.  From  a  non- 
suit plaintiff'  brings  error. 

Sh.\rswood,  J.  V[f  an  agent  obtains  possession  of  the  property  of 
another,  by  makin^a  stipulation  or  condition  which  he  was  not  au- 
thorized to  make,  the  principal  must  either  return  the  property,  or, 
if  he  receives  it,  it  must  be  subject  to  the  condition  upon  which  it  was 
parted  with  by  the  former  owner.  This  proposition  is  founded  upon 
a  principle  which  pervades  the  law  in  all  its  branches :  "Qui  sentit 
commodum,  sentire  debet  et  onus."  The  books  are  full  of  striking 
illustrations  of  it,  and  more  especially  in  cases  growing  out  of  the 
relation  of  principal  and  agent.  Thus,  where  a  party  adopts  a  con- 
tract which  was  entered  into  without  his  authority,  he  must  adopt  it 
altogether.  He  cannot  ratify  that  part  which  is  beneficial  to  himself 
and  reject  the  remainder:  he  must  take  the  benefit  to  be  derived  from 
the  transaction  cum  onere.  Broom's  Legal  Maxims,  632;  Hovil  v. 
Pack,  7  East,  164;  Coleman  v.  Stark,  1  Or.  115.  In  the  familiar  case 
of  the  sale  of  a  horse  by  a  servant,  who,  without  authority,  warrants 
the  soundness  of  the  animal,  the  master  having  received  the  price  en- 
hanced by  the  warranty,  even  though  ignorant  of  it,  is  responsible. 
Xelyear  v.  Hawke,  5  Esp.  72;  Alexander  v.  Gibson,  2  Campb.  555; 
Williamson  v.  Canaday,  25  N.  C.  349.  Where  the  agent  of  the  in- 
sured, in  effecting  an  insurance,  makes  a  false  and  unauthorized  rep- 
resentation, the  policy  is  void.  Where  one  of  two  innocent  persons 
must  suffer  by  the  fraud  or  negligence  of  a  third,  whichever  of  the  two 
has  accredited  him,  ought  to  bear  the  loss.  Fitzherbert  v.  Mather,  1 
T.  R.  12.  The  holder  of  a  note  is  responsible  for  representations  made 
by  a  broker  employed  to  sell  it,  though  contrary  to  his  instructions. 
Lobdell  v.  Baker,  1  Mete.  (Mass.)  193,  35  Am.  Dec.  358.  A  principal 
who  sues  to  enforce  a  contract,  is  bound  by  the  representations  made 
by  his  agent,  in  order  to  induce  the  opposite  party  to  make  it.  Ben- 
nett V.  Judson,  21  N.  Y.  238;  Ehvell  v.  Chamberlain,  4  Bosw.  320; 
Id.,  31  N.  Y.  611.  So  a  debtor  cannot  have  the  benefit  of  a  compro- 
mise and  release,  effected  by  his  agent,  without  adopting  all  the  rep- 


dlTi)'^."  CREATION  OF  THE  RELATION  12^^^*^ 

resentations  made  by  the  agent   to  the   creditors,  in   negotiating'  it.'°^ 

Crans  v.  Flunter,  28  N.  Y.  389.     If  an  agent  borrows  money  for  his 

principal,  and  procures  another  to  become  surety,  and  the  surety  after- . 

wards  pays  the  debt,  the  principal  is  answerable  to  the  surety.     Hig-     ,  *■** 

gins  V.  Bellinger,  22  Miss.  397.    There  is  a  very  strong  case  in  Barber^/  " 

V.  Britton,  26  Vt.   112,  60  Am.  Dec.  301,  where  the  defendant  sent 

a  servant  to  employ  the  plaintiff,  who  was  a  physician,  to  visit  a  boy  '  " 

who  had  been  injured  in  their  service,  and  directed  him  to  tell  the 

plaintiff  that  they  would  pay  for  the  first  visit.     The  servant  neglected  , 

to  mention  this,  and  employed  the  plaintiff  generally.    He  attended  the" 

boy  until  he  recovered,  and  the  defendants  were  held  liable  for  his,  ^-^*'^-^€gLlj-t 

whole  bill.    Many  of  these  cases  are  put  upon  an  implied  authority,  %/ 

but  the  more  reasonable  ground,  as  it  seems  to  me,  is  that  the  party, 

having  enjoyed  a  benefit,  must  take  it  cum  onere. 

The  defendant  in  this  case  received  a  note  signed  by  the  plaintiff', 
which  was  delivered  to  the  defendant's  agent,  upon  the  faith  of  an 
undertaking  that  he  would  protect  it  at  maturity.  He  has  enjoyed  the 
benefit  of  the  transaction.  He  used  the  note  in  his  business,  and 
doubtless  received  the  proceeds  of  its  discount.  The  plaintiff  has  been 
obliged  to  pay  it  at  maturity,  as  his  possession  of  the  note  with  the 
defendant's  endorsements  proves,  at  least  prima  facie.  He  is  now 
seeking  to  enforce  the  contract  evidenced  by  the  receipt.  Why  shall 
not  the  defendant  bear  the  burden  of  the  transaction,  as  he  has  re- 
ceived the  benefit?  If  the  note  was  not  an  accommodation  note,  but 
founded  on  value;  if  the  plaintiff  did  owe  the  defendant  the  amount 
of  it,  and  the  defendant  was  not  bound  to  protect  it  at  maturity,  then 
there  was  a  palpable  fraud  committed  by  the  plaintiff,  in  requiring 
the  agent  to  sign  such  a  receipt,  and  this  would  be  a  full  defence  to 
the  action. '^^ 

Judgment  reversed,  and  procedendo  awarded. 


NATIONAL  IMPROVEMENT  &  CONSTRUCTION  CO.  v. 

MAIKEN. 

(Supreme  Court  of  Iowa,   1S!)7.     103  Iowa,  118,  72   N.  W.  431.) 

Suit  in  equity  to  recover  the  contract  price  for  erecting  a  canning 
factory  for  defendants.  The  latter  allege  failure  to  fulfill  the  con- 
tract, and  a  compromise  settlement  with  one  Silvers,  agent  of  plain- 
tiff. Plaintiff  denies  the  authority  of  Silvers  to  do  more  than  receive 
payments.     Appeal  from  judgment   for  defendant. 

Dkk.mjcr,  J.''*  *  *  *  Now,  it  must  be  conceded  that  Silvers  did 
not  have  authority  to  settle  the  dispute  between  these  parties.     He  as- 

»8  See,  al.so,  I>oIvln  v.  Am.  Harrow  Co.,  125  Gu.  091),  54  S.  E.  TOO,  2S  L.  \\. 
A.  (N.  .^.)  TS.'j  (l!)0<;). 

6*  Part  of  the  opinion  Is  omitted. 


1  «wC  X 


^\Jt\ 


{A^- 


V2'2  'i  Tin:  itKi.AiioN  (Parti 

suiucd  to  possess  tills  power.  lio\ve\  er.  and  defendants  paid  liini  re- 
l\ins^  upon  tlie  truth  of  his  ehiini.  lie  received  the  money,  lielivered 
ui>  the  eontraet.  eonveyeil  the  properly  t.)  the  defendants,  delivered 
them  his  power  of  attorney,  and  took  the  money  reeeived  in  settle- 
ment with  him  to  Chieajjo.  When  he  arrived  there,  he  reported  his 
doinq;s  to  his  principal.  As  soon  as  they  were  advised  as  to  what  he 
had  done,  they  attempted  to  repudiate  and  rescind  his  action,  and 
the  controlling  question  in  the  case  is  whether  or  not  they  did  rescind. 

The  well-settled  rule  of  law  is  that,  wdien  an  agent  transcends  his 
power,  his  principal,  upon  heing  informed  of  the  transaction,  must 
reinuliate  or  rescind  the  same  within  a  reasonable  time,  or  he  will  be 
held  to  have  ratified  the  act.  It  is  also  elementary  that  a  princii)al 
cannot  ratify  a  part  of  the  agent's  unauthorized  acts,  and  reject  the 
remainder.  The  rule  has  thus  been  stated  in  the  case  of  Bryant  v. 
Moore.  26  Me.  84,  45  Am.  Dec.  96:  "There  is  no  doubt  that  if  one 
person  knows  that  another  has  acted  as  his  agent  without  authority, 
or  has  exceeded  his  authority  as  agent,  and  with  such  knowledge  ac- 
cepts money,  property,  or  security,  or  avails  himself  of  advantages 
derived  from  the  act,  he  will  be  regarded  as  having  ratified  it.  *  *  * 
If.  for  instance,  a  merchant  should  authorize  a  broker,  by  a  written 
memorandum,  to  purchase  certain  goods  at  a  price  named,  and  the 
broker  should  exhibit  it  to  the  seller,  and  yet  should  exceed  the  price, 
and  this  should  be  made  known  to  the  merchant  when  he  received 
the  goods,  if  he  should  retain  or  sell  them  he  would  ratify  the  bar- 
gain made  by  the  broker,  and  be  obliged  to  pay  the  agreed  price." 
And  in  the  case  of  Benedict  v.  Smith,  10  Paige,  126,  the  court,  in 
discussing  a  question  ruled  by  the  same  principle  as  the  one  at  bar, 
said :  "  *  *  *  But  where  one  person  assumes  to  act  as  the  agent 
of  another,  without  authority,  the  person  for  whom  he  assumes  to 
act  cannot  claim  the  benefit  of  his  agency  in  part  only,  and  reject  it 
as  to  the  residue  of  the  transaction.  And  where  the  attorney  of  rec- 
ord goes  beyond  his  general  power  in  compromising  or  taking  security 
for  a  debt  intrusted  to  him  for  collection,  if  the  client,  upon  being 
informed  of  the  transaction,  does  not  dissent  without  any  unreason- 
able delay,  the  court  may  presume  the  attorney  had  a  special  power 
thus  to  act ;  especially  where  the  client  receives  the  benefit  of  the  se- 
curities taken  for  him  by  the  attorney." 

Appellant  recognized  this  rule  of  law,  and,  in  giving  the  notice  to 
which  we  have  referred,  attempted  to  repudiate  the  transaction ;  and 
the  real  question  is  whether  or  not  it  did  so.  It  gave  notice  of  the 
repudiation,  and  demanded  the  return  of  the  property  and  of  the  pa- 
pers delivered  to  the  defendants,  but  the  only  return  it  made  of  the 
money  was  to  deposit  it  to  the  order  of  the  president  of  the  canning 
company,  in  a  building  in  Chicago,  with  notice  that,  if  the  property 
and  papers  were  not  returned  and  the  money  accepted,  it  would  credit 
it  upon  defendants'  account.  Having  received  the  money  from  the 
defendants  at  Moravia,  it  was  the  duty  of  plaintitT,  in  case  it  desired 


Ch.  4)  CREATION  OF  THE  RELATION  128 

to  rescind,  to  offer  the  same  back  to  them  at  that  place.  Defendants 
were  not  required  to  go  to  Chicago  or  to  any  other  place  to  get  it. 
It  had  come  into  the  possession  of  plaintiff  through  the  acts  of  its 
agent, — unauthorized  though  they  may  have  been, — and  it  was  its  duty 
to  tender  the  same  back  to  the  defendants  at  the  place  where  received. 
Eadie  v.  Ashbaugh,  44  Iowa,  519;  Pars.  Cont.  (6th  Ed.)  p.  679; 
Story,  Ag.  §  259 ;  Miles  v.  Ogden,  54  Wis.  573,  12  N.  W.  81 ;  Strasser 
V.  Conklin.  54  Wis.  102.  11  N.  W.  254;  Ehvell  v.  Chamberlin.  31  N. 
Y.  611;  Hatch  v.  Taylor,  10  N.  H.  538;  Bank  v.  Oberne,  121  111. 
25,  7  N.  E.  85. 

As  the  plaintiff'  did  not  restore  the  money  collected  by  Silvers  on 
the  faith  of  the  settlement,  but,  on  the  contrary,  accepted  it.  and  un- 
dertook to  apply  it  on  the  defendants'  account,  it  cannot  be  heard  to 
say  that  the  acts  of  its  agent  were  not  authorized.  Defendants  were 
not  compelled  to  act  under  the  notice  given  them  by  the  plaintiff  until 
their  money  was  returned,  or  offered  to  be  returned,  at  Moravia,  Iowa. 
An  offer  to  deliver  it  to  them  at  Chicago  was  not  sufficient,  unless, 
possibly,  they  or  some  of  them  authorized  to  receive  it  were  present 
in  Chicago  when  the  tender  was  made.  The  case  relied  upon  by  ap- 
pellant (Harper  v.  Insurance  Co.,  5  C.  C.  A.  505,  56  Fed.  281)  clearly 
announces  this  doctrine.  There  are  a  few  exceptions  to  these  general 
and  well-recognized  rules.  For  instance,  it  is  held  that,  when  a  party 
has  fraudulently  procured  the  execution  of  a  contract,  he  is  not  enti- 
tled to  an  offer  to  restore  what  he  has  received  as  a  condition  precedent 
to  rescission.  Hendrickson  v.  Hendrickson,  51  Iowa,  68,  50  N.  W. 
287.  Again,  it  has  been  held  that  if  one,  by  fraudulent  representa- 
tions, procures  a  settlement  and  discharge  of  a  cause  of  action,  it  is 
merely  a  recci])t  for  a  gratuity,  and  plaintiff  may  maintain  his  action 
without  returning  the  money  paid.  O'Brien  v.  Railway  Co.,  89  Iowa, 
644,  57  N.  W.  425.  These  cases  are  based  upon  the  doctrine  that  one 
who  attempts  to  rescind  a  transaction  on  the  ground  of  fraud  is  not 
required  to  restore  that  which  he  would  be  entitled  to  retain  either 
by  virtue  of  the  contract  sought  to  be  set  aside  or  of  the  original  lia- 
bility. See,  also,  Allerton  v.  Allerton,  50  N.  Y.  670;  Bebout  v.  Bodle, 
38  Ohio  St.  500.  Another  exception  recognized  by  some  of  the  au- 
thorities is  to  this  effect:  that  "ratification  does  not  arise  when  the 
principal  accepts  the  results  of  an  unautiiorized  act,  not  as  a  matter 
of  choice,  but  merely  for  his  own  protection,  to  prevent  further  loss 
or  liability  therefrom."  This  exception  is  recognized  in  the  ft)llowing 
among  other  cases:  Triggs  v.  Jones,  46  Minn.  277,  48  N.  W.  1113; 
Mills  v.  Berla  (Tex.  Civ.  App.)  23  S.  W.  910;  Nye  v.  Swan,  49  Minn. 
431.  52  N.  W.  39;   Crooker  v.  Appleton,  25  Me.  131. 

Without  committing  ourselves  to  this  last-named  exception,  it  is 
suOicient  to  say  that  there  is  no  claim,  either  in  the  pleadings  or  in 
argument,  that  plaintiff  was  justified  in  withholding  the  tuoney  under 
any  such  rule.  Its  claim  in  this  respect  is  that  dcfeiulants  knew  of 
the  agent's  authority,  and  that  they  were  guilty  of  fraud  in  making 


124  Tin:  TiKr.A'PioN  (Parti 

the  settlement,  and  that  the  case  conios  iukKt  (lie  first  exception  named, 
whioli  we  have  recosjnized  as  hcin^i;  the  law.  True  it  is  tiiat  defend- 
ants knew  of  the  terms  of  the  ao^ent's  power  of  attorney,  hut  it  is  also 
true  that  they  believed  from  his  representations,  and  from  the  con- 
struction they  placed  upon  the  instrument,  that  he  had  full  power 
to  settle  the  dispute  and  compromise  the  claim.  There  is  no  evidence 
that,  in  eiTecting  the  settlement,  they  intended  to  defraud  the  plaintiff. 
On  the  contrary,  they  aeteil  in  the  utmost  good  faith.  They  did  not 
intentl  to  pay  plaintitT  any  money  except  in  settlement  of  the  claim ; 
nor  can  their  payment  be  said  to  be  a  mere  gratuity,  as  in  the  O'Brien 
Case.  The  case  of  Stainer  v.  Tysen,  3  Hill,  280,  relied  upon  by  ap- 
pellant, is  not  in  point.  But,  aside  from  all  this,  the  question  here  is 
not  one  of  repudiation  of  contract  or  settlement  because  of  fraud,  but 
rather  as  to  an  agent's  power  to  make  a  settlement,  and  the  exception 
has  no  application.  If,  with  the  authority  of  the  agent  conceded,  there 
was  a  question  as  to  the  character  of  the  settlement,  there  might  be 
room  for  application  of  the  doctrine  announced  in  the  Hendrickson 
Case. 

The  ultimate  question  here  is  the  authority  of  the  agent.  He  was 
not,  as  we  have  seen,  expressly  authorized  to  make  the  settlement. 
He,  however,  assumed  to  do  so,  and  his  principal  accepted  the  benefits 
thereof  with  full  knowledge  of  what  had  been  done.  Having  ratified 
the  acts  of  its  agent,  the  transaction  was  the  same  in  law  as  if  ex- 
pressly authorized.^ °  If  authorized,  there  was  no  fraud,  and  conse- 
quently the  plaintiff  was  not  justified  in  retaining  the  money  while 
at  the  same  time  asserting  that  its  agent  was  guilty  of  fraud.  It  can- 
not take  the  benefits  of  its  agent's  contract,  and  at  the  same  time  re- 
pudiate its  burdens.  The  case  of  Hakes  v.  Myrick,  69  Iowa,  189,  28 
N.  W.  575,  recognizes  this  distinction,  although  it  is  not  made  as  prom- 
inent as  it  might  have  been.  As  the  account  was  fully  settled  by 
plaintiff's  agent,  it  is  not  entitled  to  recover.    Affirmed. 

5  5  When  a  transaction  contains  several  independent  and  severable  things, 
some  within  and  some  beyond  the  agent's  authority,  the  principal  may  adoi)t 
the  former  and  repudiate  the  latter;  but  not  when  the  transaction  is  an  en- 
tirety. Nye  V.  Swan,  49  Minn.  431,  52  N.  W.  39  (1892);  Miller  v.  Board  of 
p:ducation  of  City  of  Sacramento,  44  Cal.  166  (1872).  When  the  third  person 
knows  the  agent's  want  of  authority,  he  cannot  set  up  a  ratification  of  the 
unauthorized  jiart  from  acceptance  of  that  which  was  authorized.  Bryant 
V.  Moore,  26  Me.  84,  45  Am,  Dec.  96  (1846) ;  Watson  v.  Bigelow,  47  Mo.  413 
(1871).  Compare  Henderson  v.  Railway  Co.,  17  Tex,  560,  576,  67  Am.  Dec. 
675  (1856). 

Neither  can  the  ratification  of  one  act  be  established  from  a  previous  ratifi- 
cation of  another  similar,  but  distinct,  act,  Forsyth  v.  Day,  41  Me,  382  (1856), 
ante,  p.   76, 

So  also  ratification  by  a  railway  company  of  a  promise  by  an  agent  to 
pay  plaintifE  a  sum  of  money  does  not  ratify  an  additional  promise  by  the 
agent  to  give  defendant  employment  for  life,  of  which  promise  the  company 
had  no  knowledge,  even  though  the  company  made  the  payment  and  furnished 
the  employment  for  a  time.  Bohanan  v.  B.  &  M.  II.  Co.,  70  N.  H,  526,  49 
Atl.  103  (1900).  To  the  same  effect  is  St.  .Tohn  &  Marsli  Co.  v.  Corn  well, 
52  Kan.  712,  35  Pac,  785  (1894) ;  Koberts  v,  Francis,  123  Wis,  78,  100  N.  W. 
1076  (1904). 


X 


Ch.  4)  CREATION  OF  THE  RELATION  125 

(G)  New  Consideration 
GRANT  V.  BEARD. 

(Supreme  Judicial  Court  of  New  Hampshire,  1870.     50  N.  H.  129.) 

Assumpsit  to  recover  for  repairs  on  two  wagons.    Plaintiff  alleged        ^~^ 
that  defendants'  father,  who  brought  the  wagons  to  be  repaired,  was 
their   agent   and   could  and   did  bind   them   to   pay    for   the   repairs. 
Whether  the  father  was  their  agent,  whether  they  owned  the  wagons     /^^y/   >/ 
or  received   any  benefit  from   the  repairs,   and  whether  they  subse- 
quently assented  to  and  ratified  the  contract,  were  the  questions  in  X^ 
dispute,  on  wWch  the  evidence  was  conflicting.-    -                                                                 ; 

Foster,  J.  [The  ratification,  upon  fulUciTowledge  of  all  the  circum- 
stances of  the  case,  of  an  act  done^J^rfone  who  assumes  to  be  an  agent, 
is  equivalent  to  ajpvior  authorit^^.     By  such  ratification  the  party  will  j 

bound  as  fully7To~alTmtents  afad  purposes,  as  if  he  had  originally 
fiven  express  authority  or  direction  concerning  the  act. 

A  parol  contract  may  be  ratified  by  an  express  parol  recognition 
)f  the  act,  or  by  conduct  implying  acquiescence,  or  by  silence  when 
the  party,  in  good  faith,  ought  to  speak.  J  And  so  the  principal  may  j. 

be  estopped  to  deny  the  agent's  original  authority.    Story  on  Agency, 
§  239;   Metcalf  on  Contracts,  112;    UajA^  v.  Taylor,  10  N.  H.  538;      '         ^^/^\^c^ 
Despatch  Line  v.  Bellamy  Mfg.  Co.,  12^N.  H.  232,  37  Am.  Dec.  203 ;  ^^ 

Davis  V.  School  District,  44  N.  H.  399;    Warren  v.  Wentworth,  45 
N.  H.  564;   Forsyth  v.  Day,  46  Me.  194;   Ohio  &  Mississippi  R.  Co.  '-^^ 
V.  Middleton,  20  111.  629.  _  ./r^^U.  ^     ,, 

Such  ratification  relates  back  to  and  incorporates  the  original  con-  y 

tract  or  transactions,  so  that,  as  between  the  parties,  their  rights  and  /^  ^^^^tA^ 

interests  are  to  be  considered  as  arising  at  the  time  of  the  original      "^Ct-     ^^^ 
act,  and  not  merely  from  the  date  of  the  ratification ;    and  a  suit  to  //"^i^ l^^ 

enforce  the  obligation  assumed  by  the  party  who  ratifies  is,  to  all  in-  ,  "V^ 

tents  and  purposes,  a  suit  founded  upon  the  original  act  or  contract,       -t^    y 
and  not  on  the  act  of  ratification.     Davis  v.  School  District,  before    ;  '^^  . 

cited;   Low  v.  Railroad,  46  N.  H.  284;  Doggett  v.  Emerson,  3  Story, ''^ 


cited. 

Therefore  the  original  consideration  applies  to  the  ratification,  thus 
made  equivalent  to  an  original  contract,  and  supports  the  implied 
promise  upon  which  the  present  action  is  founded. 

The  ratification  operates  directly,  and  not  merely  as  presumptive 
evidence  that  the  act  was  originally  done  by  the  authority  of  the  de- 
fendants ;  and  therefore  it  is  unnecessary  to  consider  whether  or  not 
the  evidence  tends  to  show  an  original  authority.  The  subsequent 
assent  is,  per  se,  a  confirmation  of  the  agent's  act;    and  there  is  no 


l-()  TiiK  KiM.ATioN  (Parti 

valiil  ilistinotion  botwooii  a  ratiticatioii  oi  iho  aj^c'iU's  act,  and  a  dircii 
aiul  oriii^iiKil  piH)inise  to  pay  for  the  services  reiulered  by  the  plaintiff. 
W  herever  there  wouKl  liave  been  a  consideration  for  the  original 
engagement  if  no  agent  or  party  assuming  to  act  as  agent  had  inter- 
vened, such  original  consideration  is  sufficient  to  sustain  the  act  of 
ratification. 

In  none  of  the  cases  cited  is  the  subject  of  a  new  consideration,  to 
support  the  ratification,  alluded  to  as  necessary ;  but  the  logical  de- 
duction from  the  principle  that  the  ratification  relates  back  to  and  cov- 
ers the  original  agreement,  is  wholly  inconsistent  with  such  a  propo- 
sition ;  and  the  contrary  doctrine  is  expressly  held  in  numerous  cases. 
Commercial  Bank  of  Buffalo  v.  Warren,  15  N.  Y.  583,  and  cases  cited. 

There  was  abundant  evidence,  in  the  present  case,  from  which  the 
jury  might  have  found  that  the  defendants  owned  the  wagons  and 
received  a  positive  benefit  from  the  repairs ;  but  such  evidence  and 
such  finding  were  wholly  unnecessary,  because  it  is  not  material  that 
the  party  making  the  promise  should  receive  a  benefit  from  the  other 
party's  act ;  it  is  sufficient  if  any  trouble,  prejudice,  expense,  or  incon- 
venience accrued  to  the  party  to  whom  the  promise  is  made.  Metcalf 
on  Contracts,  163  ;    1   Parsons  on  Contract,  431. 

We  are  therefore  of  the  opinion  that  the  instruction  of  the  court  to 
the  jury  "that  if  they  found  that  the  defendants  did  not  authorize 
their  father  to  make  the  contract  as  their  agent,  but  afterwards  as- 
sented to  what  he  had  done,  their  assent  would  not  make  them  liable 
unless  they  owned  the  wagons  at  the  time  they  were  repaired,  or  re- 
ceived some  benefit  from  the  repairs,"  was  erroneous ;  and  for  this 
reason  the  verdict  must  be  set  aside,  and  a  new  trial  granted."". 

(H)  Necessity  of  Intent  •.jp^ 

BROWN  v.  HENRY. 
(Supreme  Judicial  Court  of  Massachusetts,  1899.    172  Mass.  559,V52  N.  E.  1073.) 

Action  on  contract  to  recover  damages  for  refusal  to  deliver  about 
25,000  pounds  of  coal,  alleged  to  have  been  sold  to  plaintiffs  by  a 
broker.  The  latter  gave  a  "bought  note,"  which  defendants  rejected. 
Defendants  except  to  verdict  for  plaintiffs. 

Knowlton,  J.  It  appeared  upon  the  undisputed  evidence  that  the 
broker  inserted  in  the  written  memorandum  of  sale  certain  provisions 
whieh  were  not  expressly  authorized  by  the  defendants.  The  jury 
found  that  there  was  no  custom  under  which  he  could  bind  the  de- 
fendants by  these  agreements.  He  was  not  the  defendants'  general 
agent,  and  the  terms  of  his  authority  to  make  a  sale  could  be  inquired 

56  See,  also.  First  National  Bank  of  Trenton  v.  (Jay,  <;.'{  Mo.  P,P,,  21  Am.  Rep. 
430  (1S7G),  ante,  p.  95. 


Ch.  4)  CREATION  OF  TUE  RELATION  l-~  J 

into.     He  could  bind  the  defendants  only  by  such  contract  as  they  ^ 

authorized   him   to   make.      Codchngton   v.   Goddard,    16   Gray,   436  ;■  t-^  ^--c^ 

Remick  V.  Sandford,  118  Mass.  102.  ,         .       /  ' 

Under  the  instructions  of  the  court,  and  the  finding  above  stated,    w>^j^*--C<i^.vr, 
the  verdict  for  the  plaintitTs  must  rest  on  a  landing  that  the  defend-   jy^    /-  \ 

ants  ratified  the  broker's  contract.     The  jury  were  allowed  to   find    .    /1-vf^  y.-^- 
ratification  on  the  ground  that  the  plaintiffs  were  right,  and  the  de- 
fendants  wrong,    in    regard   to   the   defendants'    contention    that   the 
broker  was  not  authorized  to  sell  the  wool  at  the  price  named  in  the  ., 

contract;  it  appearing  that  the  defendants  stated,  as  their  reason  for       /^-^J_ 
repudiating  the  contract,  that  the  broker  had  no  authority  to  sell  the  ^^'■^■^  r    / 

wool  at  that  price,  and  failed  to  make  any  objection  to  the  provisions 
of  the  contract  about  credit,  and  the  allowance  of  interest,  unexpired     i 
storage,  and  fire  insurance.     These  latter  provisions  were  inserted  ^"^^^/fy^f 
the  contract  by  the  agent  without  authority.     There  was  no  evidence  •  ^' 

that  the  situation  of  the  plaintiffs  was  changed,  or  that  their  rights 
were  in  any  way  affected  by  reason  of  the  form  of  the  defendants' 
objection  and  disavowal.  '  '~^K^ 

\\'here  something  is  to  be  done  by  one  of  two  parties  as  a  condition     '.^"j^  ' 

precedent  to  his  exercise  of  a  right  against  the  other,  the  other  may 
waive  the  performance,  either  wholly  or  in  part.    If  there  is  an  attempt    y .  /      j 
at  performance,  which  falls  short  of  the  requirement,  and  if  objection        *L^m       ^ 
is  made  by  the  party  for  whom  it  is  done,  with  a  statement  of  the        »  ^^^^ 

grounds  of  his  objection,  the  objector  often  is  held  to  have  waived  his    >   ,  ^"f-A 

right  afterwards  to  object,  on  other  grounds,  when  the  other  has  gone     ^^ 
forward,  relying  upon  the  implied  representation  that  the  performance  ^^^       ^  wi 
is  satisfactory  in  other  particulars.     Clark  v.  Insurance  Co.,  6  Cush.  ^/^ 
342,  53  Am.  Dec.  44;    Searle  v.  Insurance  Co.,  152  Mass.  263,  25  X.  / 

E.  290;  Curtis  v.  Aspinwall,  114  Mass.  187,  19  Am.  Rep.  332;  Insur-      ,/ 
ance  Co.  v.  Norton,  96  U.  S.  234,  24  L.  Ed.  689 ;   Titus  v.  Insurance   ^     \j 
Co.,  81  N.  Y.  410.    These  cases  rest  upon  the  ground  that,  when  one       '  ^^ 
is  stating  objections,  a  failure  to  disclose  a  ground  of  objection,  in  a 
particular  which  easily  could  be  remedied,  tends  to  mislead  the  other 
l)arty  to  his  detriment,  and  is  so  contrary  to  justice  and  good  morals  as 
to  work  an  estoppel  against  doing  it  afterwards. 

Xo  such  princij)lc  is  applicable  to  the  present  case.  We  have  an 
unauthorized  contract  made  by  an  agent.  The  plaintiffs  had  no  rights 
under  it  immediately  after  it  was  made.  They  have  no  rights  under 
it  now,  unless  the  defendants  ratified  it.  "Ratification  of  a  past  and 
completed  transaction,  into  which  an  agent  has  entered  without  au- 
thority, is  a  purely  voluntary  act  on  the  part  of  the  principal.  No 
legal  obligation  rests  upon  him  to  sanction  or  adopt  it."  Combs  v. 
Scott.  12  Allen,  493;  I'.ank  v.  Crafts.  2  .\llcn.  269.  If,  however,  one 
is  acting  in  the  execution  of  a  general  power,  but  in  a  mode  not  sanc- 
tioned by  its  terms,  and  if  any  benefit  comes  to  llie  i)riiKipal  from  the 
act,  ratification  may  be  implied  jjretty  quickly  from  lapse  of  time  with 
knowledge  of  the  circumstances.     Foster  v.  Rockwell,  104  Mass.   167. 


128  TUK  Kin.ATioN  (Parti 

The  evidence  is  tindisputod  lliat,  within  a  rcasonn1)lc  time  after 
hoiui;-  informed  of  the  contract,  the  defendants  in  the  present  case 
repudiated  it.  The  naked  (piestion  is  presented  whether,  if  a  prin- 
cipal, on  learning  of  an  unauthorized  contract  of  an  a,y;ent,  repudiates 
it.  giving  a  reason  for  so  doing  which  proves  to  be  without  foundation, 
such  repudiation  is  equivalent  to  an  adoption  of  it.  In  the  absence  of 
anything  be\ond  this  to  work  an  estoppel,  we  are  of  opinion  that  it  is 
not.  Ordinarily,  ratitication  of  an  agent's  act  is  a  mere  matter  of 
intention. "^^  In  the  present  case,  the  defendants,  as  soon  as  the  facts 
were  ascertained,  manifested  in  the  clearest  manner  their  intention  not 
to  ratify,  and  their  subsequent  conduct  has  all  been  consistent  with 
their  original  repudiation  of  the  attempted  sale.  They  could  not  re- 
pudiate it  in  part,  and  adopt  it  in  part.  1  Am.  &  Eng.  Enc.  Law  (2d 
Ed.)  1192,  and  cases  cited. 

There  is  a  class  of  cases  in  which  the  principal  receives  a  direct 
benefit  from  an  act  of  an  agent,  and  it  is  held  that,  if  he  retains  this 
benefit  for  a  considerable  time  after  he  obtains  full  knowledge  of  the 
transaction,  he  thereby  ratifies  the  act.  Brigham  v.  Peters,  1  Gray, 
139;  Sartwell  v.  Frost,  122  Mass.  184;  Coolidge  v.  Smith,  129  Mass. 
554.  Here,  too,  there  is  an  element  of  estoppel  which  does  not  exist 
in  the  case  at  bar.  One  cannot  have  the  benefit  of  an  unauthorized 
act  of  an  agent  without  confirming  it.  Ordinarily,  a  principal  is  not 
called  upon  to  give  reasons  for  declining  to  be  bound  by  an  act  under- 
taken without  authority.  The  controlling  reason  is  that  it  was  unau- 
thorized. The  particulars  in  which  it  lacks  authority,  usually,  are  of 
no  importance.  If  the  other  party  relies  upon  it,  he  has  the  burden 
of  showing  ratification.  If  the  principal  insists  that  it  is  unauthorized, 
and  does  nothing  and  says  nothing  which  warrants  the  other  party  in 
treating  it  as  ratified,  the  mere  fact  that  he  is  incorrect  in  his  statement 
of  the  particulars  of  the  want  of  authority  does  not  change  his  repudia- 
tion of  the  act  into  an  adoption  of  it. 

We  are  of  opinion  that  the  instructions  in  regard  to  ratification  were 
erroneous,  and  that  the  jury  should  have  been  instructed  that  there 
was  no  evidence  that  the  defendants  ratified  the  contract  declared  on. 
See  Price  v.  ISIoore,  158  Mass.  524,  33  N.  E.  927.  Exceptions  sus- 
tained. 

57  In  Smith  v.  Flotcher,  75  Minn.  189,  77  N.  W.  800  (1899),  it  was  said  by 
Mitcliell,  J. :  "Ratification,  lilce  autliorization,  is  generally  tlie  creature  of 
intent;  but  that  intent  may  often  be  presumed  by  the  law  from  the  conduct 
of  the  party,  and  that  presumption  may  be  conclusive,  even  against  the  actual 
intention  of  the  party,  where  his  conduct  has  been  such  that  it  would  be  in- 
e<iuitable  to  others  to  permit  him  to  assert  that  he  had  not  ratified  the  un- 
authorized act  of  his  agent." 


Ch.  4)  CREArriON    OF    THE   RELATION  129 


IV.    MAKNtR  OF  RaTII^ICATIOIT  '       *     '         ' 

(A)  In  General 

ZOTTMAN  V.  CITY  AND  COUNTY  OF  SAN  FRANCISCO 
(Supreme  Court  of  California,  1S62.    20  Cal.  96,  81  Am.  Dec.  96.) 

Action  to  recover  for  extra  services  performed  by  plaintiff  in  mak- 
ing improvements  on  a  certain  square  in  San  Francisco.    A  contract 
was  made  by  the  common  council,  but  afterwards  the  special  com-  -^d^^vy^y^KAjh 
mittee  and  superintendent  appointed  by  the  council  concluded  that  a    ,       "•■;;  ' 

stone  base  for  an  iron  fence  should  be  substituted  for  the  wooden 
one,  contracted  for,  and  that  the  fence  should  be  painted.  Accord- 
ingly in  the  presence  of  the  other  city  officers  they  ordered  the  con- 
tractor to  perform  this  extra  work,  and  assured  him  the  city  would 
pay.  During  the  progress  of  the  work  all  the  members  of  the  com- 
mon council  were  aware  of  the  order  and  of  the  extra  work  done, 
but  the  bill  was  never  paid.  The  city  charter  provided  for  action  by- 
the  council  by  aye  and  nay  vote,  with  publication  in  a  city  paper.  "All 
contracts  for  work"  were  to  be  let  to  the  lowest  bidder  after  public 
notice.    From  judgment  for  defendant,  plaintiff  appeals. 

Field,  C.  J.^®  [after  stating  the  facts:]  *  *  *  A  contract 
made  in  disregard  of  these  stringent  but  wise  provisions  cannot  be  the 
ground  of  any  claim  against  the  city.  Individual  members  of  the  com- 
mon council  were  not  invested  by  the  charter  with  any  power  to  im- 
prove the  city  property,  and  any  directions  given  or  contracts  made 
by  them  upon  the  subject,  had  the  same  and  no  greater  validity  than 
like  directions  given  and  like  contracts  made  by  any  other  residents 
of  the  city  assuming  to  act  for  the  corporation.  And  if  individual 
members  could  not  thus  make  any  valid  contract  originally,  they 
could  not  by  any  subsequent  approval  or  conduct  impart  validity  to 
such  contract.  But  we  go  further  than  this;  the  common  council 
even  could  not  by  any  subsequent  action  give  validity  to  a  contract 
thus  made.  The  mode  in  which  alone  they  could  bind  the  corporation 
by  a  contract  for  the  improvement  of  city  property  was  prescribed  by 
the  charter,  and  no  validity  could  be  given  by  them  to  a  contract  made 
in  any  other  manner.  The  rule  is  general  and  applies  to  the  corporate 
authorities  of  all  municipal  bodies;  where  the  mode  in  which  their 
power  on  any  given  subject  can  be  exercised  is  prescribed  by  their 
charter,  the  mode  must  be  followed.  The  mode  in  such  cases  consti- 
tutes the  measure  of  the  power.  Thus,  where  authority  is  conferred 
to  sell  property,  with  a  clause  that  the  sale  shall  be  made  at  pu1)lic 
auction,  the  mode  prescribed  is  essential  to  the  vahflity  of  the  sale; 

•  8  Part  of  the  opinion  is  omitted. 
GoDD.I'u.&  A. — 9 


/ 


130  'nil'  Ki'.i.ATK^N  (Part  1 

iiulcoil  there  is  no  power  lo  sell  in  anv  oilier  way.  Aside  from  the 
mode  designated  there  is  a  want  oi  all  power  on  the  suhjeet.  This  is 
too  obvious  to  require  argument,  and  so  are  all  the  adjudications. 
Thus  in  Head  v.  Providence  Insurance  Company,  2  Cranch,  156,  2 
L.  Hd.  229,  Mr.  Chief  Justice  Marshall,  in  .speaking  of  bodies  which 
have  only  a  legal  existence,  says :  "The  act  of  incorporation  is  to 
them  an  enabling  act;  it  gives  them  all  the  power  they  possess;  it 
enables  them  to  contract,  and  when  it  prescribes  to  them  a  mode  of 
contracting,  they  must  observe  the  mode,  or  the  instrument  no  more 
creates  a  contract  than  if  the  body  had  never  been  incorporated."  See 
McCracken  v.  City  of  San  Francisco,  16  Cal.  619;  h'armers'  Loan  & 
Trust  Co.  v.  Carroll,  5  Barb.  649;  New  York  Fire  Insurance  Co.  v. 
Ely,  5  Conn.  568,  13  Am.  Dec.  100. 

As  a  necessary  consequence  flowing  from  these  views,  a  contract 
not  made  in  the  prescribed  mode,  cannot  be  affirmed  and  ratified  in 
disregard  of  that  mode  by  any  subsequent  action  of  the  cori)orate 
authorities,  and  a  liability  be  thereby  fastened  upon  the  corporation. 
Ratification  is  equivalent  to  a  previous  authority ;  it  operates  upon  the 
contract  in  the  same  manner  as  though  the  authority  to  make  the  con- 
tract had  existed  originally.  The  power  to  ratify,  therefore,  necessari- 
ly supposes  the  power  to  make  the  contract  in  the  first  instance;  and 
a  power  to  ratify  in  a  given  mode  supposes  the  power  to  contract  in 
the  same  way.  Therefore,  where  the  charter  of  a  city  authorizes  a 
sale  of  city  property  only  at  public  auction,  a  sale  not  thus  made  is 
from  its  very  nature  incapable  of  ratification,  because  it  could  not 
have  been  otherwise  made  originally.  So  where  the  charter  authorizes 
a  contract  for  work  to  be  given  only  to  the  lowest  bidder,  after  notice 
of  the  contemplated  work  in  the  public  journals,  a  contract  made  in 
any  other  way — that  is,  given  to  any  other  person  than  such  lowest 
bidder — cannot  be  subsequently  affirmed.  Were  this  not  so,  the  cor- 
porate authorities  would  be  able  to  do  retroactively  what  they  are 
prohibited  from  doing  originally. 

We  had  occasion,  in  the  case  of  McCracken  v.  City  of  San  Francisco, 
to  give  to  this  subject  great  consideration,  and  we  there  held,  that 
where  authority  to  do  a  particular  act  can  only  be  exercised  in  a  par- 
ticular form  or  mode,  the  ratification  must  follow  such  form  or  mode, 
and  that  a  ratification  can  only  be  made  when  the  principal  possesses 
at  the  time  the  power  to  do  the  act  ratified.  The  doctrines  there 
laid  down  we  regard  of  vital  importance  for  the  protection  of  the  in- 
terests of  municipal  corporations,  and  without  an  adherence  to  them, 
restrictions  such  as  were  embodied  in  the  charter  of  San  Francisco — 
or  at  present  are  embodied  in  the  consolidation  act — upon  the  cor- 
porate authorities,  may  be  practically  disregarded  and  defeated.  Since 
that  decision  was  rendered,  we  have  had  our  attention  called  to  the 
case  of  Brady  v.  Mayor,  etc.,  of  New  York,  16  How.  Prac.  432,  where 
these  doctrines  are  affirmed  in  an  opinion  of  great  force,  and  applied 
to  an  alleged  contract  for  work  done  upon  a  street  in  the  city  of  New 


Ch.  4)  CREATION  OF  THE  RELATION  131 

York.  The  alleged  contract  in  that  case  was  made  by  the  street  com- 
missioner on  behalf  of  the  city,  and  was  for  the  performance  of  work 
upon  the  street  in  accordance  with  certain  specifications,  the  stipulated 
price  to  be  paid  upon  the  confirmation  of  an  assessment  for  the  work 
by  the  common  council.  The  work  was  performed  in  accordance  with 
the  provisions  of  the  contract,  and  seventy  per  cent  of  the  contract 
price  was  paid,  and  an  assessment  for  the  entire  price  was  made  for 
the  work  and  confirmed.  The  amendment  of  1853  to  the  charter  of 
that  city  requires  that  "all  work  to  be  done  and  all  supplies  to  be 
furnished  for  the  corporation,  involving  an  expenditure  of  more  than 
$250,  shall  be  by  contract  founded  on  sealed  bids  or  on  proposals  made 
in  compliance  with  public  notice  for  the  full  period  of  ten  days ;  and 
all  such  contracts,  when  given,  shall  be  given  to  the  lowest  bidder  with 
adequate  security."  In  consequence  of  the  manner  in  which  the  bids, 
made  upon  the  proposals  for  the  work,  were  tested,  the  lowest  bidder 
could  not  be  ascertained;  it  was  therefore  held  that  the  contract  was 
illegal  and  void.  The  question  was  then  raised  whether,  under  the 
circumstances,  the  defendants  were  liable  for  the  work  done.  And 
this  question  was  discussed  by  the  court  in  two  aspects — whether  they 
were  liable  to  the  plaintiff  as  upon  a  quantum  meruit,  because  the 
work  had  been  performed  and  accepted;  and  whether  the  common 
council  had  the  power  to  waive  the  original  defect  in  the  plaintiff's 
claim,  and  by  their  action  affirm  his  title  to  recover,  so  as  to  give  him 
a  right  of  action,  notwithstanding  the  requirements  of  the  charter  had 
not  been  complied  with. 

It  is  under  similar  aspects  that  the  question  of  the  liability  of  the 
city  of  San  Francisco  presents  itself  in  the  present  case.  "The  corpo- 
ration," said  the  court,  "can  only  act  through  its  chosen  officers  and 
agents.  If  they  not  only  may  pay  for  work  and  labor  actually  done 
without  a  compliance  with  the  statute  requisites,  but  are  legally  bound 
to  such  payment,  then  no  contract  is  necessary,  and  the  restrictions 
in  the  statute  are  a  dead  letter.  If  they  may  dispense  with  a  contract, 
then  and  then  only  can  they  confirm  an  illegal  and  void  contract,  and 
then  also  by  any  accei)tance  of  the  work  and  a  confirmation  of  the 
contract  by  resolution,  they  repeal  the  statute  pro  hac  vice.  The  rela- 
tion which  the  corporation  and  its  officers  bear  to  the  subject,  the 
duties  they  owe  to  the  public  and  those  upon  whom  the  burden  is  to 
fall,  and  the  nature  of  the  powers  they  possess,  forbid  us  to  concede 
any  such  force  to  their  acts.  By  the  charter  the  power  is  limited  and 
it  is  a  familiar  rule  that  corporations  can  only  bind  themselves  by  con- 
tracts they  are  expressly  or  impliedly  authorized  to  make.  It  may 
sometimes  seem  a  hardship  upon  a  contractor  that  all  compensation 
for  work  done,  etc.,  shouUl  be  denied  him  ;  but  it  should  be  remembered 
th.at  he.  no  less  than  the  officers  of  the  corporation,  when  he  deals  in 
a  matter  expres.sly  provided  for  in  the  charter,  is  bound  to  see  to  it 
that  the  charter  is  complied  witli.  If  he  neglect  this,  or  choose  to 
take  the  hazard,  he  is  a  mere  volunteer,  and  suffers  only  what  he  ought 


133  THE  RELATION  (Part  t 

to  liave  anticipatod.  If  the  statute  forbids  the  contract  which  he 
has  made,  he  knows  it,  or  ought  to  know  it,  before  he  places  his  money 
or  services  at  hazard.  The  analogy  drawn  from  the  obligation  of  an 
individual  to  pay  for  work  which  he  accepts,  although  there  has  been 
no  previous  contract  for  its  performance,  wholly  fails  to  reach  the 
present  case.  Here,  neither  the  oiVicers  of  the  corporation  nor  the 
corporation,  by  any  of  the  agencies  through  which  they  act,  have  any 
power  to  create  the  obligation  to  pay  for  the  work,  except  in  the 
mode  which  is  expressly  prescribed  in  the  charter;  and  the  law  never 
implies  an  obligation  to  do  that  which  it  forbids  the  party  to  agree  to 
do.  And  for  the  like  reason  the  defendants  cannot  be  treated  as 
ratifying  the  unauthorized  acts  of  its  agents.  The  difficulty  lies  not 
merely  in  the  want  of  original  power  in  the  agents  to  make  the  con- 
tract, but  in  the  want  of  power  in  the  corporation  itself  to  make  the 
contract  otherwise  than  in  the  mode  prescribed  by  the  charter.  An 
individual  having  power  to  make  a  contract  may  ratify  or  affirm  it, 
when  made  by  one  who  without  authority  assumes  to  be  his  agent, 
but  if  the  individual  have  himself  no  such  power,  he  can  no  more  bind 
himself  retroactively  to  its  performance  by  affirmance  or  ratification 
than  he  could  have  done  so  prospectively  in  the  first  instance.  The 
power  to  ratify  ex  vi  termini  implies  a  power  to  have  made  the  con- 
tract, and  the  power  to  ratify  in  a  particular  mode  implies  the  power 
to  have  made  the  contract  in  that  manner."  *  *  *  6» 
Judgment  affirmed. 

(B)   Written  Ratification 

JUDD  V.  ARNOLD. 
(Supreme  Court  of  Minnesota,  1884.     31  Minn.  4.30,  18  N.  W.  151.) 

Appeal  by  defendants  from  a  judgment  for  restitution  in  an  action 
for  unlawful  detainer. 

GiLFiLLAN,  C.  J.***  Action  under  chapter  84,  Gen.  St.  1878,  to  re- 
cover rented  premises  detained  after  the  expiration  of  the  term.  It 
appears  that  plaintiff  rented  the  premises  to  defendant  Arnold  for 
one  year,  terminating  April  30,  1883 ;  and  February  5,  1883,  he,  as- 
suming to  act  as  plaintiff's  agent,  executed  in  her  name  to  defendants 
Tibbitts  and  Myers  a  written  lease  of  the  premises;  the  term  as  to 
part  of  them  to  commence  May  1,  1883,  and  to  continue  as  to  all  till 
one  year  from  the  last  date.  Arnold  had  no  authority  in  writing  to 
rent  the  premises.  The  lease  stipulated  for  a  gross  monthly  rental 
for  the  rooms.  It  was  therefore  an  entire  and  not  a  severable  lease, 
and  for  a  term  exceeding  one  year.  By  the  terms  of  the  statute  it  was 
required  to  be  in  writing,  and,  being  executed  by  an  agent,  his  au- 

5  8  The  opinion  of  Cope,  J.,  is  omitted. 
«o  Part  of  the  opinion  is  omitted. 


^\ 


I^i/jajLc[ 


Ch.  4)  CREATION    OB'    THE    RELATION  133 

thority  to  execute  it  was  required  to  be  in  writing.  "No  estate  or 
interest  in  lands,  other  than  leases  for  a  term  not  exceeding  one  year, 
*  *  *  shall  hereafter  be  created,  granted,  assigned,  surrendered, 
or  declared,  unless  by  act  or  operation  of  law,  or  by  deed  or  convey- 
ance in  writing,  subscribed  by  the  parties  creating,  granting,  assigning, 
surrendering,  or  declaring  the  same,  or  by  their  lawful  agent  there- 
unto authorized,  by  zvriting."  Section  10,  c.  41,  Gen.  St.  1878.  Our 
statute  of  frauds  is  peculiar,  among  other  things,  in  this :  that  while, 
by  section  10,  authority  in  an  agent  to  execute  an  instrument  creating 
or  conveying  the  estate  must  be  in  writing,  by  section  12  his  author- 
ity to  make  an  executory  contract  to  create  or  convey  it  need  not  be 
in  writing.     Minor  v.  Willoughby,  3  Minn.  225  (Gil.  154). 

A  ratification  by  the  principal  of  the  not  properly  authorized  act 
of  the  agent  must  be  by  an  act  of  the  character  required  for  original 
authority.''^  Where  that  must  be  in  writing,  the  ratification  must  also 
be  in  writing.  Browne,  St.  Frauds,  §  17;  Fitch,  Real  Est.  Ag.  57; 
McDowell  V.  Simpson,  3  Watts,  129,  27  Am.  Dec.  338 ;  Lawrence  v. 
Taylor,  5  Hill,  113;  Ingraham  v.  Edwards,  64  111.  526;  Holland  v. 
Hoyt,  14  Mich.  238.  To  permit  an  oral  ratification  would,  in  many 
cases,  let  in  the  very  evils  which  the  statute  aims  to  exclude.  The  evi- 
dence of  oral  ratification  by  plaintiff  of  the  lease  executed  by  Arnold 
was  therefore  of  no  effect.  Of  course,  a  principal  may,  by  his  acts 
or  declarations,  lay  the  basis  for  an  estoppel  as  to  the  due  authority 
of  the  assumed  agent.  But,  in  a  case  like  this,  to  make  the  assent 
and  acquiescence  of  the  principal,  and  acts  of  the  lessees  in  reliance 
thereon,  operate  as  an  estoppel  as  to  the  authority  of  the  assumed 
agent  to  execute  the  lease,  it  is  essential  that  she  should  have  known 
what  sort  of  lease  the  agent  had  assumed  to  execute  in  her  name. 
The  lessees  must  be  supposed  to  have  known  the  law — that  written 
authority  in  the  agent  was  required  to  execute  such  a  lease.  And 
before  they  could  rightfully  rely  and  act  on  her  assent  to  and  ac- 
quiescence in  a  lease  as  evidence  that  she  had  authorized  it  in  writing, 
they  should  have  been  sure  that  she  was  informed  of  the  character 
of  lease  the  agent  had  assumed  to  execute.  The  only  evidence  as 
to  her  information  on  the  point  was  that  defendant  Arnold  testified 
he  told  her  he  had  agreed  to  rent  the  rooms  to  the  other  defendants 
for  a  year  from  May  1,  1883,  and  defendant  Tibbitts  testified  he  told 
her  he  and  Myers  had  a  lease  for  one  year,  to  commence  May  1,  1883. 
This  was  not  such  a  lease  as  was  in  fact  executed.  The  information 
thus  given  was  not  sufficient  as  a  basis  for  an  estoppel  as  to  the  lease 
in  question.     ♦     *     * 

Judgment  affirmed. 

61  Seo,  also,  Jolinson  v.  Feoht,  isn  Mo.  ?,?,r>,  34.^.  S.T  S.  W.  1077  (1001).  cltliiR 
Ilnwklii.s  V.  MfCrr.nrtv,  110  Mo.  .'.Hi.  1!>  S.  W.  y.'.O  (1S'.»1^I.  nnd  Dcspiilch  IJiit 
of  I'iirk..ts  V.  I'.fllain.vMfK.  Co..  lU  .\'.  11.  'JO."..  1>:UI  L'.-.'J.  :J7  .\in.  Dec  'JO:'.  (1811), 
a  IciuliiiK  f.'isc.  'J'lie  cffcft  of  n  statuto  F)rescril)ii)u'  tlu;  niodo  of  rjitlllcatloa 
is  fUsciis.xcTl  in  Morris  v.  Ewinp.  S  N.   I>.  W,  70  -V   W.  1047  (1808). 


i;U  TiiK  UELATiON  (Part  1 


(C)  Ratlficiitio)!  iDidrr  Seal 
llIvATll  V.  NUTTER. 

(Supivino  Judicial  (^nirt  of  MmIiio.  lS(iL>.     50  Mo.  HTS.) 

Writ  of  tMitry.  Both  parties  claim  under  Charles  D.  Rohhins,  ITeath 
uiuler  his  quitclaim  deed,  dated  February  17,  1858,  Nutter  under  deed 
of  Robbins.  by  Rich,  his  attorney,  dated  May  3,  1854.  Nutter  of- 
fered to  prove  by  Robbins  that  Rich  was  his  agent  under  power  of 
attorney,  given  him  to  enable  him  to  make  the  deed ;  that  Robbins 
told  Heath  he  had  nothing  to  quitclaim,  but  was  induced  by  Ileatli 
to  believe  there  would  be  no  impropriety  in  giving  said  quitclaim  deed ; 
that  he  had  by  letter  and  verbally  ratified  the  act  of  Rich.  The  judge 
ruled  that  the  power  of  attorney  was  not  sufficient  to  authorize  the 
deed  by  Rich,  and  excluded  the  evidence  offered. 

Appleton,  C.  J.  The  power  of  attorney  to  Rich  did  not  empower 
him  to  convey  the  demanded  premises  to  the  inhabitants  of  Tremont. 
The  authority  "to  grant  any  and  all  discharges  by  deed  or  otherwise, 
both  personal  and  real"  as  fully  as  the  principal  might  do,  cannot  be 
fairly  construed  as  enabling  the  agent  to  convey  by  bill  of  sale,  or  by 
deed  of  warranty,  all  the  personal  and  real  estate  of  his  principal. 
Nor  can  the  authority  to  convey  by  deed  be  found  elsewhere. 

Whenever  any  act  of  agency  is  required  to  be  done  in  the  name 
of  the  principal  under  seal,  the  authority  to  do  the  act  must  be  con- 
ferred by  an  instrument  under  seal.  A  power  to  convey  lands  must 
possess  the  same  requisites  and  observe  the  same  solemnities  as  are 
necessary  in  a  deed  directly  conveying  the  land.  Gage  v.  Gage,  30 
N.  H.  424;  Story  on  Agency,  §§  49,  50;  Montgomery  v.  Dorion, 
6  N.  H.  250.  So  the  ratification  of  an  unauthorized  conveyance  by 
deed  must  be  by  an  instrument  under  seal.  Story  on  Agency,  §  252. 
A  parol  ratification  is  not  sufficient.  Stetson  v.  Patten,  2  Greenl.  359, 
11  Am.  Dec.  Ill;  Paine  v.  Tucker,  21  Me.  138,  38  Am.  Dec.  255; 
Hanford  v.  McNair,  9  Wend.  54;  Despatch  Line  Co.  v.  Bellamy  Mfg. 
Co.,  12  N.  H.  205,  37  Am.  Dec.  203. 

The  plaintiff  received  his  conveyance  with  a  full  knowledge  of  the 
equitable  rights  of  the  tenants.  The  remedial  processes  of  a  court 
of  equity  may  perhaps  afford  protection  to  the  defendants.  At  com- 
mon law  their  defence  fails. 

Defendants  defaulted. 


^Jjyi 


Ch.  4)  CREATION  OF  THE  RELATION  135 

BLESS  V.  JENKINS. 

(Supreme  Court  of  Missouri,  1S95.    129  Mo.  647,  31  S.  TV.  938.) 

Action  for  $2,700  and  interest  for  rent.  The  lease  was  in  writing 
and  under  seal,  signed  by  defendants  in  person  and  by  plaintiffs  by  , 
agent.  Defendants  paid  the  rent  for  six  months,  but  gave  timely  no-y^-y^,  .*, 
tice  in  writing  that  because  the  lease  was  not  signed  by  plaintiffs,  nor 
by  their  agents  duly  authorized  in  writing,  they  would  end  their  ten- 
ancy September  30.  Nine  months  before  the  expiration  of  that  time 
they  moved  out  and  sent  the  keys  to  plaintiffs,  who  refused  to  ac- 
cept them  and  each  month  demanded  the  rent.  Upon  the  defendants' 
refusal  to  pay,  this  suit  was  brought. 

/    Sherwood,  J.^-     [After  holding  that  performance  by  plaintiffs  took 
/  the  lease  out  of  the  statute  of  frauds ;]     *     *     *     (d)  But,  in  addi- 
/  tion  to  the  foregoing  reasons,  others  readily  occur  why  the  defense 
'   of  the  statute  of  frauds  must  prove  unavailing.     That  statute   does 
'    not  require  that  a  lease,  or,  indeed,  any  instrument,  should  be  under 
seal.    Admit,  then,  that  plaintiffs'  agents  had  no  authority  to  bind  them 
by  a  sealed  instrument,   still  the  unauthorized  and  unnecessary...seaL 
may  be  treated  as  superfluous  and  disregarded,  and  the  sealed  instru-^ 
liieht  deemed  an  unsealed  one,  and  may  be  ratified  as  a  simple  contract 
in  writing.    Mechem,  Ag.  §§  95,  141,  and  cases  cited.     And  that 
simple  contract  in  writing  made  without  authority  is  susceptible  oj 
oral  ratification,  no  one  questions. 
\       In  illustration  of  this  point  is  the  early  case  of  Maclean  v.  Di 
\  4  Bing.  722,  where  Lord  Chief  Justice  Best  said:   'Tt  has  been  argued 
\that  the  subsequent  adoption  of  the  contract  by  Dunn  will  not  take 
tiiis  case  out  of  the  operation  of  the  statute  of  frauds,  and  it  has  been 
insisted  that  the  agent  should  have  his  authority  at  the  time  the  con- 
tract is  entered  into.     If  such  had  been  the  intention  of  the  legisla- 
ture, it  would  have  been  expressed  more  clearly.     But  the  statute  only 
requires  some  note  or  memorandum  in  writing  to  be  signed  by  the 
party  to  be  charged,  or  his  agent  thereunto  lawfully  authorized,  leav- 
ing us  to  the  rules  of  common  law  as  to  the  mode  in  which  the  agent 
is  to  receive  his  authority.    Now,  in  all  other  cases  a  subscciuent  sanc- 
tion is  considered  the  same  thing  in  effect  as  assent  at  the  time, — 
'omnis   ratihabitio   retrotrahitur,  et  mandato   aequiparatur' ;    and.   in 
my  opinion,  the  subsccjuent  sanction  of  a  contract,  signed  by  an  agent, 
takes  it  out  of  the  operation  of  the  statute  more  satisfactorily  than 
an  authority  given  beforehand.    Where  the  authority  is  given  before- 
hand, the  party  must  trust  to  his  agent.    If  it  be  given  subsc(iucntly  to 
the  contract,  the  party  knows  that  all  has  been  done  according  to  his 
wishes." 

"2  Part  of  Iho  ojiliiion  Is  onilttod. 


I'U)  Tin:  KKi.ATioN  (Parti 

(c)  There  arc  autliorilics,  also,  which  hold  that  one  partner  may 
ratify  by  parol  an  act  under  seal  done  by  his  copartner.  Gwinn  v. 
Kookcr,  24  Mo.  290;  3  Kent.  Comni.  (loth  Ed.)  49;  Story,  Partn. 
§  117. 

(f)  The  doctrine  has  in  some  instances  been  extended  beyond  the 
limit  here  mentioned,  so  as  to  embrace  cases  where  one  person  not 
sustaining  the  relation  of  partner  to  another  may  execute  an  instru- 
ment under  seal,  and  the  same  may  be  ratified  by  matter  in  pais  with 
like  elYect  as  were  they  partners.  This  is  the  rule  announced  in  Mas- 
sachusetts. Holbrook  v.  Chamberlin,  116  Mass.  155,  17  Au:  Rep. 
146.  and  cases  cited."^ 

(g)  In  Worrall  v.  Munn,  5  N.  Y.  229,  55  Am.  Dec.  330,  after  an 
elaborate  review  of  the  authorities,  it  is  there  said :  "These  authori- 
ties show  that  there  is  no  distinction  between  partners  and  other  per- 
sons in  the  application  of  the  modern  rule  that  wherever  an  instru- 
ment would  be  effectual  without  a  seal  it  would  be  valid  and  binding 
on  the  principal,  although  executed  under  seal  by  an  agent  without 
authority  by  deed,  if  authorized  by  a  previous  parol  authority,  or  sub- 
sequently ratified  or  adopted  by  parol."  5  N.  Y.  loc.  cit.  243,  5  Am. 
Dec.  330,  and  cases  cited.  See,  also.  Hunter  v.  Parker,  7  Mees.  &  W. 
322;  State  v.  Spartanburg  &  U.  R.  Co.,  8  S.  C.  129;  Hammond  v. 
Hannin,  21  Mich.  374,  4  Am.  Rep.  490;  Adams  v.  Power,  52  Miss. 
828;   State  v.  Shaw,  28  Iowa,  67. 

As  the  result  of  these  authorities,  it  should  be  held  that  the  act  of 
plaintiffs  in  putting  defendants  into  possession  of  the  premises,  which 
they  did  on  April  1,  1891,  and  the  acceptance  by  them  of  rent  for  sev- 
eral months  thereafter  from  defendants  in  conformity  to  the  written 
lease,  was  an  ample  ratification  of  that  instrument. 

(h)  Besides,  the  old  lease  having  expired  by  its  own  terms  on  April 
1,  1891,  defendants  were  put  into  possession  under  and  by  virtue  of 
the  new  lease,  and  enjoyed  all  the  advantages  they  could  have  received 
had  the  new  lease  been  formally  valid  in  every  particular.  It  does  not 
lie  in  their  mouths  to  denounce  as  invalid  a  lease  under  and  by  virtue 
of  which  those  advantages  were  obtained.  Holbrook  v.  Chamberlin, 
116  Mass.  loc.  cit.  161 ;  State  v.  Shaw,  28  Iowa,  loc.  cit.  75.     *     *     * 

Judgment  for  plaintiff  affirmed. 

8  3  See,  also,  Adams  v.  Power,  52  Miss.  828  a876),  and  Holbrook  v.  Chamber- 
lin, 116  Mass.  l.>5.  17  Am.  Rep.  14G  (1874),  in  which  the  court  held  it  to  be 
the  settled  doctrine  in  Massachusetts  that  the  unauthorized  execution  of  a 
deed  by  an  agent  may  be  ratified  by  parol.  Compare  Reese  v.  Medlock,  27 
Tex.  120,  84  Am.  Dec.  611  (1863). 


K-T^^ 


/ 


Ch.  4)      /       CREATION  OF  THE  RELATION  137 

(D)  Implied  Ratification 
(a)  In  General 

,  RALPHS  V.  HENSLER. 

(Siipreme  Court  of  California,  1893.    97  Cal.  296,  32  Pac.  243.) 

Action  to  foreclose  a  mortgage  on  defendant's  property,  given  to 
secure  three  promissory  notes,  executed  for  defendant  by  her  attorney 
in  fact,  James  P.  McCarthy,  to  plaintiff's  testator,  Kimball  Hardy. 
Defendant  denied  that  McCarthy's  power  of  attorney  authorized  him 
to  make /he  notes  or  mortgage,  and  for  a  further  defense  set  up  that 
he  had, /as  her  agent,  paid  the  interest  and  secured  an  extension  of 
the  notds.  "T^sHbw  this  a  writing  purporting^^o  be  signed  by  Hardy 
was  intrpduced.     Judgment  for  plaintiff. 

Vanclief,  C.^*  [After  stating  the  facts:]  *  *  *  There  was 
no  evidence  tending  to  disprove  the  genuineness  of  this  writing,  or 
the  signature  of  Hardy;  but  the  testimony  of  McCarthy  that  the 
interest  had  been  paid  was  disputed  by  the  testimony  of  the  plaintiff.  y 

But  for  the  purpose  of  the  question  now  being  considered  (that  of  rat-  -^ / 

ification)  it  is  immaterial  whether  the  defendant  paid  the  interest  or 
not,  for,  whether  she  complied  with  the  conditions  upon  which  Hardy 
agreed  to  extend  the  time  of  payment  or  not,  her  averment,  in  her 
answer,  that  she  authorized  the  procurement  of  the  agreement  for 
th  extension  of  time,  in  the  absence  of  evidence  that  she  ever  repudi- 
ated the  execution  of  the  notes  or  mortgage  by  her  assumed  agent,  is 
prima  facie  sufficient  evidence  of  her  ratification  of  such  execution. 
In  Taylor  v.  Association,  68  Ala.  229,  Brickell,  C.  J.,  said :  "We  do 
not  mean  that  it  was  shown  that  there  was  assent  to  and  confirmation 
of  the  transaction  expressed  in  words.  That  is  not  essential,  for  rat- 
ification is  more  often  implied  from  the  acts  and  conduct  of  parties 
having  an  election  to  avoid  or  confirm  than  expressed  in  words ;  and 
it  is  implied  whenever  the  acts  and  conduct  of  the  principal,  having 
full  knowledge  of  the  fact,  are  inconsistent  with  any  other  supposi- 
tion than  that  of  previous  authority,  or  an  intention  to  abide  by  the 
ac^liough  it  was  unauthorized."  See,  also,  Mechem,  Ag.  §§  146-157. 
think  the  power  of  attorney  was  admissible  as  a  grcumstance  tcnd- 
irt  at  least  to  strengthen  the  other  evidence  of  a  ratification,  by  show- 
ing the  relation  between  defendant  and  McCarthy.)  It  showed  that 
McCarthy  was  not  a  stranger  to  defendant;    that  l/c  was  authorized  / 

to  act  as  her  attorney  to  some  extent  in  regard  t^all  her  real  pr(5p-  / 

erty  in  this'^^Ute,  even  though  he  may  not  have  been  authorized  to  / 

mortgage  it.]/" All  the  authorities,"  says  Mr.  Mechem  (section   160).  ' 

"agree  thatyme  relations  of  the  parties  have  much  to  do  in  determin- 
ing whether  or  not  there  has  been  a  ratification."  /Where  an  autlior- 

/ 

fl«  P.nrt  of  tlio  ojtinion  is  nmlttod. 


^^c^ 


I'^S  Tiiic  rvKi,.\Ti(iN  (Parti 

i/.cd  aj^^ont  transcends  his  autliority.  the  HahiHty  of  the  i)rinci[)al  to  be 
hoKl  to  have  ratified  tlic  unauthorized  acts  by  mere  acquiescence  is 
much  greater  than  it  would  he  in  case  an  utter  stranger  had  assumed 
lo  act  as  agent  without  any  authority  for  any  purpose  whatever ;  be- 
cause, "in  general,  where  an  agent  is  authorized  to  do  an  act,  and  he 
transcends  his  authority,  it  is  the  duty  of  the  principal  to  repudiate 
the  act  as  soon  as  he  is  fully  informed  of  what  has  been  thus  done 
in  his  naiue.  *  *  ♦  ei^^j.  \•^Q  y^\\\  j^t.  bound  by  the  act  as  having 
ratified  it  by  implication."  Ward  v.  Williams,  26  111.  447,  79  Am. 
Dec.  385. 

But  where  an  utter  stranger  assumes  to  act  as  agent,  without  any 
authority  for  any  purpose,  the  assumed  principal  is  not  required  to 
repudiate  so  promptly,  in  order  to  repel  the  charge  of  having  ratified 
the  unauthorized  acts  by  acquiescence ;  since  in  the  latter  case  the 
assumed  agent  bears  no  ostensible  relation  as  agent  to  the  person  for 
whom  he  assumes  to  act,  and  therefore  third  persons  are  not  so  liable 
to  be  deceived  by  liis  pretensions,  it  being  their  own  fault  if  they  deal 
with  him  as  agent  without  some  apparent  evidence  of  his  authority. 
And  since  the  undisputed  evidence  made  a  prima  facie  case  of  ratifi- 
cation, the  finding  that  the  notes  and  mortgage  were  executed  by  de- 
fendant was  thereby  justified,  the  ratification  being  equivalent  to  orig- 
inal authority.     *     *     * 


Judgment  and  order  reversed.*^ 


^r^^ijiAx\ 


HARTLOVE  v.  W^M.  FAIT  CO. 

(Court  of  Appeals  of  Maryland,  1F9!).    S9  Md.  254,  43  Atl.  G2.) 

Roberts,  J.  This  case  was  tried  in  the  court  below  before  the  judge 
at  large,  sitting  in  the  superior  court  of  Baltimore  city,  without  the  in- 
tervention of  a  jury.  The  verdict  and  judgment  being  against  the  ap- 
pellant, he  has  accordingly  appealed.  The  facts  are  briefly  as  follows : 
The  respective  parties  to  this  cause  are  both  dealers  in  the  canning 
and  sale  of  tomatoes.  The  appellant  authorized  James  Kean,  a  mem- 
ber of  the  firm  of  James  Kean  &  Co.,  brokers  in  canned  goods,  to  sell 
for  him  2,000  cases  of  standard  three-pound  tomatoes;  and  on  the 
25th  of  March,  1897,  he  did,  through  the  instrumentality  of  said  agent, 
sell  said  tomatoes  to  the  appellee,  at  55  cents  per  dozen,  or  $1.10  per 
case,  "net  cash  in  ten  days,"  September  delivery,  of  the  pack  of  1897, 
with  an  allowance  for  labels  of  about  one  dollar  per  thousand,  in  plain 
cases,  and  to  be  delivered  at  the  appellee's  wharf  in  the  month  of  Sep- 
tember, 1897. 

On  this  state  of  facts,  it  is  contended  on  the  part  of  the  appellant 
that  there  is  no  evidence  in  the  record  legally  sufficient  to  establish  the 

«5See,  also,  Ballard  v.  Nye,  138  Cal.  58S,  mO,  72  Tac.  15(5  (1903);  Lee  v. 
Fontaine.  10  Ala.  755,  770,  44  Am.  Dec.  50.=3  (1S4G),  qnotinf,'  Story  on  Agency, 
-2.  S3.  234  to  2.j3:    Kraft  v.  Wilson,  104  Cal.  xvii,  37  I'ac.  700  (1894). 


Ch.  4)  CREATION  OF  THE  RELATION  139 

contract  sued  on,  which  is  admitted  by  the  appellant  to  be  the  only 
question  before  the  court  upon  this  appeal,  and  is  substantially  the 
language  of  the  appellant's  third  prayer,  which  was  rejected  by  the 
court  below.  The  evidence  in  the  record  shows  plainly  the  acceptance 
of  the  bought  note,  and  the  only  objections  made  to  it  by  the  appellant 
were  his  strictures  upon  the  terms  of  payment  made  to  Mr.  Kean,  his 
broker.  There  never  was,  until  after  the  bringing  of  this  suit,  the 
slightest  attempt  by  the  appellant  to  repudiate  the  contract,  either  with 
the  said  broker  for  the  appellee,  or  directly  with  the  appellee  itself. 
The  price  of  canned  tomatoes  advanced  rapidly  in  the  early  fall  of 
1897.  On  the  23d  of  September,  1897,  the  appellee  wrote  the  appel- 
lant asking  him  to  hasten  the  delivery  of  the  tomatoes  sold  by  Kean  & 
Co.  The  appellant  made  no  reply  to  this  communication.  And  on  Oc- 
tober 18,  1897,  the  appellee  again  wrote  him  that  he  had  failed  to  ful- 
fill his  contract  as  stipulated,  and  that  suit  would  be  brought  against 
him  if  he  did  not  deliver  the  goods  as  agreed  upon  by  him.  He  then 
called  on  the  appellee,  and  informed  its  president  that  he  could  not  de- 
liver the  goods,  because  his  factory  had  burned  down,  and  the  farmers 
had  failed  to  meet  their  contracts  with  him,  and  that  it  would  be  use- 
less to  sue  him,  and  no  judgment  could  be  made  out  of  him.  Kean, 
his  broker,  testified  to  several  conversations  with  the  appellant  in  which 
he  made  substantially  the  same  statements  as  he  had  made  to  the  ap- 
pellee company.  This  action  was  then  brought  below,  and  for  the 
first  time  the  appellant  set  up  the  defense  that  he  had  never  author- 
ized the  sale  of  the  goods,  and  had  never  ratified  Kean's  action  in  mak- 
ing such  sale ;  but  the  proof  fails  to  sustain  this  contention.  It  is  ad- 
mitted on  behalf  of  the  respective  parties  to  this  appeal  that  the  only 
question  here  to  be  considered  and  determined  is  whether  there  is  any 
evidence  in  the  .record  legally  sufficient  to  show  "that  the  appellant  ever 
ratified  the  written  contract,  and  agreed  to  deliver  the  goods  therein 
mentioned  to  the  appellee,  net  cash  in  ten  days."  It  is  in  point  of  fact 
the  sole  question  in  the  case.  No  exception  as  to  the  admissibility  of 
the  proof  ofifered  has  been  reserved,  and  the  only  contention  arises  on 
the  refusal  of  the  court  to  grant  the  third  prayer  of  the  appellant, 
which  is,  in  effect,  a  demurrer  to  the  evidence.  The  appellant's  spe- 
cial exception  to  the  appellee's  first  prayer,  which  was  intended 
to  raise  substantially  the  same  question  which  was  presented  by  the 
appellant's  third  prayer,  was  overruled  by  the  court. 

It  will  be  appropriate  here  to  state  the  views  of  the  learned  judge 
who  presided  below,  and  has  in  plain  terms  correctly  expressed  the  law 
of  the  case.  In  passing  upon  the  motion  made  by  the  defendant  for  a 
new  trial,  Judge  Dennis  said:  "When  the  case  was  first  heard,  I  took 
a  view  (a  view  the  correctness  of  which  a  fresh  examination  of  the 
stcnograi)her's  notes  of  the  testimony  has  confirmed)  that  the  contract 
of  sale  negotiated  through  Capt.  Kean,  as  agent  of  the  defendant,  and 
the  plaintiff  was  complete.  It  is  true  that,  when  Kean  presented  to 
the  defendant  the  'sold  note,'  the  latter  objected  to  the  item  of  ten  days 


I  10  TIIK    KKLATION  (Part  1 

of  pavniciit;  but  he  did  not  repudiate  tlic  contract  on  that  account,  but 
took  the  'sold  note'  and  kept  it,  which  he  certainly  would  not  have 
done  had  he  intended  to  repudiate  the  contract.  In  the  latter  event, 
he  would  have  refused  to  receive  the  note  at  all.  Certainly  nothing 
that  was  said  or  done  on  that  occasion,  or  afterwards,  ever  led  Kean 
to  believe  otherwise  than  that  the  transaction  was  completed,  and  he 
so  reported  to  the  plaintiff,  to  whom  he  gave  the  corresponding  'bought 
note.'  And  the  defendant's  subsequent  conduct  is  wholly  inconsistent 
with  his  present  contention ;  for  he  not  only  kept  the  'sold  note,'  but 
when,  several  months  afterwards  he  was  called  upon  by  the  plaintiff 
to  perform  the  contract,  he  never  repudiated  it  then ;  and  when,  short- 
ly afterwards,  he  was  threatened  with  suit  if  he  did  not  comply,  he 
defended  his  noncompliance  by  stating  that  he  had  suffered  losses  from 
fire  and  other  sources,  and  was  not  able  to  carry  out  the  contract, — 
thus  recognizing,  in  the  strongest  way,  the  validity  of  the  contract  the 
existence  of  which  he  now  disputes." 

The  rule  of  damages  properly  applicable  in  this  case  will  be  found 
embodied  in  the  appellee's  second  prayer,  which  was  granted  by  the 
court  below,  and  is  supported  by  McGrath  v.  Gegner,  17  Md.  338,  26 
Atl.  502,  39  Am.  St.  Rep.  415;  Pinckney  v.  Dambmann,  72  Md.  184, 
19  Atl.  450;   Brown  v.  Muller,  L.  R.  7  Exch.  319. 

As  to  the  question  of  ratification  of  the  acts  of  the  agent,  it  is  not 
necessary  that  there  should  be  any  positive  or  express  confirmation, 
and  for  this  purpose  the  conduct  of  the  principal  is  construed  liberally 
in  favor  of  the  agent.  Story,  Ag.  §§  253,  255,  256,  258.  Martin,  J., 
delivering  the  opinion  of  the  court  in  the  case  of  Pitts  v.  Shubert,  11 
La.  286,  30  Am.  Dec.  718,  says :  "No  principle  is  better  settled  than 
that  he  who  fs  notified  that  a  contract  has  been  made  for  him,  and 
subject  to  his  ratification,  by  a  person  who  pretended  to  have  authority 
for  that  purpose,  is  presumed  to  ratify  it,  unless,  immediately  on  be- 
ing informed  thereof,  he  repudiates  it."  Hatch  v.  Taylor,  10  N.  H. 
538;  Benj.  Sales,  §  882. 

From  a  careful  examination  of  the  ruling  of  the  court  below,  we 
have  failed  to  discover  any  error.  It  follows  from  what  we  have  said 
that  the  judgment  must  be  affirmed.  Judgment  affirmed,  with  costs  to 
the  appellee. 


SANDERS  V.  PECK. 

(Circuit  Court  of  Appeals  of  the  United  States,  Seventh  Circuit,  1898.    30  C. 
C.  A.  530,  87  Fed.  61.) 

Woods,  Circuit  Judge."®  The  bill  in  this  case  was  brought  by 
Joshua  C.  Sanders,  the  appellant,  against  Ferdinand  W.  Peck,  Wil- 
liam R.  Page,  Harvey  W.  Booth,  and  David  T.  Corbin,  to  set  aside 
a  sale  of  22  bonds,  of  $1,000  each,  executed  by  the  Riverside  Improve- 

66  Part  of  the  opinion  is  omitted. 


p 


Ch.  4)  CREATION    OF    THE    RELATION  /?A/141  ,  ^^ 

ment  Company.    The  sale  was  made  on  September  10,  1890,  by  Cor-  •  ^    ^i^-ti^iidJy^ 

bin,  as  agent  of  the  owners,  to  Peck,  who  was  represented  in  the  trans-  "  f  r  "/- 
action  by  Page  and  Booth,  and  the  bill  charges  a  conspiracy  of  the  de- 
fendants to  cheat  and  defraud  Sanders  out  of  his  interest  in  the  bonds, 
and  in  certain  decrees  in  which  the  bonds,  excepting  two,  had  been 
merged.  The  appellees  answered,  denying  all  fraud,  averring  a  pur- 
chase in  good  faith  through  Corbin,  who,  as  agent  and  attorney  of  the 
owners  of  the  bonds,  it  is  alleged,  had  full  authority  to  make  the  sale, 
and  setting  up  certain  orders  and  decrees  of  the  circuit  court  of  Cook 
county.  111.,  in  the  case  of  Peck  against  Chicago  &  Great  Western  Rail- 
road Land  Company  and  others,  as  an  adjudication  of  Peck's  title  as 
against  the  title  asserted  by  Sanders. 

It  is  not  found  necessary  to  rehearse  the  numerous  facts  incident  to 
this  litigation.  A  few  propositions  are  controlling.  That  Corbin  had 
no  authority  to  sell  the  two  bonds  which  had  belonged  to  Hendrickson 
is  clear,  and  the  preponderance  of  the  evidence  seems  to  us  to  be  that 
the  sale  made  of  the  other  bonds  was  unauthorized,  and  that,  having 
been  notified  of  the  appellant's  ownership  and  of  his  denial  of  Corbin's 
authority  before  the  purchase  money  was  paid.  Peck  and  his  agents 
proceeded  at  their  peril  in  an  effort  to  consummate  the  sale  by  paying 
the  price  to  Corbin  and  by  taking  assignments  of  the  decrees,  which, 
though  obtained  in  the  names  of  Ver  Xooy  and  Temple,  belonged  to 
the  appellant.  jBut,  though  unauthorized,  we  are  of  opinion  that  San- 
ders ratified  th^sale  by  his  subsequent  conduct,  when,  with  full  knowl- 
edge of  the  circumstances,  he  entered  into  negotiations  with  Corbin 
for  a  settlement  of  the  account  between  them  on  the  basis  that  the  sale 
was  valid,  and  that  Corbin  was Vccountable  to  him  for  the  price  re- 
ceived for  the  bonds  or  decrees,  i  In  that  negotiation,  which  was  en- 
tered upon  without  any  reservation  of  a  right  to  repudiate  the  sale  if 
a  settlement  should  not  be  effected,  a  sum  was  agreed  upon  as  proper 
compensation  to  Corbin  for  making  the  sale,  and  the  difference  be- 
tween them  which  prevented  an  adjustment  was  in  respect  to  a  matter 
in  no  way  connected  with  the  sale  of  the  bonds.  This  unreserved  as- 
sertion of  ownership/of  the  proceeds  amounted  to  recognition  of  the 
validity  of  the  sale.  I A  ratification  once  fairly  made,  it  was  not  revo- 
cable. If  it  be  said\hat  this  ratification  did  not  extend  to  the  Ilen- 
drickson  bonds,  of  which  Sanders  was  not  then  the  owner,  he  is  nev- 
ertheless in  no  better  position,  in  respect  of  those  bonds,  because  of 
his  failure  for  more  than  a  year  after  acquiring  Hcndrickson's  title  to 
question  the  sale.     *     *     * 

The  decree  below  is  affirmed. 


'\ 


^^ 


1 


/ 


V 


142  Tin:  KKLATioN  (Parti 

DANATii'iv  V.  r.AKr.ocrc. 

(Supreme  Court  of  Michiwin,  ISTO.     Sli  JNIicli.  20.".) 

Daiialicr  had  a  contract  for  railway  construction,  and  sublet  a  part 
of  the  work  to  I'ohy  &  Dye.  Oarlock  sues  for  the  board  of  laborers, 
contracted  for  by  Fohy  cS:  Dye.  The  evidence  showed  payment  by 
Danaher's  agent  of  a  previous  board  bill  upon  their  order. 

Putt  Cuiu.\M.  We  think  there  is  no  material  distinction  between 
this  case  and  Wells  v.  Martin,  32  Mich.  478,"^  as  to  the  proof  intro- 
duced to  show  liability. 

We  discover  no  evidence  in  the  record  tending  to  show  an  original 
undertaking  by  Danaher,  or  any  act  of  ratification,  of  any  arrange- 
ment which  Fahy  &  Dye  may  have  made,  and  the  bill  of  exceptions 
states  that  the  substance  of  all  the  testimony  given  is  set  out ;  and  the 
judge,  after  referring  in  his  charge  to  the  evidence  supposed  to  bear 
on  the  point,  stated  that  it  was  substantially  the  testimony  produced 
by  botli  parties. 

The  judgment  should  be  set  aside,  with  costs,  and  a  new  trial  or- 
dered. 


TEBBETTS  v.  MOORE. 

(Supreme  Court  of  Judicature  of  New  Hampshire,  1849.     19  N.  H.  369.) 

Assumpsit  for  goods  sold  and  delivered.    Verdict  for  defendant. 

Woods,  J.  No  objection  is  made  that  the  auditor's  report  was  per- 
mitted to  be  read  to  the  jury,  in  the  form  in  which  it  was  ofifered.  We 
can  therefore  take  no  other  view  of  it  than  as  containing  a  statement 
of  facts  properly  laid  before  the  jury.  It  finds  that  the  articles  in 
question  were  ordered  by  the  sons  of  the  defendant,  in  his  name,  and 
by  the  plaintiffs  delivered  to  the  sons  and  charged  to  the  father.  That 
on  former  occasions  articles  had  in  like  manner  been  delivered  by  the 
plaintiffs  to  the  same  individuals,  and  the  defendant  had  paid  for 
them,  without  objection,  but  without  knowing  that  articles  so  ordered 
and  delivered  were  included  in  the  account. 

/V     «7  Tn  Wells  v.  Martin,  32  Mich.  478  (1875),  cited  above,  the  court  held  that 

/     f    proof  that  defendants'  paymaster  had  paid  a  portion  of  a  previous  bill  on  the 

j     order  of  a  subcontractor,  and  had  said  they  intended  to  pay  the  bill  in  suit, 

I    is  no  evidence  of  a  ratification  by  his  principal  of  authority  in  the  person  who 

Jffcurred  the  debt.  n 

f    But  a  mere  effort  on  the  part  of  the  principal,  after  knowledge  of  the  un- 

(  authorized  act  of  the  agent,  to  avoid  loss  ther^)y,  will  not  amount  to  ratifica- 

vtion,  .<5o  as  to  relieve  the  agent  from  liability^  Triggs  v.  Jones,  4G  Minn.  277, 

4S  N.  W.  lll.'i  (ISOI),  post,  p.  l'.)0;    Oglesby  "iKT  Smith,  38  Mo.  App.  07  (1SS9). 

Nor  is  an  abortive  attempt  to  settle  with  one's  agent,  who  has  surrepti- 
tiously sold  one's  property,  a  ratification  of  the  sale,  so  as  to  preclude  any 
remedy  against  the  purchaser.  Gilman  Linseed  Oil  Co.  v.  Norton,  89  Iowa, 
434.  ~ih  N.  W.  003.  48  Am.  St.  Kep.  400  (ISO.'}).  See,  also,  Humphrey  v.  Havens, 
12  Minn.  298  (Gil.  190)  (1807»  in  which  the  principal  had  ratified  a  previous 
act  of  the  agent  of  an  entirely  different  character. 


^y^j/Mjty^ 


/ 


Ch.  4)  CREATION    OF    THE    RELATION  ,  143 

/ 
/ 

Two  clear  propositions  may  be  stated  upon  these  facts : '.  First,  the 
relation  in  which  sons  stand  to  a  father  involves  no'',  authority  on  their 
part  to  contract  debts  in  his  name  and  in  his  behalf.  /They  cannot  bind  ..^    '     "'X 

him  by  their  acts,  without  authority  emanating  from  his  own  will  to    /  /\^~^ 
do  so,  any  more  than  mere  strangers  can|  1  In  the  case  of  things  nec- 
essary for  their  suppost,  the  relation  of'a  father  to  his  sons  may  be 
shown  in  aid  of  other  proof  of  the  authority  of  the  latter;   but  such 
is  not  the  present  case.    I 

The/second  proposition  is  that  the  ground  upon  which  the  law  raises 
a  presumption  of  authority  in  an  agent  from  a  course  of^previous  ^ 
acts,"?  is  that  those  acts  have  been  done  with  the  consent  or  acquies- 
cence Vf  the  principal,  and,  of  course,  with  his  knowledge.  For  to 
say  that  one  has  assented  to  an  act,  without  knowing  that  it  has  been 
performed,  is  an  absurdity  in  terms.  Perhaps  the  facts  which  are 
commonly  received  and  are  legally  admitted  as  evidence  of  this  knowl- 
edge may  sometimes  exist  consistently  with  a  want  of  it.  And  such  is 
the  nature  of  evidence  in  general/  But  proof  that  the  supposed  prin- 
cipal kiWw  of  the  acts  shown  in  Widence  of  the  agency  is  always  re- 
quired. \  \ 
/ Anion?  the  strongest  acts  of  ratification  is  payment.)  It  is  evidence 
that  the'party  knew  and  approved  of  the  act  so  ratified.  But  it  is  evi- 
cAsnce  which  may  be  rebutted,  and  is  rebutted  in  the  present  case,  by 
proof  which  satisfied  the  mind  of  the  auditor,  and,  as  was  suggested  ^ 
in  the  outset,  must  satisfy  us.  The  judge  therefore  correctly  in-  j  '  ^ 
structed  the  jury  that  no  inference  could  legally  be  made  from  the 
payments  made  by  the  defendant  for  articles  ordered  by  his  sons  and 
delivered  to  them  by  the  plaintiffs,  such  payment  having  been  made 
without  any  knowledge  on  the  defendant's  part  that  he  was  paying  foj 
such  things  ;   and  there  must  be 

Judgment  on  the  verdict. 


•   WOODS  V.  FRANCKLYN. 

(Common   Ploas  of  New  York  City  and  County,  1892.     19  N.   Y.   Supp.  377. 
40  N.  Y.  St.  lU'P.  300.) 

Action  by  Woods  to  recover  for  work,  labor,  and  services  performed 
by  request  of  defendants'  alleged  agent.  Appeal  from  judgment  for 
jjlaintiff.  / 

BisciioFr,  J./ The  decisive  question  in  this  case  is  whether  i)laintilT 
has  cstablishedl  by  competent  evidence,  authority  on  the  part  of  Still- 


[«»  .\  pfiwcr  of  uttoi-ix'v  t<»  do  fntnrc  jnfs  does  not 
oLaots  alivady  (lyiic.     I'.ritt  v.  (iordon.  \v:i  I<(wa.  431 


anioniit  to  a  ratiliciitiou 
!1.  lOS  .\.  W.  . ■!!'.).  11  Ann. 
Cns.  407  (I'.KH;).  rEs|nj<ii^lly  If  the  i»()\v«'r  Is  conditioned  upon  ci'itain  events 
wldch  do  not  trkuspiic. .'  Ticonir-  Water  I'ower  &  ,Mf>,'.  <'o.  v.  Lanu.  «i3  Me. 
4S0  (1S74);  I'.ell  V.  ( ■u<ndn;,'liani.  .".  Pet.  C,'),  7  L.  Ed.  000  (1S30) ;  HniNMi  v. 
Foster.  1.37  Ml<h.  35,  KM^I   N.   W.  I<i7  (lliol). 


144  TiiK  KKLATioN  (Parti 

man  to  bind  tlcfondant  as  liis  principal.  Tn  considering  this  question, 
evidence  of  StillnuuTs  tlcclaralions  tcndini;-  to  sliow  his  authority  to  act 
for  defendant  should  be  eliminated,  because  it  is  admissible  for  no 
such  purpose,  but  only  for  the  purpose  of  showing  credit  was  intended 
to  be  given  to  the  defendant.  Stringhani  v.  Insurance  Co.,  4  Abb. 
Dec.  315;  Marvin  v.  Wilber,  52  N.^Y.  270;  People's  Bank  v.  St. 
Aiuhony's  R.  C.  Church,  109  N.  Y.  512,  17  N.  E.  408. 

Outside  such  declarations  the  validity  of  the  judgment  depends  upon 
facts  substantially  as  follows  :  Plaintiff  performed  certain  work,  labor, 
and  services  in  repairing  the  buildings  873  and  879  Broadway  and  17 
East  Eighteenth  street,  which  were  owned  by  Sir  Bache  Cunard,  upon 
Stillman's  request  and  representation  that  he  was  authorized  by  de- 
fendant to  employ  plaintiff  for  such  purpose.  Of  these  premises  Still- 
man  had  assumed  full  management  and  control  at  the  request  of  the 
defendant;  but  the  defendant,  in  making  such  request,  acted  for  and 
as  the  agent  of  Cunard,  the  owner.  Stillman  did  whatever  he  thought 
necessary  for  the  preservation  of  the  premises,  caused  repairs  to  be 
made,  collected  rents,  paid  expenses,  and  remitted  the  balance  to  de- 
fendant for  the  owner's,  Cunard's,  account.  Prior  to  plaintiff's  last 
employment  and  the  accruing  of  the  claim  in  suit  he  had  performed 
similar  services  under  precisely  the  same  circumstances,  for  which,  at 
Stillman's  direction,  he  on  one  occasion  rendered  a  bill  to  defendant, 
which  was  paid  when  presented. 

It  cannot  be  said  that  the  facts  recited  would  support  an  inference 
of  Stillman's  authority  to  bind  defendant,  construed  most  favorably  to 
plaintiff,  despite  Stillman's  apparent  equivocation  as  a  witness  for  him. 
It  is  obvious,  though  Stillman  entered  upon  the  agency  of  Cunard's 
buildings  at  defendant's  request,  that  he  was  Cunard's,  and  not  defend- 
ant's agent.  The  fact  that  defendant  was  the  depositary  of  the  rents 
accruing  to  Cunard  from  the  buildings  no  more  had  the  effect  of  sub- 
stituting defendant  for  Cunard  as  principal  than  would  an  agent's  de- 
posit in  any  case  of  his  principal's  funds  with  a  banker  for  transmis- 
sion create  the  relation  of  principal  and  agent  so  as  to  charge  the 
banker  with  liability  for  the  acts  of  the  depositor.  It  is  true  that  au- 
thority to  do  a  particular  act  may  be  inferred  by  a  course  of  dealing 
between  an  alleged  principal  and  his  assumed  agent,  as  in  a  case  where 
a  principal  has  repeatedly  recognized  and  approved  of  *-"milar  acts, 
rBank  v.  Putnam,  1  Abb.  Dec.  80;  Wood  v.  Railroad  Co.,  8  N.  Y. 
160;  Hammond  v.  Varian,  54  N.  Y.  398;  Olcott  v.  Railroad  Co.^  27 
N.  Y.  546,  84  Am.  Dec.  298;  Bank  v.  Clements,  31  N.  Y.  33;)  but 
we  are  unable  to  find  any  sanction  in  principle  or  authority  for  holding 
that  the  ratification  of  a  single  act  would  justify  an  inference  that  any 
further  similar  act  would  likewise  meet  with  recognition,  or  that  the 
assumed  agent  is  thus  empowered  to  subject  the  alleged  principal  to 
liability  upon  subsequent  unauthorized  contracts.  Eor  this  reason  we 
must  regard  defendant's  payment  of  plaintiff's  bill  for  services  on  a 
former  occasion  insufficient  to  justify  the  inference  that  Stillman  had 


Ch.  4)  CREATION  OF  THE  RELATION  145 

authority  from  defendant  to  employ  plaintiff  as  his  agent.®^  The  facts 
therefore  did  not  authorize  plaintiff's  recovery,  and  the  motion  to  dis- 
miss his  complaint  should  have  been  granted. 

Judgment  reversed,  and  a  new  trial  granted,  with  costs  to  appellant 
to  abide  the  event. 


WADE  v.  WOLFSON. 

(Supreme  Court  of  New  York,  Appellate  Term,  1904.     90  N.  T.  Supp.  1078.) 

Action  for  goods  sold  and  delivered.    From  judgment  for  defendant, 
plaintiff  appeals. 

Per  Curiam.  The  defendant's  wife  had  no  apparent  authority  -^^^ 
to  bind  him  to  the  purchase  of  stock  for  his  perfumery  business,  and, 
crediting  his  testimony,  there  was  no  ground  for  holding  him  to  a 
ratification,  his  acts  in  relation  to  the  goods  bemg  in  no  way  incon- 
sistent with  tKe  actual  oral  agreement  made  by  him  with  the  salesman, 
-whereby  he  (defendant)  was  to  sell  the  goods  on  commission.  That 
this  was  the  agreement,  the  justice  has  found  upon  a  simple  conflict 
of  evidence,  and  there  is  nothing  improbable  in  the  defendant's  asser- 
tion that  he  knew  of  no  other. 

Judgment  affirmed,  with  costs. ''° 


/ 


(b)  Accepting  Benefits 


V'     ^ 


HANEY  SCHOOL  FURNITURE  CO.  v.  HIGHTOWER 
BAPTIST  INSTITUTE. 

(Supreme  Court  of  Georgia,  1901.     113  Ga.  289,  38  S.  E.  7G1.) 

Action  on  an  open  account  for  thirty  school  desks,  a  reading  chart, 
and  some  blackboards.  Defendant  was  a  corporation,  created  to  carry 
on  a  school,  and  was  managed  by  a  board  of  trustees.  This  board 
hired  one  Booth  as  principal  of  the  school,  and  he  had  bought  the 
supplies  sued  for.    Judgment  for  defendant. 

Little,  J.      [After  stating  the   facts  and  ruling  on  a  motion   by 

«»That  a  railway  company  had  paid  a  physician,  hired  by  a  conductor,  to 
attend  a  person  injured  liy  his  train,  docs  not  show  a  ratification  of  such  un- 
authorized enii>loynient,  so  as  to  l>ind  the  company  for  a  suhsfMjuent  unau- 
thorized employment  of  the  i)hyslclau  for  another  person  injured.  Wills  v. 
Int.  &  G.  N.  H.  Co.,  41  Tex.  Civ.  App.  r,s,  ri'J  S.  \V.  L'T.'S  (liiocj.  Hut  a  single 
act  of  an  rgcnt  and  a  reco^nKlon  of  it  by  the  principal  may  he  so  unc(piivocal 
and  or  so  iK>sltlv('  and  roniprchcnsivo  a  rharactcr  as  to  place  the  aulimrity  of 
tlie  at'cMt  to  d<i  siniiliir  acts  for  the  iirinci]);il  beyond  any  (luestion.  The  v.-iliie 
of  snch  jtroof  does  not  depend  so  much  upon  the  number  of  acts  as  ui»on  their 
chiinicter.  If  the  evidence  is  doubtful.  It  Is  a  question  for  the  jury.  Wlbox 
V.  C.  M.  &  St.  r.  R.  Co.,  21  Minn.  2(;9  (1S77). 

TO  Accord:     Hromb-v  v.  Adnv.  70  Ark.  .T.l,  CH  S.  W.  32  (1902);    White  Sew- 
ing Miich.  Co.  V.  Hill  &  Co.,  y.M  N.  C.  128,  -18  S.  E.  575  (1901). 
♦  loMD.I'it.iV:  .\.-   10 


146  Tin;  kki.ation  (Parti 

plaintitf  on  a  motion  to  anuMul  the  jK-tilion:]  *  *  *  2.  riaintilt' 
sought  to  have  the  verdict  sot  aside  on  the  ^roinul  tliat  it  was  contrary 
to  tlie  eviclenco,  and  without  cviilcnce  to  support  it.  It  is  our  o])inion 
that  under  tlie  evidence  the  plaintitY  was  entitled  to  have  a  verdict  in 
its  favor.  It  is  undeniably  true  that  the  board  of  trustees  were  un- 
willing to  have  a  debt  created  against  the  corporation  which  they  rep- 
resented, and  it  is  equally  true  that  they  did  not  authorize  iSooth  to 
create  the  debt  on  which  the  suit  was  brought.  It  cannot  be  gainsaid, 
however,  that  by  their  express  and  recorded  action  they  did  authorize 
Booth  to  purchase  certain  equipment  for  the  school,  although  in  doing 
so  they  limited  him  to  the  expenditure  of  the  amount  of  money  on 
hand ;  and  clearly,  as  an  original  proposition,  he  had  no  right  to  go  be- 
yond it.  nor  to  create  any  debt  at  all.  But  in  authorizing  Booth  to 
purchase  the  equipment  to  the  extent  of  the  funds  on  hand  they  con- 
stituted him  their  agent  that  far.  When  he  went  beyond  that  limit, 
he  exceeded  his  authority,  and  could  not  primarily  contract  a  debt 
which,  without  their  acquiescence,  would  be  binding  on  the  corpora- 
tion. It  is  a  clear  case  of  the  agent  exceeding  his  authority.  In  such 
a  case,  in  order  to  bind  the  principal,  it  must  appear  that  he  in  some 
way  ratified  the  unauthorized  act.  If  he  did,  he  is  liable;  if  he  did 
not,  he  is  in  no  way  liable  for  the  debt. 

Section  3019  of  the  Civil  Code  declares  that  a  ratification  by  the 
principal  relates  back  to  the  act  ratified,  and  takes  efifect  as  if  originally 
authorized.  A  ratification  may  be  express,  or  implied  from  the  acts 
or  silence  of  the  principal,  and  a  ratification  once  made  cannot  be  re- 
voked. We  accept  the  evidence  of  members  of  the  board  of  trustees 
who  were  sworn  in  this  case  as  true,  and  as  a  matter  of  fact  it  must 
be  conceded  that  when  the  board  ascertained  that  Booth  had  exceeded 
his  authority,  and  purchased  the  desks  and  other  equipment  of  the 
school  on  a  credit,  they  in  words  repudiated  that  action,  and  notified 
plaintiff  through  its  attorney  that  the  goods  bought  were  subject  to  its 
order.  Therefore  they  were  not  silent,  and  the  ratification  of  Booth's 
contract  cannot  be  declared  in  this  case  from  the  silence  of  the  prin- 
cipal. The  question,  then,  is  narrowed  to  the  inquiry  whether  the 
board  of  trustees  ratified  this  contract  of  Booth  by  their  acts.  It 
was  undoubtedly  originally  contemplated  that  the  schoolroom  should  be 
supplied  with  desks  and  other  equipment  according  to  the  means  in 
the  hands  of  the  trustees.  It  cannot  be  made  a  cause  of  difference  in 
the  determination  of  the  question  of  liability  that  Booth  took  the 
school  for  what  he  could  make  out  of  it  The  school  building  and  the 
equipment  which  it  contained  were  the  property  of  the  corporation, 
and  under  the  direct  control  of  the  trustees,  and  in  turning  over  the 
school  building  and  the  furniture  therein  to  Booth  the  trustees  of  the 
defendant  corporation  w'ere  but  carrying  out  the  object  of  the  incor- 
poration, which  was  to  maintain  a  school.  It  is  conclusively  shown 
that,  while  the  trustees  were  unwilling  to  better  equip  the  school  build- 
ing by  incurring  a  debt,  yet,  after  having  learned  that  the  desks,  etc., 


Ch.  4)  CREATION  OF  THE  RELATION  147 

wliich  were  placed  in  the  school  building  for  the  use  of  the  school 
which  they  were  appointed  to  maintain,  had  been  purchased  by  Booth 
on  credit,  they  allowed  such  desks  and  other  equipment  to  remain  in 
said  school  building,  and  be  used  by  the  president  and  scholars  from 
the  time  of  such  discovery  up  to  the  time  of  the  trial  of  the  case. 

The  trustees,  then,  are  placed  in  this  position :  They  did  not  author- 
ize Booth  to  purchase  this  furniture  on  credit.  As  soon  as  they  learned 
he  had  done  so,  they  notified  the  seller  that  Booth  had  no  authority  to 
contract  the  debt  for  them,  and  that  they  would  not  be  bound  thereby, 
and  disclaimed  title  to  the  property.  Had  they  stopped  here,  and 
caused  this  property  to  be  taken  from  their  building,  or  stored  it  un- 
used there  or  elsewhere,  their  claim  would  have  been  perfectly  sus- 
tained; but,  after  having  disclaimed  title,  the  fact  remains  that  they 
continued  to  use  it  for  a  year  or  more,  having  all  the  benefits  of  it, 
and,  notwithstanding  their  disclaimer,  kept  it  for  the  use  of  the  school. 
It  must  be  held  that  such  action  ratified  the  purchase  made  by  Booth. 
It  is  not  a  sufficient  answer  to  this  proposition  to  say  that  this  equip- 
ment is  being  used  by  Prof.  Callaway,  the  successor  of  Booth.  This  is 
so  for  the  reason  that  Callaway  was  put  there  by  the  trustees,  and  was 
furnished  the  school  building  and  the  furniture  belonging  to  it.  When 
Booth  left  the  building,  he  left  therein  this  equipment,  which  the  de- 
fendants claimed  belonged  to  the  plaintiflf.  Callaway  was  admitted  by 
their  action,  and  permitted  by  them  to  use  the  furniture  which  was  in 
their  building,  and  this,  having  been  bought  by  Booth  in  their  name, 
and  placed  in  their  building,  they  should,  in  some  manner,  have  ex- 
cepted such  furniture  from  Callaway's  control  in  carrying  on  the 
school  for  them.  They  could  not  permit  such  use  of  it  by  him  as  a 
part  of  the  furniture  of  their  school  building  without  working  a  rat- 
ification of  the  purchase  made  by  Booth.  And,  while  a  disclaimer  of 
title  and  notification  to  the  seller  that  the  trustees  of  the  school  build- 
mg  had  no  claim  to  this  furniture  which  was  being  used  therein  was 
made,  it  was  not,  alone,  such  a  sufficient  repudiation  as  would  free  the 
trustees  from  liability  if  they  continued  to  use  it  in  the  business  of 
their  corporation. 

In  the  case  of  Wright  v.  Methodist  Church,  71  Minn.  7*^,  74  X.  W. 
10K-»,  the  pastor  of  a  church  purchased  an  organ  for  the  use  of  the 
church,  and  claimed  that  it  was  purchased  by  its  authority.  This  was 
denied.  At  the  time  of  its  receipt  the  trustees  of  the  church  did  not 
know  that  it  had  been  purchased,  but  were  told  that  the  pastor  had 
ordered  it  for  a  particular  occasion.  After  ascertaining  the  fact  of 
the  purchase,  the  trustees  notified  the  ])laintiff  that  the  pastor  had 
no  authority  from  them  to  purchase  the  organ,  but  it  was  allowed 
to  remain  in  the  church,  and  was  continually  used  tlierein.  The 
supreme  court  of  Minnesota,  in  passing  on  these  facts,  ruled  that, 
if  the  pastor  was  not  originally  authorized  to  purchase  the  organ 
for  the  church,  under  the  facts  its  trustees  sul)se(|ueiitly  ratified  his 
acts.     The  general  rule  is  found  staterl  in   Mcchem.  Ag.  §    148.     The 


148  Tin:  iii'i.ATioN  (Parti 

author  precedes  a  stalenient  of  the  rule  with  the  assertion  that  the 
methods  by  which  ratification  may  be  elTectcd  arc  as  numerous  and  as 
various  as  the  complex  deahngs  of  human  Hfe.  But  he  adds  that:  "He 
who  would  avail  himself  of  the  advantages  arising  from  the  act  of 
another  in  his  behalf  must  also  assume  the  responsibilities.  If  the 
principal  has  knowingly  appropriated  and  enjoyed  the  fruits  and  bene- 
fits of  an  agent's  act,  he  will  not  afterwards  be  heard  to  say  that  the 
act  was  unauthorized.  One  wdio  voluntarily  accepts  the  proceeds  of 
an  act  done  by  one  assuming,  though  without  authority,  to  be  his 
agent,  ratifies  the  act,  and  takes  it  as  his  own,  with  all  its  burdens  as 
well  as  all  its  benefits.  He  may  not  take  the  benefits  and  reject  the 
burdens,  but  he  must  either  accept  them  or  reject  them  as  a  whole." 

This  court,  in  the  case  of  Byrne  v.  Doughty,  13  Ga.  52,  citing  Story, 
Ag.  says :  "To  bind  the  principal,  there  is  no  necessity  for  a  positive  or 
direct  confirmation  on  his  part  of  the  act  of  the  agent,  but  it  may  arise 
by  implication  from  the  acts  or  proceedings  of  the  principal  in  pais. 
*  *  *  And  for  this  purpose  the  acts  and  conduct  of  the  principal 
are  construed  favorably  in  favor  of  the  agent.  Slight  circumstanced 
and  small  matters  will  sometimes  suffice  to  raise  the  presumption  of 
ratification.  *  *  *  Authority  to  do  the  act  is  presumed  from  sub- 
sequent acts  of  assent  and  acquiescence."  In  the  case  of  Hodnett  v. 
Tatum,  9  Ga.  70,  it  was  ruled  that  the  principal  cannot,  of  his  own 
mere  authority,  ratify  the  acts  of  his  agent  in  part  in  regard  to  a  par- 
ticular transaction,  and  repudiate  them  as  to  the  rest ;  and  in  the  opin- 
ion. Judge  Warner,  referring  to  the  facts  in  that  case,  said:  "If  he 
[the  principal]  did  not  intend  to  ratify  the  act  of  his  agent  in  receiv- 
ing the  Alabama  money,  he  ought  to  have  returned  it  within  a  reason- 
able time,  and  not  have  retained  it  upon  his  own  arbitrary  terms."  Mc- 
Cay,  J.,  in  the  case  of  Ketchum  v.  Verdell,  42  Ga.  538,  said :  "If  the 
principal  accepts  the  property  knowing  all  the  facts,  that  is  a  ratifica- 
tion of  the  agency."  In  Murray  v.  Walker,  44  Ga.  58,  it  was  ruled  that 
"the  taking  of  Confederate  currency  by  the  principal,  and  its  use  by 
him,  was  a  ratification  of  the  act  of  the  agent."  To  the  same  effect  is 
the  ruling  made  in  the  case  of  Gilbert  v.  Dent,  46  Ga.  238. 

The  trustees  of  the  defendant  corporation  were  evidently  unwilling  to 
create  a  debt,  and  did  not  intend  to  buy  this  furniture  on  credit,  and 
they  had  the  right  to  refuse  to  do  so  if  they  wished ;  but,  when  they 
discovered  that  Booth  had  purchased  the  furniture  on  their  account, 
then  was  the  time  not  simply  to  repudiate  the  action  of  Booth  in  words, 
but  to  repudiate  it  altogether.  If,  after  such  discovery,  they  had  de- 
clined to  use  the  desks  and  other  property  sold,  which,  being  in  theip 
building  as  a  part  of  the  equipment,  were  being  used  by  them  through 
Callaway,  their  agent,  but  had  returned  them  or  taken  them  out  of  theii 
building  after  proper  notification,  their  wishes  would  have  been  accom- 
plished. But  when,  after  the  knowledge  of  Booth's  purchase,  they  con- 
tinued to  use  it  by  their  agent  and  employe  knowing  that  Booth  claimed 


Ch.  4)  CREATION  OF  THE  RELATION  149 

to  have  bought  it  for  them,  that  use  of  it  made  it  their  property  by 
ratification.'^^    Its  use  by  the  school  was  their  use. 

It  must  therefore,  be  ruled  that,  as  this  evidence  of  ratification  and 
use  of  the  property  was  uncontradicted,  the  verdict  rendered  was  con- 
trary to  the  evidence  in  the  case,  and  the  court  erred  in  overruling  the 
motion  for  a  new  trial.    Judgment  reversed. 

71  In  U.  S.  School  Furniture  Co.  v.  School  District,  56  Neb.  645,  77  N.  AV. 
62,  upon  a  suit  for  money  paid  to  an  agent  of  plaintiff  for  school  furniture, 
the  court  said:  "The  defendant  contends  that  the  furniture  company,  with 
full  knowledge  of  the  material  facts,  ratified  and  approved  the  act  of  its  agi-ut 
in  collecting  the  money  due  to  it  from  the  school  district.  We  think  this  con- 
tention is  sustained  by  the  undisputed  proof.  The  plaintiff  authorized  Mur- 
dock  to  deliver  the  furniture  and  set  it  up  in  the  schoolroom.  In  doing  this 
it  was  necessary  that  he  should  pay  freight  charges,  drayage,  and  other  ex- 
penses. With  the  mouey  obtained  from  the  defendant  he  paid  these  charges, 
and  advised  his  principal  of  the  fact.  His  principal  found  no  fault  and  made 
no  objection.  It  cheerfully  acqliiescod  in  this  part  of  the  transaction,  and 
has  not  at  any  time  offered  to  reimburse  the  defendant  to  the  extent  that  the 
money  collected  was  applied  to  its  use  and  for  its  benefit.  Even  at  the  trial 
it  did  not  offer  to  credit  the  school  district  with  the  amount  so  applied.  Hav- 
ing determined  to  sue  for  the  full  contract  price  of  the  furniture,  it  was  cer- 
tainly the  plain  duty  of  the  furniture  company  to  tender  back  to  the  defend- 
ant so  nmch  of  the  money  paid  to  ]Murdock  as  had  been  necessarily  expended 
by  him  in  performing  the  conditions  of  the  contract.  The  retention  of  such 
money,  while  attempting  to  coerce  payment  of  the  entire  sum  for  wiiich  the 
furniture  was  sold,  puts  plaintiff  in  the  incongruous  attitude  of  holding  fast 
to  the  fruits  of  an  agency  while  insisting  that  the  agency  never  existed.  This 
it  cannot  do.  A  principal  must  adopt  the  acts  of  his  agent  as  a  whole.  He 
will  not  be  permitted  to  retain  the  part  which  is  beneficial  and  reject  that 
which  is  not.  Rogers  v.  Hardw^are  Co.,  24  Neb.  653,  39  N.  W.  S44 ;  Manufac- 
turing Co.  v.  Wagoner,  25  Neb.  439,  41  N.  W.  287;  Waterson  v.  Rogers,  21 
Kan.  529.  The  plaintiff  by  its  conduct  clearly  ratified  the  acts  of  Murdock  so 
far  as  they  were  advantageous  to  it,  and  that,  in  contemplation  of  law, 
amounted  to  a  ratification  of  the  entire  transaction." 

The  Pennsylvania  court,  by  Green,  J.,  in  Wheeler  &  Wilson  Co.  v.  Aughey, 
144  Pa.  398,  22  Atl.  667,  27  Am.  St.  Rep.  638,  put  the  case  thus:  "It  is  of  no 
avail  to  raise  or  discuss  the  question  of  the  means  of  proof  of  the  agent's  au- 
thority. The  very  essence  of  the  rule  is  that  the  agent  had  no  authority  to 
make  the  representation,  condition,  or  stipulation  by  means  of  which  he  ob- 
tained the  property  or  right  in  action  of  which  the  principal  seeks  to  avail 
himself.  It  is  not  because  he  had  specific  authority  to  bind  his  principal  for 
the  i»urpose  in  question  that  the  principal  is  bound,  but  notwithstanding  the 
fact  that  he  had  no  such  authority.  It  is  the  enjoyment  of  the  fruits  of  the 
agent's  action  which  charges  the  iirincipal  with  responsibility  for  liis  act.  It 
is  useless,  therefore,  to  inquire  whether  there  is  the  same  degree  of  technical 
proof  of  the  authority  of  the  agent,  in  the  matter  und(>r  consideration,  as  is 
required  in  ordinary  cases  where  an  aflirmative  liability  is  set  up  against  a 
l)rinci|)al  by  the  act  of  one  who  assumes  to  be  Ins  agent.  There  the  question 
is  as  to  the  power  of  the  assumed  agent  to  imi)ose  a  legal  lialiility  upon  an- 
other persftn,  and  in  all  that  class  of  cases  it  is  entirely  proi)er  to  hold  that 
the  m«-re  derlaratlons  of  the  agent  are  not  sudicient.  T?ut  in  this  class  of 
cases  the  question  is  entirely  different.  Here  the  basis  of  liability  for  the  act 
or  deflaralion  of  the  agent  is  the  fact  that  liie  i)rinciital  has  accepted  the 
benefits  of  the  agent's  act  or  declaration.  When*  that  iiasls  is  made  to  ap- 
pear by  testimony,  the  legal  consi-ciuence  Is  eslalilished.  Mr.  .Instlce  Sliars- 
wood,  In  the  case  above  cited,  after  enumerating  many  instances  in  which 
the  dor-trine  was  enforced,  siims  up  the  snl'j<'ct  thus:  'Many  of  these  cases  are 
put  u|)oii  an  Imitiied  autliorily.  but  tlie  more  reasonable  ground,  ns  it  seems  to 
me,  ia  that  the  party  having  enjoyed  a  benefit  must  take  it  cum  onere.'  " 


150  TiiK  KKi.ATioN  (Parti 

COVKl'XnAT.T.  V.  COXSTART^n. 

(Court  of  Apponls  of  Now   York.   Iss."..     ".»:•  X.  Y.  .•'.(I'.t,  1  N.  E.  SSI.) 

Action  upon  a  note.    Jucly;nK'nt  lor  ilcfcndant. 

Finch,  J.  If  the  note  upon  which  this  action  is  founded  was  not 
paid,  its  makers  were  hahle,  unless  those  of  them  who  were  sureties 
hecame  freed  from  their  obhgation  by  reason  of  some  act  which 
changed  tlicir  contract  or  imperiled  their  rights.  The  referee  does  not 
find  such  payment  as  a  fact,  nor  as  an  inference  from  the  facts  ascer- 
tained. Indeed,  it  is  difficult  to  see  how  any  such  inference  could  have 
been  possible  from  the  proof.  Whatever  may  be  true  as  to  the  want 
of  authoritv  to  sell  the  note  in  the  bank  which  received  it  for  collec- 
tion, it  is  quite  certain  that  the  transaction  between  the  plaintiffs  and 
the  collecting  agent  was  a  sale,  or  an  entirely  void  proceeding.  It 
could  not  be  transformed  into  a  payment  in  hostility  to  the  expressed 
intentions  of  both  parties  who  acted  in  the  transfer.  There  was  a 
sale,  or  an  attempt  at  a  sale,  which  utterly  failed,  but  never  a  pay- 
ment ;  and  an  erroneous  supposition  by  Peters,  the  payee,  as  to  the 
fact  which  produced  the  money,  traceable  to  his  ignorance  of  the 
truth,  cannot  alter  the  nature  of  that  truth.  The  note  being,  then,  un- 
paid, is  due  from  the  makers  to  some  one,  and  must  be  payable  to  Pe- 
ters or  the  plaintiff. 

The  only  concern  of  the  defendants,  if  the  rights  of  the  sureties 
have  not  been  infringed,  is  to  know  to  which  of  two  parties  they  may 
safely  pay  the  debt.  If  they  had  paid  it  voluntarily  to  plaintiff,  could 
Peters,  after  full  knowledge  of  the  situation,  and  with  the  plaintiff's 
money  in  his  pocket,  and  persistently  retained,  successfully  sue  upon 
it  as  owner?  It  is  quite  certain  that  he  could  not.  He  would  be  un- 
able to  produce  the  note,  and  could  not  force  it  from  plaintiff's  pos- 
session without  return  of  the  purchase  money,  and,  while  keeping  that, 
would  be  obliged  to  admit  that  he  held  it  as  a  payment  of  the  note  or 
consideration  of  its  sale,  and  either  alternative  would  be  fatal  to  his 
cause  of  action.  The  defendants  thus  can  pay  the  debt  which  they 
have  not  paid  to  the  plaintiff,  as  its  holder,  with  entire  safety,  and 
without  danger  of  being  liable  to  Peters.  Why,  then,  should  they  not 
pay  it?  If  the  transaction  had  been  found  to  be,  or  shaped  upon  com- 
petent proof  as,  an  advance  by  plaintiff  to  De  Garmo,  the  maker,  of 
the  money  necessary  to  pay  the  note,  the  successful  defense  would 
have  been  payment ;  but  when  nothing  of  the  kind  was  either  done  or 
intended,  or  found  as  a  fact,  and  the  note  remains  unpaid,  why  should 
not  its  maker  pay  it?  It  is  not  claimed  that  the  sureties  directed  or 
requirefl  its  collection,  or  put  the  owner,  whoever  he  might  be,  under 
a  duty  to  enforce  it.  Their  contract  was  not  changed.  They  prom- 
ised to  pay  to  Peters  or  bearer,  and  the  plaintiff  is  the  bearer,  and 
comes  to  them  with  that  title,  and  in  accord  with  their  contract.     They 


Ch.  4)  CREATION  OF  THE  RELATION  151 

agreed  that  the  note  might  be  sold  when  they  made  their  contract  ne- 
gotiable. No  right  of  theirs  was  violated,  and  they  suffered  no  injury. 
If  they  desired  the  note  promptly  sued,  they  could  say  so  as  well  to 
plaintiff  as  to  Peters,  or  pay  it  and  take  their  remedy  against  De 
Garmo. 

Their  sole  defense,  therefore,  was  that  which  prevailed  with  the  ref- 
eree :  That  the  bank  had  no  authority  to  sell,  and  so  plaintiff'  got  no 
title.  Undoubtedly,  Peters  might  have  repudiated  the  act  of  his  agent, 
when  he  learned  what  it  was.  The  moment  he  became  possessed  of 
that  knowledge,  he  was  bound  in  common  honesty  to  return  the  money 
paid  him  by  mistake,  or  retain  it  as  it  was  given  to  his  agent.  The 
Jaw  will  not  endure  that  he  shall  keep  the  product  of  the  agent's  act 
rind  yet  repudiate  his  authority.  Even  in  a  case  of  fraudulent  repre- 
sentations by  the  agent,  never  at  all  authorized  or  suspected  by  the 
principal,  a  reception  and  retention  of  the  proceeds  may  make  the  lat- 
ter responsible  for  the  fraud.  National  L.  Ins.  Co.  v.  Minch,  53  N. 
Y.  144;  Plathaway  v.  Johnson,  55  N.  Y.  93,  14  Am.  Rep.  186.  No 
wrong  or  violence  is  done  to  the  rights  of  Peters  by  the  process.  His 
agent  obtained  plaintiff's  money  by  a  pretended  sale  of  the  note  in  ex- 
cess of  the  authority  conferred,  and  Peters  knows  it.  If,  then,  he 
keeps  the  money,  and  avails  himself  of  the  fruits  of  the  unauthorized 
act,  he  cannot  be  allowed  to  repudiate  it.  But  he  does  not  repudiate  it, 
or  attempt  to  do  so.  He  sets  up  no  claim  to  the  note,  and  says  only 
that  he  wanted  the  money  and  did  not  care  how  he  got  it ;  that  is,  \ 
whether  by  a  sale  or  a  payment.  The  fact,  then,  that  the  note  was  not  \ 
paid,  and  he  knew  it,  although  for  a  time  he  thought  that  it  was,  fol-  I 

lowed  by  his  continued  retention  of  the  money,  his  omission  to  demand  I 

the  note,  or  assert  any  title  to  it,  admits  of  no  other  interpretation  than         / 
a  ratification  of  the  sale.''-     It  is  all  the  more  easily  inferred  because       / 

72  See,  also,  Waterson  v.  Rofcers,  21  Kan.  .^)20  (1S70),  in  which  it  was  sai(J- 
hy  Brower,  .T. :  "I'pon  thj'se  facts  we  roniark  tliat  one  who  vohiiitarily  ac- 
cepts the  iirocecds  of  an  act  done  by  one  assuming,  tliou;;h  without  authority, 
to  be  his  ajjent,  ratifies  tlie  act,  and  takes  it  as  his  own,  with  all  its  burdens, 
as  well  as  its  l)ene(its.  He  may  not  take  the  benefits  and  re.j(H't  the  burdens, 
hut  he  either  accejjfs  or  rejects  them  as  a  whole.  This  is  a  ;reneral  i)roposi- 
lion,  to  which,  of  course,  there  may  lie  exceptions  and  limitations.  Itut  still 
it  is  potent  in  this  case  as  showinj:  that  there  was  some  l(>stiniony  from  which 
a  jury  mi^ht  deduce  a  ratification  by  him  of  the  acts  of  the  wife,  lie  acted 
knowin;;ly,  and  repudiated  notlunu  of  iienelit  to  himself.  Can  he  avoid  the 
burdens?  Counsel  say  that  CallaKhcr  aiiandoned  the  farm,  and  that  Ko?;ers 
was  comiielled  to  take  it  or  let  it  run  down,  and  that  such  men>  measure  of 
protecljc'ii  ouj-'lit  not  to  be  construed  as  a  ratification  of  the  unauthorized  act 
of  his  wife,  r.ut  his  action  was  not  limited  to  that.  He  took  possession  of 
the  buy  which  bad  bdon^'ed  to  (Jalla^'ber,  and  was  kIvcu  him  l)y  the  arbitra- 
tors, and  fed  it  to  his  stock.  'J'be  cattle  and  also  the  horses  which  he  had 
turned  over  to  (JallaKher,  and  which  were  returned  only  In  luirsuam-e  of  (he 
arbitration,  he  keejis  the  possession  of.  And,  in  the  letter  which  he  wrote 
on  recripL  of  (he  news,  he  does  not  deny  Ins  wife's  authority,  or  propose  to 
repudiate  the  entire  acli((n,  but  oidy  to  contest  the  jiayment  of  these  iu)te.s. 
Nowhere  does  be  insist  \]]u)\\  (Jallau'lier's  continuing  the  h'ase,  or  (he  coidraots 
he  had  made  with  him,  or  ofTer  any  objection  to  the  termination  of  the.se,  and 


i:>2  TiiK  UKLATION  (Part  1 

his  interest  lay  in  that  ilirection.  It  made  Ihc  money  in  his  possession 
lawfnlly  liis.  anil  took  him  wholly  out  of  the  eontroversy.  It  is  just 
to  the  plaintilT.  who  parted  with  his  money  as  purchaser,  and  upon  the 
faith  and  credit  of  the  note.  It  does  no  injustice  to  the  sureties,  for 
they  have  no  equity  to  be  discharged  without  payment.  Circumstances 
might  have  occurred  which  would  have  entitled  theni  to  a  release. 
Possibly,  if  they  had  been  lulled  into  a  false  security  by  information 
and  a  consequent  belief  that  the  note  was  paid,  and  due  to  the  silence 
and  delay  of  the  purchaser,  the  principal  in  the  mean  time  becoming 
insolvent,  some  just  ground  might  exist  for  their  discharge.  But  noth- 
ing of  the  kind  is  in  the  case.  No  such  defense  is  pleaded,  and  no 
suggestion  made  of  any  injury  resulting  from  the  sale.  The  evidence 
shows  that  Terwilliger,  one  of  the  sureties,  was  notified  of  a  proposed 
transfer,  and  not  only  did  not  object,  but  promised  to  see  his  associ- 
ates. They  say  only  that  they  never  consented  to  a  sale.  They  do  not 
say  that  they  w-ere  not  notified  of  an  intended  transfer ;  and  since  they 
make  no  complaint,  either  in  the  pleadings  or  the  proof,  that  they  have 
been  misled  or  harmed  by  the  transaction  treated  as  a  sale,  and  ratified 
as  such  by  Peters,  there  is  no  injustice  done  to  them.  Certainly,  they 
have  no  equity  to  compel  the  plaintifif,  in  hostility  to  his  intention  and 
against  his  will,  to  pay  their  note,  for  which  he  was  in  no  manner 
bound. 

We  find  no  difficulty,  therefore,  in  applying  to  the  case  the  doctrine 
of  ratification.  Coykendall  made  the  purchase  before  he  had  seen  the 
note  or  the  indorsements  upon  it.  Peters  knew  the  whole  truth, — at 
least,  when  examined  as  a  witness  on  the  trial, — and,  instead  of  re- 
pudiating the  sale,  said  only  that  he  got  the  money  for  his  loan,  "and 
that  was  the  end  of  it." 

The  cases  cited  by  the  respondent  are  not  inconsistent  with  our  view 
of  the  transaction.  Some  of  them  w^ere  founded  upon  statutes  relating 
to  corporations,  and  making  certain  transfers  void  because  illegal. 
Gillet  V.  Phillips,  13  N.  Y.  114;  Houghton  v.  McAuliife,  26  How. 
Prac.  270.  In  one  of  them  the  agent  of  the  payee  did  not  sell,  or  in- 
tend to  sell,  the  note,  and  nothing  was  said  which  necessarily  gave  him 
notice  of  a  different  intention  on  the  part  of  the  person  taking  the 
note.  Burr  v.  Smith,  21  Barb.  262.  Beyond  the  cases  cited,  our  at- 
tention has  been  incidentally  drawn  to  one  which  tends  in  many  re- 
spects to  justify  the  contention  of  the  respondents:  Fuller  v.  Bennett, 
55  Mich.  357,  21  N.  W.  433.  It  is  observable,  however,  that  the  ques- 
tion of  payment  arose,  and  upon  a  very  debatable  state  of  facts ;  and 
also  that  the  payee  never  knew  that  his  note  was  not  paid  until  five 
years  after  the  money  was  received,  and  when  the  situation  of  the  par- 

the  .surrender  of  the  property  back  to  himself.  Now,  it  seems  to  us  ttiat  in 
these  matters  there  was  testimony  tending'  to  show  a  ratification.  We  do  not 
mean  to  be  understood  as  saying  that  it  was  conclusive,  or  was  not  subject  to 
explanation  or  contradiction;  but  we  do  hold  that,  if  upon  it  the  jury  had  found 
there  was  a  ratification,  we  should  not  have  felt  warranted  in  setting  aside 
the  verdict  as  entirely  without  support." 


Ch.  4)  CREATION    OF    THE    RELATION  153 

ties  had  been  changed  by  the  intervening  death  of  the  maker.  Our 
great  respect  for  the  learned  judge  who  wrote  the  opinion  has  caused 
us  to  give  additional  reflection  to  the  views  we  have  expressed,  but 
has  not  shaken  our  conviction  that  in  this  case  the  title  of  the  plaintiff 
to  the  note  sued  upon  was  good. 

The  judgment  should  be  reversed,  and  a  new  trial  granted;  costs  to 
abide  the  event. 


WILLIAMS  v.  STORM. 
(Supreme  Court  of  Tennessee,  1SG9.    46  Tenn.  [6  Cold.]  203.) 

George  Andrews,  J.  Mrs.  Storm,  the  defendant,  was  the  equitable 
owner  of  a  farm  in  Roane  county.  With  the  purpose  of  cultivating 
and  improving  the  premises,  she  leased  them  to  one  Brinkman,  and 
also  constituted  him  her  agent,  to  make  certain  improvements  upon  the 
estate,  the  nature  and  character  of  which  improvements  do  not  appear 
in  proof.  For  the  purpose  of  enabling  Brinkman  to  carry  on  the 
farm,  and  make  the  necessary  improvements,  Mrs.  Storm  gave  him  a 
letter  of  credit,  authorizing  him  to  draw  on  one  De  Armond,  to  the 
amount  of  three  hundred  dollars.  De  Armond  being  unable,  or  un~ 
willing  to  furnish  the  money,  Brinkman  applied  to  W.  S.  McEwen, 
who  agreed,  upon  the  personal  guaranty  of  Brinkman,  to  furnish  the 
required  credit,  and  did  accordingly  supply  Brinkman  with  cash  and 
various  articles  for  the  use  of  the  farm,  to  the  amount  of  over  three 
hundred  dollars.  Two  hundred  and  fifty  dollars  of  this  amount,  and 
perhaps  the  whole,  was  afterwards  repaid  to  McEwen  by  ]\Irs.  Storm. 

But  Brinkman,  after  this  time,  requiring  further  supplies,  and  Mc- 
Ewen being  unwilling,  in  consequence  of  delay  in  the  former  payment, 
to  make  further  advances,  Brinkman  presented  the  letter  of  credit  to 
complainant,  Williams,  who,  upon  the  credit  of  Mrs.  Storm,  gave  to 
Brinkman  a  letter  of  credit  to  McEwen,  for  the  further  amount  of 
three  hundred  dollars.  It  does  not  appear  whether  Williams  was 
aware  of  the  previous  advances  made  by  McEwen.  Upon  the  credit 
of  Williams,  thus  obtained,  Brinkman  procured  from  McEwen,  cash 
and  other  articles,  to  the  amount  of  about  three  hundred  and  eighty 
dollars,  which  were  cmi)loyed,  as  Brinkman  testifies,  in  improvcnients 
and  expenses  on  Mrs.  Storm's  land,  but  in  what  manner  does  not  ap- 
pear.   This  amount  has  been  repaid  to  McEwen  by  complainant. 

Mrs.  Storm  resided  in  Europe,  and  there  is  no  evidence  that  she 
had  any  knowledge  of  the  transaction  with  Williams,  till  the  filing  of 
complainant's  bill.  The  bill  in  this  cause,  is  filed  by  Williams,  to  com- 
pel payment  by  Mrs.  Storm,  of  the  amount  thus  advanced  by  him. 
Upon  the  hearing,  on  plcarlings  and  proof,  the  chancellor  dismissed 
the  bill,  and  the  complainant  ai)pcalL'd  to  this  court. 

The  letter  of  credit  given  by  Mrs.  Storm  to  Brinkman,  and  ad- 
dressed to  De  Armond,  constituted  no  authority  to  I'.rinkman  to  pro- 


X/lX'iJM'W. 


ir>4  Tin:  iiin.ATum  (i'arl  1 

cure  this  loan  by  credit  from  Williams,  and  there  is  no  i-»roof  what- 
ever, that  Ih-inUman  hat!  any  authority,  as  Mrs.  Storm's  aj^ent,  to  bind 
l\er  in  the  transaction.  lUit  it  is  claimed  for  complainant,  that  Mrs. 
Storm,  hy  her  conduct,  held  I'.rinkman  out  to  the  world  as  her  agent, 
and  thus  remlered  herself  liable  for  any  contracts  he  might  rriake  in 
her  name,  and  that,  as  the  supplies  procured  through  complainant's 
credit  were  applied  to  her  use  and  benefit,  she  is  legally  bound  to  pay 
for  them.  There  is  nothing  to  show  that,  in  the  present  case,  Mrs. 
Storm  held  r.rinkman  out  to  the  world  as  her  agent,  duly  authorized 
to  borrow  money,  or  to  purchase  property  on  credit  in  her  name. 
There  is  nothing  in  the  agency  proven  to  have  existed,  which  requires 
the  existence  of  such  authority ;  and  the  simple  fact,  that  she  paid  the 
debt  first  incurred  by  Brinkman  to  McEwen,  cannot  be  considered  as 
a  binding  admission  on  her  part,  of  his  authority  to  make  similar  con- 
tracts in  her  name  in  the  future. 

There  is  no  proof  that  Williams  knew  of  the  former  transaction 
with  iNIcEwen.  So  far  as  appears,  he  proceeded  solely  upon  the  letter 
of  credit  to  De  Armond,  which  was  exhibited  to  him,  and  upon  his  be- 
lief in  the  good  faith  of  Brinkman,  and  the  responsibility  of  Mrs. 
Storm. 

The  authority  of  Brinkman  extended  only  to  the  borrowing  of  the 
sum  of  three  hundred  dollars,  and  that  only  upon  his  letter  of  credit 
to  De  Armond.  And  even  if  that  authority  were  held  to  extend  to  the 
borrowing  of  that  particular  sum  of  McEwen,  instead  of  De  Armond, 
it  was  then  exhausted,  and  could  not  be  extended  into  a  general  au- 
thority to  borrow  as  many  sums  and  of  as  many  different  persons  as 
he  might  subsequently  think  fit  to  require.  The  complainant  had  no- 
tice of  Brinkman's  want  of  authority ;  and  though  his  case  is  a  hard 
one,  he  must  be  held  to  have  loaned  to  him  his  credit  at  his  peril. 

The  general  rule  is  unquestioned,  that,  if  an  agent  exceeds  his  au- 
thority in  purchasing  property,  or  otherwise  making  engagements  in 
the  name  of  his  principal,  and  the  principal  knowingly  receives  and  re- 
tains the  property,  or  accepts  the  benefit  of  the  engagement  made,  he 
thereby  ratifies  the  contract  made  by  his  agent.  But  this  rule  only  ap- 
plies in  cases  where  the  principal  has  knowledge  of  the  transaction, 
and  an  opportunity  to  repudiate  the  acts  of  the  assumed  agent.'^^ 

If  an  agent  has,  by  acts  and  contracts,  beyond  the  scope  of  his  au- 
thority, and  without  the  knowledge  of  his  principal,  purchased  prop- 
erty or  borrowed  money  in  the  name  of  his  principal,  and  expended 
the  same  in  the  care,  preservation,  or  improvement  of  his  princii)ars 
estate ;  and  at  the  time  when  the  transaction  comes  to  the  knowledge 
of  the  principal,  the  property  has  been  consumed,  or  expenditures 
made  in  such  manner  that  the  property  cannot  be  restored,  or  the  con- 

7  3  See,  also,  Bryant  v.  Moore,  26  Me.  84,  45  Am.  Dec.  9G  (184G).  If  the  prin- 
cipal has  sold  the  property  received  from  the  agent  before  he  has  knowledge, 
a  failure  to  return  it  is  no  ratification.  Martin  v.  Hickman,  64  Ark.  217,  41 
S.  W.  8G2  (1897). 


/Yi 


Ch.  4)   '^  —  1^-  ^   CREATION  OF  THE  RELATION  155 

tract  repudiated,  the  principal  is  not  bound.  Where  the  principal  has 
the  option  to  repudiate  the  contract,  or  to  ratify  it,  he  is  bound  prompt- 
ly to  do  either  the  one  or  the  other.  But  a  party  cannot  so  deal  with 
an  unauthorized  person  assuming  to  act  as  agent,  as  to  leave  the  prin- 
cipal no  option,  and  to  compel  him  by  force  of  the  mere  fact  that  the 
transaction  has  been  for  his  benefit,  to  ratify  the  contract.  1  Am. 
Lead.  Cases,  574. 

It  does  not  appear  in  this  case,  how  the  money  obtained  by  Brink- 
man,  upon  the  complainant's  credit,  was  expended ;  what  improve- 
ments were  made ;  what  expenses  of  the  farm  were  defrayed  or  what 
property  purchased  by  its  means  or  whether  any  such  property  or  im- 
provements remain  for  the  benefit  of  the  defendant,  or  that  the  im- 
provements and  purchases  were  such  as  Brinkman  was  authorized  by 
her  to  make ;  and  while  the  hardship  to  the  complainant  is  obvious, 
it  cannot  be  permitted  that  unauthorized  persons  shall  make  improve- 
ments in  their  own  discretion,  upon  the  estates  of  others,  without  the 
knowledge  of  the  owner,  and  when  too  late  to  repudiate  the  unauthor- 
ized action,  call  upon  the  owners  to  ratify  it  by  payment  of  the  ex- 
penses incurred.  It  may  or  may  not  be,  that  the  benefit  accruing  to  the 
defendant  in  this  case,  may  impose  upon  her  a  moral  obligation  to  pay 
for  these  purchases,  expenses  and  improvements ;  but  to  hold  that  the 
obligation  is  a  legal  one,  would  place  it  in  the  power  of  unauthorized 
persons,  to  improve  the  holders  of  property  out  of  their  estates. 

The  decree  will  be  affirmed.  / 


^i/Wi  iUiA4 


(e)  By  SitENCR  ' 

A/a  Ur.  f 

AMAKER 


ST. Vqte  b/jN^Afe'  ADVERTisiNb*  CO.  v."  waW^ 

(St.  Louis  Court  of  Appeals,  Missouri,  1905.  115  Mo.  App.  270,  90  S.  W.  lol.) 
Action  for  rentals  for  six  months  advertisements  on  billboards, 
owned  by  plaintiff.  The  advertising  contract  had  been  made  by  one 
Lurie,  "selling  agent"  of  defendants.  Plaintiff  claimed  (1)  that  if 
Lurie  had  not  authority  to  advertise  for  defendant,  defendant  by  fail- 
ing to  reply  to  a  letter  written  by  plaintiff  about  the  contract  had  rat- 
ified the  same;  and  (2)  that  Lurie's  authority  was  ample  in  any  case. 
From  judgment  for  $3fX),  defendant  appeals. 

GooDK,  jJ*  1.  The  ground  for  a  verdict  in  favor  of  the  iilaintilT 
allowed  by  the  instructions  was  that  defendant  had  ratified  the  c<in- 
tract  made  by  Lurie  in  its  name.  The  first  instruction  treated  the  de- 
fendant's failure  to  disclaim  liability  within  a  reasonable  time  after 
receiving  plaintiff's  letter  of  Xovcmber  20lh  as  in  itself  a  ralilication. 
Every  fact  hypothesised  in  that  instruction  was  undisputed.  Hence 
the  charge  was  equivalent  to  directing  a  verdict  for  the  plaintiff.     Wc 

7«  I\'irt  of  the  nidiiiuii  Is  ouiittcd.  X^ 

\ 

I 


V 


/: 


150 


Tino    RELATION 


(Part  1 


/ 


V 


dunk  the  instruction  uont  too  far.  in  view  of  the  fact  that  plaintiff 
hael  already  performed  half  the  contract  before  it  wrote  the  letter  and 
could  not  have  been  imluceil  by  defendant's  silence  to  remler  that 
much  of  the  agreed  service,  and  of  the  further  fact  that  defendant's 
silence  did  not  induce  the  plaintitT  to  refrain  from  proceeding  against 
Lurie  personally  while  it  might  have  collected  the  rent  from  him.  The 
silence  of  a  principal,  after  receiving  notice  that  his  agent  has  assumed 
to  bind  him  by  an  unauthorized  act,  may  be  a  fact  to  be  weighed  on 
the  issue  of  whether  the  principal  ratified  the  act,  or  may  raise  a  pre- 
sumption that  he  ratified  it,  according  to  circumstances.  If  the  con- 
troversy between  the  agent  and  the  third  party  is  completed  before 
the  principal  is  notified,  so  that  no  detriment  can  result  to  the  third 
party  from  the  silence  of  the  principal,  his  failure  to  repudiate  the 
act  is  evidence,  to  be  considered  with  other  facts  in  the  case,  that  he 
adopted  it  as  his  own,  or  ratified  it.  Union  Gold  Mining  Co.  v.  Bank, 
2  Colo.  248,  262;  Breed  v.  Bank,  4  Colo.  481,  507;  Culver  v.  Ashley, 
1  Am.  Lead.  Cas.  (5th  Ed.)  p.  719,  note;  Hortons  v.  Townes,  6  Leigh, 
47,  60;  Bryant  v.  Moore,  26  Me.  84,  87,  45  Am.  Dec.  96;  Bates' 
Ex'rs  V.  Best's  Ex'rs,  13  B.  Mon.  215,  218;  Corser  v.  Paul,  41  N. 
H.  24,  31,  77  Am.  Dec.  753;  Philadelphia,  etc.,  Ry.  v.  Cowell,  28  Pa. 
329,  70  Am.  Dec.  128.  And  it  will  be  conclusive  evidence  of  ratifi- 
cation if  not  explicable  on  any  other  theory.  Bank  of  Ky.  v.  Schuyl- 
kill Bank,  1  Pars.  Eq.  Cas.  180,  267 ;  Hart  v.  Dixon,  5  Lea,  336,  339. 
i'.iu  if  the  transaction  is  still  in  progress,  and  the  silence  of  the  prin- 
Icipal  after  notice  induces  the  party  dealing  with  the  agent  to  pursue 
a  course  which  would  be  detrimental  to  him,  if  the  principal  is  not 
held  bound,  a  ratification  of  the  unauthorized  act  will  be  presumed, 
his  result  will  obtain  when  the  person  dealt  with  is  induced  \o/ 
alter  in  any  way  his  position  to  his  detriment,  as  by  parting  with  nions 
or  property  on  the  assumption  that  the  agent's  act  was  valid,  or  omit- 
ting to  take  steps  against  the  agent,  or  otherwise  to  improve  his  posi- 
tion. Union  Mining  Co.  v.  Bank  and  Breed  v.  Bank,  supra.  The  re- 
sult will  obtain,  too,  when  the  principal  accepts  the  benefit  of  what  the 
agent  did.  McLachlin  v.  Barker,  64  Mo.  App.  511.  The  cases  abound 
in  such  remarks  as  that  a  principal  must  disavow  the  conduct  of  an 
agent  done  in  excess  of  authority,  in  a  reasonable  time  after  getting 
notice  of  it,  on  pain  of  being  deemed  to  have  assented  to  the  conduct ; 
and  some  decisions  hold  that  the  disavowal  must  be  immediate.  But 
the  prevalent  doctrine  is  that  it  must  occur  in  a  reasonable  time. 
These  remarks  are  to  be  construed  with  reference  to  the  facts  before 
I  the  court;  and  we  think  the  true  doctrine  is  that  a  conclusive  presump- 
jtion  of  acquiescence  is  raised  from  a  principal's  silence  only  when 
otherwise  loss  would  fall  on  an  innocent  party.  The  contrary  doctrine 
would  be  arbitrary  and  irrational ;  and  such  rules  of  law  should  be 
avoided.  An  examination  of  numerous  cases  has  shown  that  in  every 
instance  wherein  the  presumption  of  ratification  was  raised  because 
of  a  principal's  silence  some  change  in  the  position  of  the  parties  con- 


Ch.  4)  CREATION  OF  THE  RELATION         /        lo  <  / 

cerned  occurred  subsequent  to  notice  to  the  principal  which  would  have 
resulted  in  injustice  to  the  party  dealt  with  by  the  agent  if  the  princi- 
pal had  been  excused  on  the  score  of  want  of  authority  in  the  agent. 
We  cite  illustrative  decisions  on  the  point.  Peck  v.  Ritchey,  66  Mo. 
114;  Teasdale  v.  McPike,  25  Mo.  App.  341;  Johnston  v.  Berry,  3 
111.  App.  256;  Hanks  v.  Drake,  49  Barb.  186;  Hawkins  v.  Lange, 
22  Minn.  557;  Farwell  v.  Howard,  26  Iowa,  381 ;  Cooper  v.  Schwartz, 
40  Wis.  54;  Pittsburgh,  etc.,  Ry.  Co.  v.  Woolley,  12  Bush,  451; 
Marshall  v.  Williams,  2  Biss.  255,  Fed.  Cas.  No.  9,136;  Woodward 
V.  Suydam,  11  Ohio,  360;  Matthews  v.  Fuller,  123  Mass.  446;  Fos- 
ter V.  Rockwell,  104  Mass.  167 ;  Ruffner  v.  Hewitt,  7  W.  Va.  585. 
The  real  ground  on  which  the  principal  is  held  liable  under  such 
circumstances  is  that  of  estoppel,  though  it  is  often  said  that  the  prin- 
cipal ratified  what  was  done  by  his  agent  by  remaining  silent.     Teas-  , 

^dale  V.  McPike,  25  Mo.  App.  341 ;'  Hoppe  v.  Saylor,  53  Mo.  App.  4.  ^3 

In  its  genuine  sense  ratification  depends  on  intention.     It  is  the  vol- 

'untary  assumption,  on   full   information,  _of__an  unauthqrizecL  act  or 

"agreement  by  the  party  in  whose  behalf  it  was'  done  or  made.    The  :;  "^ 

intention  to  ratify  may  be  manifested  by  express"  words  or  by  conduct.  -    -^ 

Either  may  establish   that  the  principal   elected  to  adopt  the  act  or        . 
agreement  as  his  own;    and  the  election  once  made  with  knowledge  -.  \ 

of  the  facts  becomes  irrevocable.  Besides  a  true  ratification  inten- 
tionally made,  the  law  recognizes  a  constructive  one  where  none  was 
intended.  The  latter  sort  of  ratification  is  a  legal  presumption,  raised 
against  the  principal  because  he  has  behaved  in  such  a  way  that  the 
party  dealt  with  by  the  agent  would  be  injured  if  the  transaction  was  s^ 

repudiated.  ~^ 

It  is  really  an  equitable  estoppel,  and  is  regulated  by  the  law  of  "^ 

estoppel.  The  estoppel  may  arise  from  the  fact  that  the  principal 
was  silent  when  he  ought  to  have  declared  his  intention  not  to  be 
tJouhd  by  the  agent's  act,  provided,  as  said  above,  his  silence  leads 
the  party  dealt  with  to  alter  his  position  for  the  worse.  This  is  iden- 
tical with  the  principles  governing  estoppel  by  acquiescence  in  in- 
stances not  involving  the  relation  of  principal  and  agent.  The  ques- 
tion often  arises  directly  between  an  agent  and  his  principal  in  cases 
where  the  latter  tries  to  hold  the  former  responsible  for  acting  with- 
out authority.  In  such  litigation,  if  the  principal  does  not  promptly 
repudiate  the  transaction,  but  waits  until  doing  so  will  cause  loss  to 
the  agent,  or  until  it  appears  that  the  transaction  will  cause  loss,  in- 
stead of  profit,  to  himself,  he  will  be  estopped  to  deny  responsibility. 
A  class  of  cases  which  frequently  present  the  matter  for  decision  is 
where  a  broker  or  commission  merchant  lias  bought  or  sold  property 
for  a  principal  contrary  to  instructions.  In  .such  in.stanccs  the  prin- 
cipal is  not  permitted  to  remain  silent  after  notice  in  order  to  watch 
the  course  of  the  market  and  determine  whether  he  will  adopt  or  re- 

.  pudiate  the  deal  according  as  it  may  prove  profitable  or  the  reverse.  ^ 

Teasdale  v.  McPike,  supra. 


^^ 


158  TiiK  KKLATiON  (Parti 

'  In  the  present  onsc  it  is  certain  tlu-  adx  erlisinc^  to  November  20th 
l(ras  not  done  by  plaintilY  in  reliance  on  (.lelentlant's  failure  to  answer 
trie  letter  of  that  date;  and  hence  defendant's  silence  is  not  ground 
to  estop  it  from  tlenying  HabiHty  for  installments  of  rent  which  had 
accrued  previously.  In  other  words,  the  presumption  that  it  ratified 
the  contract  Lurie  made  with  plaintiff  ought  not  to  be  raised  merely 
from  its  silence  when  notifie(^of  the  contract.  But  it  is  estopped  to 
disclaim  liability  for  the  rent  \i  the  bulletin  boards  accruing  subse- 
quent to  the  date  it  had  notice.  V  Plaintiff  requested  a  reply  to  its  let- 
ter, and.  in  view  of  the  fact  tBat  Lurie  was  conducting  business  in 
defendant's  name,  a  reply  shqWkl  have  been  made.  In  commercial 
aft'airs  prompt  answers  to  such  notifications  are  rather  strictly  insisted 
on  by  the  law.  Plaintiff  supposed  it  had  a  contract  with  defendant 
and  was  furnishing  the  advertising  service  on  that  supposition.  Hence 
the  presumption  is  fair  that,  if  defendant  had  repudiated  the  contract, 
plaintiff  would  have  terminated  the  service  at  once.  The  advertising 
tended  to  increase  defendant's  sales,  and  was  beneficial  to  it,  as  well  as 
to  Lurie.  Therefore  defendant  was  interested  in  its  continuance.  A 
case  exactly  like  this  as  to  the  immediate  point,  and  in  which  similar 
rulings  were  made,  is  Bryce  v.  Clark  (Com.  PI.)  16  N.  Y.  Supp.  854. 
See,  too,  Cornelius  v.  Reiser  (Com.  PI.)  18  N.  Y.  Supp.  113. 

In  view  of  certain  facts  established  by  the  proof,  we  have  doubted 
if  defendant's  omitting  to  answer  plaintiff's  letter  requesting  a  pay- 
ment on  the  rent  due  for  advertising,  was  evidence  for  the  jury  on 
the  question  of  an  intentional  ratification  by  defendant  of  the  con- 
tract. In  other  words,  whether  the  facts  of  the  present  case  permit 
the  application  of  the  rule  that  the  silence  of  a  principal  on  receiving 
notice  of  an  act  done  by  his  agent  in  excess  of  authority  is  evidence 
of  ratification  when  the  third  party  dealt  with  is  not  prejudiced  by 
the  principal's  silence."  This  point  depends  on  whether  the  proof 
agamst  an  intentional  ratification  of  the  contract  with  plaintiff  was  so 
positive  as  to  leave  no  room  for  the  finding  that  it  was  ratified.     It 

75Tbe  limitations  upon  tbe  doctrine  that  silence  is  evidence  of  ratification 
are  elaborately  discussed  in  Thompson  v.  Mfg.  Co.,  GO  W.  Va.  42,  53  S.  E.  008, 
6  L.  R.  A.  (N.  S.)  311  (1900),  ante.  p.  105. 

The  principle  is  well  stated  in  Williams  v.  Merritt,  23  111.  573  (18G0) :  "Long 
acQuie.scence  in  an  act  done  by  an  agent  beyond  his  powers,  without  objection 
at  the  time,  and  which  may  be  inferred  from  the  silence  of  the  jirincipal  when 
informed  of  the  facts,  will  amount  to  a  conclusive  presumi)tion  of  the  ratilica- 
tion  of  an  unauthorized  act,  especially  where  such  acquiscence  is  otherwise 
not  to  be  accounted  for.  or  such  silence  is  either  contrary  to  the  duty  of  the 
princijial,  or  has  a  tendency  to  mislead  the  agent  and  involve  innocent  par- 
ties. This  is  the  doctrine  where  no  agency  in  fact  existed.  Where  an  agency 
really  existed,  the  presumption  of  the  acquiescence  of  the  principal  is  much 
stronger  and  more  cogent.  .Story  on  Agency,  §§  255,  25(5;  1  Livermore  on 
Agency,  44.  I'.ut  the  reasons  for  this  rule  do  not  apply  with  e(pial  force  in 
favor  of  tbe  agent  himself  who  has  wrongfully  coiiniiittcd  the  unauthorized 
act."  Silence  which  would  really  amount  to  an  inqilied  ratification  as  to  a 
third  person,  might  not  amount  to  that  in  favor  of  the  agent.  This  is  the 
more  true  if  inaction  is  due  to  assurances  fi'om  the  agent,  or  to  an  effort  to 
avoid  loss  from  the  agent's  act.  Triggs  v.  Jones,  40  Minn.  277,  48  N.  W.  111.'! 
(1801). 


Ch.  4)  CREATION    OF    THE    RELATION  159 

is  certain  that  defendant  was  chagrined  when  it  learned  Lurie  had 
contracted  in  its  name  for  the  advertising,  at  once  protested  against 
the  contract,  and,  because  of  it  and  other  instances  of  unsatisfactory 
conduct,  terminated  business  relations  with  him.  But  neither  to  Lurie 
nor  the  plaintiff  did  defendant  declare  an  intention  not  to  be  bound  by 
the  agreement,  and  its  attitude  on  that  question  was  not  made  clear 
by  anything  it  said  or  did,  perhaps  was  not  determined  at  once,  but 
left  open  for  further  consideration  and  decision  after  legal  advice 
was  taken.  It  was  at  least  equivocal  so  far  as  the  record  shows.  As 
no  conclusion  on  this  point  is  compelled  by  the  evidence,  we  hold  the 
issue  of  intentional  ratification  was  for  the  jury,  and  that  defendant's 
silence  was  a  fact  relevant  to  that  issue.  If  the  defendant  at  any  time 
purposely  ratified  the  agreement,  it  could  not  disclaim  liability  there- 
after. Andrews  v.  Ins.  Co.,  92  N.  Y.  596;  Brock  v.  Jones,  16  Tex. 
461 ;    1  Parsons,  Contracts  (9th  Ed.)  p.  50,  note  (h).     *     *     * 

For  failure  to  properly  submit  the  case  to  the  jury,  the  judgment 
was  reversed  and  the  cause  remanded. 


MOBILE  pMM:i.  CO.  V.  JAY, 


(Supreme  Court  of  Alabama,  1S80.    05  Ala.  113.) 

Action  by  Dr.  Jay  for  surgical  services  in  amputating  the  leg  of  one 
Richardson,  who  had  been  injured  by  the  cars  while  in  defendants' 
employ.  Plaintiff  was  called  by  one  O'Brien,  a  supervisor  of  de- 
fendants' road,  who  had  no  authority  to  employ  him.  Burnett,  plain- 
tiff's attorney,  wrote  the  president  of  the  road,  Daniel  Tyler,  and 
Tyler's  reply  was,  over  the  defendants'  objection,  admitted  in  evi- 
dence to  show  that  he  had  knowledge  of  O'Brien's  act  and  did  not  re- 
pudiate it.  The  letter  said  the  writer  had  no  knowledge  of  the  plain- 
tiff's claim,  but  when  the  superintendent  of  the  road  returned  he  would 
submit  the  matter  to  him.     Judgment  for  plaintiff. 

Somkkvilm:,  J.  The  letter  of  Daniel  Tyler,  president  of  the  de- 
fendant railway  company,  was  improperly  admitted  as  evidence  in 
the  trial  before  the  nisi  prius  court.  It  bears  no  date.  It  does  not 
appear  when  it  was  written,  nor  when  received.  No  evidence  was 
offered  to  prove  the  contents  of  the  letter  of  Burnett,  to  which  it  was 
a  reply;  nor  was  it  proposed  to  make  it  relevant  by  any  such  extrane- 
ous evidence.  Without  the  ligiit  of  other  facts,  we  are  left  in  the  (hirk 
as  to  wiicther  or  not  it  related  to  the  subject-matter  of  this  ])articular  l\  \u. 
suit.  Prima  facie,  therefore,  the  letter  was  irrelevant,  and  the  objec-  uVOf  ^1 
tion  to  its  admission  should  have  been  sustained.  ' 

The  first  charge  given  by  the  ])residing  judge  to  the  jury  d<ies  uol 
embody  an  accurate  ex|)f)siti()n  of  tliic  law  of  agency  and  ratification. 
The  correct  rule  seems  to  be,  thatj  where   the  ])rincii)al    has   a   full/ 
knowledge  of  the  acts  of  his  agent,Urom  which  he  receives  a  dim  t 


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V 


160 


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TUK    UKT,ATION 


(Part  1 


benefit,  lie  must  dissent,  and  j;ive  notice  of  his  noncononrrcnce,  within 
a  reasonable  time,  or  his  assent  and  ratification  will  be  presumed. 
Brigham  v.  Peters,  1  Gray  (Mass.)  147.  y 

The  first  head-note  ii/the  case  of  Powal's  Adm'r  v.  Henry,  27  Ala, 
612,  which  holds,  that,  "if  an  ag^t  exceeds  his  authority,  although 
the  principal  may  ratify  the  act;  j^t,  to  avoid  it,  he  is  not  obliged 
to  give  notice  that  he  repudiates  it,"  Is  too  comprehensive  in  its  state- 
ment of  the  law.  It  is  true  that  me|e  knowledge,  on  Uie  part  of  the 
principal,  of  an  agent's  unauthorized  action,  will  not  rt|Kike  silence,  or/ 
non-interference,  in  all  cases  amount  to  ratification,  I  But  it  woulc. 
in  those  cases  wdiere  the  party  dealing  with  the  agent  isLTiiMedoi^^rejj 
idiced  (Smith  v.  Sheeley,  12  Wall.  358  [20  L.  Ed.  430] )1  or  where 
le  usage  of  trade  requires,  or  fair  dealing  demands,  a  pjpmpt  reply 
from  the  principal  (Wharton  on  Agency,  §  86).  In  al/such  cases, 
the  principal,  if  dissatisfied  with  the  act  of  the  agent,  and  fully  in- 
formed of  what  has  been  done,  must  express  his  dissatisfaction  within 
a  reasonable  time.    2  Greenl.  Ev.  §  66. 

The  railway  company  received  no  direct  benefit  from  the  medical 
services  rendered  by  Dr.  Jay  to  one  of  its  employes.  The  charge  in 
question  does  not  conform  to  the  above  principles,  and  the  exception 
to  it  must  be  sustained. 

It  is  unnecessary  to  consider  the  other  points  raised  by  the  record. 
Reversed  and  remanded.^^ 

7  6  The  cases  often  fail  to  distinguish  between  ratification  by  silence  and 
estoppel.  Cf.  Owens  Pottery  Co.  v.  Turnbull  Co.,  75  Conn.  628,  54  Atl.  1122 
(1903);  Metcalf  v.  Williams,  144  Mass.  452,  11  N.  E.  700  (1887);  Hall  v. 
Harper,  17  111.  82  (1855) ;  Reid  v.  Alaska  Packing  Co.,  47  Or.  215,  83  Pac.  1.S9 
(1905) ;   Cooper  v.  Mulder,  74  Mich.  374,  41  N.  W.  1084  (1889). 

Where  the  principal  neither  does  nor  says  anything  upon  being  informed  of 
the  act  of  the  alleged  agent,  he  is  bound,  if  at  all,  more  properly  upon  the  ground 
of  estoppel.  Thompson  v.  Mfg.  Co.,  60  W.  Va.  42,  53  S.  E.  008,  6  L.  R.  A.  (N.  S.) 
(1906),  ante,  p.  105 ;  Pope  v.  Armsby  Co.,  Ill  Cal.  159,  43  Pac.  589  (1896).  If 
there  is  no  element  of  estoppel,  mere  silence  does  not  amount  to  estoppel. 
California  Bank  v.  Sayre,  85  Cal.  102,  24  Pac.  713  (1890). 

In  Bredin  v.  Du  Barry,  14  Serg.  &  R.  30  (1825).  Gibson,  J.,  says  that  the  dis- 
avowal by  the  principal  must  be  prompt,  at  the  moment  the  fact  that  the 
agent  has  transcended  his  authority  comes  to  his  knowledge.  The  circum- 
stances may  be  such  as  to  demand  immediate  action ;  but  the  better  rule  re- 
quire.s  the  dissent  to  be  expressed  within  a  reasonable  time,  under  the  circum- 
stances of  the  particular  case.  Lyon  v.  Tams,  11  Ark.  189  (1850),  citing  Stoi'y 
on  Agency. 

It  is  sometimes  said  that  ratification  cannot  be  inferred  from  mere  silence. 
Something  more  is  required — an  affirmative  act.  Hatton  v.  Stewart,  70  Tenn. 
(2  Lea)  2.33  (1S79).  This  is  certainly  not  the  case  in  ratification  by  estoppel. 
See  Saveland  v.  Green,  40  Wis.  431,  438  (1876),  in  which  Lyon,  J.,  puts  the 
matter  thus:  "The  rule  as  to  what  amounts  to  a  ratification  of  an  unauthor- 
ized act  is  elementarj',  and  may  be  stated  thus :  When  a  person  assumes  in 
good  faith  to  act  as  agent  for  another  in  a  given  tran.saction,  but  acts  with- 
out authority,  whether  the  relation  of  principal  and  agent  does  or  does  not 
exist  between  them,  the  person  in  whose  behalf  the  act  was  done,  upon  being 
fully  informed  tliereof,  must  within  a  reasonable  time  disaffirm  the  act,  at 
least  in  cases  where  his  silence  might  operate  to  the  prejudice  of  innocent 
parties,  or  he  will  be  held  to  have  ratified  such  unauthorized  act."  Approved 
in  Ileyn  v.  O'Hagen,  00  Mich.  150,  26  N.  W.  861  (1886).  See,  also,  Robbins  v. 
Blaiiding,  87  Minn.  246,  91  N.  W.  844  (1902). 


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CREATION  OF  THE  RELATION 


161 


WHITLEY  V.  JAMES  et  al. 
(Supreme  Court   uf  Georgia,  1904.     121  Ga.  521,  49  S.  E.  GOO.) 

Equitable  petition  for  the  recovery  of  certain  land,  removal  of  cloud, 
etc.  The  petition  alleged  that  defendant  James,  as  agent  of  Gen. 
Gordon  to  sell  land  for  cash,  had  without  authority  sold  on  credit  to 
corporations  of  which  he  was  president.  Plaintiff  claimed  under  a 
quitclaim  from  Gen.  Gordon,  and  makes  James  and  all  the  corporations 
claiming  under  his  deeds  defendants.  The  court  below  sustained  de- 
murrers to  the  petition  as  to  all  the  corporations.     Plaintiff  excepted. 

Lamar,  J.  [After  stating  the  facts:]  L  The  petition  alleges  that 
the  unauthorized  credit  sale  was  made  by  the  agent  in  1889,  that  the 
deed  was  recorded  in  the  same  year,  and  that  the  defendant  corpora- 
tions had  been  in  possession  from  that  date  until  April,  1903,  when 
the  present  suit  was  filed — a  period  of  14  years.  If  the  original  pur- 
chaser knew,  or  was  charged  with  notice,  that  the  agent  was  exceeding 
his  authority  in  making  a  sale  on  credit  instead  of  for  cash,  this  would 
put  the  conveyance  where  it  could  be  treated  as  void  at  the  option  of 
the  principal.  Civ.  Code  1895,  §  3021.  Compare  Loveless  v.  Fowler, 
79  Ga.  135,  4  S.  E.  103,  11  Am.  St.  Rep.  407;  Lumpkin  v.  Wilson,  5 
Heisk.  (Tenn.)  555. 

2.  If,  on  the  other  hand,  the  sale  is  attacked  because  the  agent  of 
the  vendor  was  also  president  or  agent  of  the  purchaser,  the  eft'ect  of 
the  dual  agency  would  authorize  the  principal  to  repudiate  the  trans- 
action. Civ.  Code  1895,  §  3010;  Red  Cypress  Lumber  Co.  v.  Perry, 
118  Ga.  876,  45  S.  E.  674;  Moore  v.  Casev,  116  Ga.  28,  42  S.  E.  258; 
Story  on  Agency  (8th  Ed.)  §  211. 

3.  But  whether  the  attack  is  because  of  the  dual  agency,  or  of  a 
violation  of  the  instructions,  the  sale  was  not  absolutely  void,  so  as 
to  be  incapable  of  ratification.  The  agent  actually  had  the  power  to 
sell.  There  was  at  least  an  attempted  execution  of  the  power,  and 
the  principal  could  waive  the  violation  of  instructions  or  the  results  of 
the  inconsistent  positions.  The  ratification,  whether  soon  or  late,  was 
the  equivalent  of  an  original  command,  and  cured  any  defect  in  the 
execution  of  the  power.  The  ratification  must,  of  course,  be  with 
knowledge  of  the  material  facts ;  nor  would  the  princii)al  be  required 
to  repudiate  the  act  of  his  agent  immediately  upon  the  discovery  that 
there  had  been  anything  which  rendered  the  sale  voidable.  But  if, 
after  knowledge  of  what  the  agent  had  done,  the  principal  made  no 
objection  for  an  unreasonable  time,  a  ratification  would  result  by  op- 
eration of  law. 

What  is  a  period  long  enough  to  bring  about  such  a  result  would 
usually  be  a  question  for  the  jury,  depending  upon  the  peculiar  cir- 
cumstances of  each  case."    But  in  proceedings  to  recover  the  land  and 

"7  In  Pcfk  V.  intclif'.v,  fiH  Mo.  11 J  (1S77).  tlio  court  said  that  each  rase  must 
be  "governed  by  its  own  iic'cnli:ir  circniiistjinces.     Under  some  circumstancoH 

GODD.rB.&  A. — 11 


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set  aside  the  deed  tlic  pleadings  of  the  priiu-ipal  may  themselves  allege 
enough  to  show  a  ratification  results  as  matter  of  law.  In  the  anal- 
ogous case  of  voidable  sales  to  himself  by  an  administrator,  it  has  been 
held  that  failure  to  repudiate  for  seven  years  will  raise  the  presump- 
tion that  the  owner  acquiesces  in  the  irregular  and  voidable  sales.  Ad- 
vantage can  be  taken  of  such  lapse  of  time  by  a  demurrer.  Civ.  Code 
1895,  §  2>77S\  Griffin  v.  Stephens,  119  Ga.  139,  46  S.  E.  66,  and  cita- 
tions. If  there  be  a  good  and  sufficient  explanation  as  to  why  the 
principal  did  not  know  of  the  transaction,  or  had  been  unable  to  dis- 
cover it,  or  if  there  be  an  excuse  for  delay  in  bringing  the  suit,  these 
facts  would  have  to  be  specially  averred  in  order  to  prevent  the  de- 
fendant from  taking  advantage  of  the  acquiescence  implied  by  nonac- 
tion for  a  long  lapse  of  time. 
p~ —  Whether,  therefore,  the  statute  of  limitations  be  treated  as  a  bar  to 
the  remedy,  or  raising  a  presumption  of  payment,  the  demurrer  was 
properly  sustained.  The  purchaser  took  possession  in  1889.  This  was 
itself  some  notice,  and,  when  followed  by  continued  possession  under 
a  deed  recorded  for  14  years,  with  nothing  to  explain  why  the  prin- 
cipal did  not  know,  or  could  not  learn  by  the  exercise  of  ordinary  care, 
of  what  had  been  done,  the  case  was  within,  and  not  without,  the  rule. 
The  period  was  long  enough  to  raise  the  presumption  of  acquiescence 
in  the  act  of  the  agent.  Such  acquiescence  validated  the  deed.  The 
validation  conveyed  the  title  completely  to  the  purchaser.  The  claim 
for  purchase  money  is  barred,  there  being  no  averment  of  a  written 
or  sealed  promise  to  pay  the  purchase  price.  Hays  v.  Callaway,  58 
Ga.  288  (2). 

These  conclusions  make  it  unnecessary  to  consider  the  effect  of  the 
recitals  in  the  transfer  or  conveyance  to  Whitley.  They  are  strength- 
erred,  however,  by  a  consideration  of  the  recital  therein  as  to  the  "land 
sold  by  James."  This  itself  goes  far  to  indicate  a  ratification  of  the 
sale,  but  with  a  transfer  of  the  principal's  claim  for  what  would  be  an 
accounting.  But  while  the  question  was  argued,  the  record  does  not 
present  any  question  as  to  whether,  under  Civ.  Code  1895,  §  3079,  this 
claim  could  be  assigned,  for  James  did  not  except  to  the  judgment  re- 
taining him  as  a  party  defendant,  and  that  dismissing  the  corporations 
was  proper. 

Judgment  affirmed. 

the  act  of  the  agent  woukl  bind  the,  principal,  if  he  aid  not  Immediately  re- 
pudiate it.  while  other  cases  may  be  supposed  where  his  silence  for  a  week 
would  not  have  that  effect."  See,  also,  .Stearns  v.  Johnson,  19  Minn.  540  (Gil, 
470)  (1873). 


A 


Ch.  4)  CREATION  OF  THE  RELATION  ^9^^f^^^^j/ 

KETCHEM  V.  MARSLAND. 

(Supreme  Court  of  New  York,  Appellate  Term,  First  Department,  1S9G.     IS 
Misc.  Rep.  450,  42  N.  Y.  Supp.  7.) 

Action  for  the  value  o''  services  as  a  dentist  rendered  by  plaintiff 
to  defendant's  infant  daughter  at  the  request  of  one  ^Irs.  lieecher,  in 
whose  custody  the  child  had  been  temporarily  placed  by  the  parents. 

BiscHOFr,  J.'^*  [After  discussing  the  authority  of  such  an  agent  to 
act  for  the  parent  in  case  of  immediate  needs  of  the  child:]  *  *  * 
Conceding,  then,  that  Mrs.  Beecher's  act  in  requesting  the  plaintiff  to 
perform  the  services  in  suit  was  in  excess  of  her  implied  powers,  yet, 
having  the  care  of  the  child,  she  had  some  powers,  as  agent,  to  bind 
the  defendant  for  actual  necessaries ;  and,  with  this  in  mind,  we  pro- 
ceed to  the  further  question  in  the  case,  that  of  the  defendant's  ratifica- 
tion of  this  originally  unauthorized  act. 

At  the  beginning  of  the  year  1893  the  plaintiff  sent  a  bill  to  the  de- 
fendant for  these  services,  and  received  no  answer,  either  in  approval 
or  dissent ;  and,  during  the  ensuing  three  years,  or  more,  up  to  the 
time  of  the  commencement  of  this  action,  several  communications  of 
his  to  the  defendant,  with  regard  to  his  claim,  met  with  no  better  re- 
sponse. Was  not  a  ratification  to  be  inferred  from  such  silence?  ^'-^ 
Clearly,  the  answer  must  be  in  the  affirmative.  Mrs.  Beecher  was  not 
a  mere  intermeddler,  without  shadow  of  right  to  bind  the  defendant, 
such  as  might  have  justified  his  ignoring  a  claim  based  upon  her  as- 
sumed agency  in  his  behalf.  She  had  been  accorded  the  care  and  cus- 
tody of  his  child,  with  certain  implied  duties  to  perform  for  the  in- 
fant's well-being;  and  the  procuring  of  certain  necessaries,  should  cir- 
cumstances require,  was  one  of  these  duties. 

Granted  that  the  services  performed  by  the  plaintiff  were  not  such 
as  the  defendant  became  liable  for,  in  the  first  instance,  through  the 
agent's  act  merely,  yet  this  was  because  the  agent,  being  authorized  to 
contract  for  some  services,  was  not  authorized  as  to  these.  She  ex- 
ceeded her  actual  powers,  while  clothed  with  some,  and,  but  for  the 
principal's  subsequent  assent,  express  or  implied,  he  would  not  have 
been  bound. 

Under  the  circumstances  of  the  case,  the  defendant's  subsc(|ucnt 
assent  appeared  from  his  failure  to  dissent  during  this  extensive  period 
succeeding  his  knowledge  of  the  facts.  He  was  bound  to  disavow 
Mrs.  Beecher's  act  within  a  reasonable  time  after  notice   (1   Am.   (S: 

T8  I'jirt  of  tho  ojiiiilnn  is  oniillcd. 

T^Tlie  extent  tn  wliidi  mere  sileiire  iiuiy  he  evideiiet'  of  rjifilieiifioii,  even 
of  tlic  iief  of  a  striiii-er.  at  lejist  if  lie  li.is  in  «"<•<!  f.iitli  assumed  to  act  as 
a>;enr,  Is  fnlly  discnsseil  in  Ljidd  v.  Ilildelminl,  21  Wis.  i:;."),  i»  .\ni.  Iteji.  44.'5 
(INTO),  citinirat  ienfitli  from  Woodward,  .1.,  in  I'ldladelpiiia,  \V.  &  It.  li.  Co.  v. 
<'o\ve||.  lis  I'a.  ."..'!(;.  70  Am.  Dec.  128  (ISOT).  See,  also,  Kobblus  v.  Blundlng,  S7 
Minn.  L'4<;,  91  N.  \V.  S14  (1!»02). 


/ 


1G4  TIIK    UELATION  (Pait  1 

En^.  Eiic.  Law  [2(1  Kd.]  1203,  and  cases  collated  in  note  2);  and 
whether  or  not  his  delay  was  unreasonable  was  a  question  of  fact  (Id. 
1205).  "Where  an  a£:jeney  actually  exists,  the  mere  acquiescence  of  the 
principal  may  well  give  rise  to  the  presumption  of  an  intentional  rat- 
itication  of  the  act."  Story,  Ag.  §  256.  "Where  the  relation  of  prin- 
cijial  and  agent  does  in  fact  exist,  although  in  the  particular  transac- 
tion the  agent  has  exceeded  his  authority,  an  intention  to  ratify  will 
always  be  presumed  from  the  silence  of  the  principal  who  has  re- 
ceived a  letter  informing  him  what  has  been  done  on  his  account." 
1  Liverm.  Ag.  50. 

The  author  last  quoted  does  not  incline  to  the  view  that  a  ratifica- 
tion should  be  implied  from  a  party's  silence  after  notice  of  an  act 
done  on  his  account  by  a  stranger  who  has  totally  assumed  the  agency, 
but  adjudications  are  not  wanting  in  support  of  it.  "To  say  that  si- 
lence is  no  evidence  of  it  [ratification]  is  to  say  that  there  can  be  no 
implied  ratification  of  an  unauthorized  act,  or,  at  least,  to  tie  up  the 
possibility  of  ratification  to  the  accident  of  prior  relations.  Neither 
reason  nor  authority  justifies  such  a  conclusion.  A  man  who  sees 
what  has  been  done  in  his  name  and  for  his  benefit,  even  by  an  inter- 
meddler,  has  the  same  power  to  ratify  and  confirm  it  that  he  would 
have  to  make  a  similar  contract  for  himself;  and,  if  the  power  to 
ratify  be  conceded  to  him,  the  fact  of  ratification  must  be  provable 
by  the  ordinary  means."  Railroad  Co.  v.  Cowell,  28  Pa,  329,  70  Am. 
Dec.  128.  "Whether  silence  operates  as  presumptive  proof  of  ratifica- 
tion of  the  act  of  a  mere  volunteer  must  depend  upon  the  particular 
circumstances  of  the  case.  If  these  circumstances  are  such  that  the 
inaction  or  silence  of  the  party  sought  to  be  charged  as  principal  would 
be  likely  to  cause  injury  to  the  person  giving  credit  to  and  relying 
upon  such  assumed  agency,  or  to  induce  him  to  believe  that  such 
agency  did  in  fact  exist,  and  to  act  upon  such  belief  to  his  detriment, 
then  such  silence  or  inaction  may  be  considered  as  a  ratification  of  the 
agency."  Heyn  v.  O'Hagen,  60  Mich.  157,  26  N.  W.  863.  See,  also, 
Saveland  v.  Green,  40  Wis.  438 ;  Triggs  v.  Jones,  46  Minn.  277,  48  N. 
W.  1113;  Kelly  v.  Phelps,  57  Wis.  425,  15  N.  W.  385. 

The  rule  as  evolved  by  the  adjudications  is  stated  to  be  (1  Am.  & 
Eng.  Enc.  Law  [2d  Ed.]  1209)  that,  "although  the  relation  of  the  par- 
ties as  principal  and  agent  is  an  important  consideration,  yet,  in  the 
case  of  a  mere  stranger  or  volunteer,  the  silence  of  the  alleged  prin- 
cipal, when  fully  informed  of  the  unauthorized  act,  is  evidence  of  a 
ratification,  though  far  less  strong," — citing  Union  Gold  Min.  Co.  v. 
Rocky  Mountain  Nat.  Bank,  2  Colo.  248;  Foster  v.  Rockwell,  104 
Mass.  172;  Harrod  v,  McDaniels,  126  Mass.  415;  Ladd  v.  Hildebrant, 
27  Wis.  135,  9  Am.  Rep.  445. 

In  the  case  at  bar  we  are  not  required  to  go  so  far  as  to  decide  that  one 
may  become  bound,  upon  a  failure  to  disavow  within  a  reasonable  time, 
for  the  act  of  a  mere  volunteer,  assumed  to  be  done  in  the  former's 


Ch.  4)  CREATION  OF  THE  RELATION  165 

name,  since  here  the  ratification  attaches  to  an  existing  agency  which 
had  been  exceeded,  and  the  reason  upon  which  the  rule  as  to  implied 
ratification  is  founded  may  readily  be  found  existent  in  tliis  case. 
Judgment  affirmed,  with  costs. 


(d)  By  Exforci 


NG  TH5  Contract  oe  Bbinging  Suit  -^^^^^ 


LA  GRANDE  NAT.  BANK  v.  BLUM 


/ 


(Supreme  Court  of  Oregon,  1895.     27  Or.  215,  41  Pac.  659.) 

Action  on  a  promissory  note,  which  plaintiff  bank  claimed  was  made'^'^\#-A^ 
by  defendants  in  discharge  of  liability  as  indorsers  of  two  notes  of  /  i   r  { 

one  Ramsey.    The  jury  found  that  the  cashier  of  the  bank  had  agreed'  ^  ^       . 

with  defendant  to  accept  the  note  in  question  to  secure  performance  on  ■     'i  •  j^lJ^M 

Blum's  part,  either  to  collect  and  pay  over  the  proceeds  of  the  Ram-         ''  .  * 

sey  notes,  or,  if  unable  to  do  that,  to  return  the  notes.     Ramsey  was     ,     vr-}{/f^  *    >- 
insolvent,  and  Blum  returned  the  notes  uncollected.     The  bank  now  '  .  *    ^*^ 

sues  on  the  note  made  by  Blum.  I  Lj^  {IAJIm^-^^^ 

Bean,  C.  J.®°     It  is  contended  that  the  court  erred  in  refusing  to  di-'^  ^  ^1    i-t' 

rect  a  verdict  in  favor  of  plaintiff,  at  the  close  of  the  testimony,  on  the     \u^^   A^    *^ 
ground  that  the  evidence  for  the  defendants  showed  that  the  agreement       \        ,'•      y 
set  up  in  the  answer  was  made  with  the  cashier  of  plaintiff  without  its        \i\    '. '- C  ^^A^^ 
authority.     It  is  unnecessary  for  us  to  enter  into  an  examination  of       / ""   ' 
the  power,  duty,  and  authority  of  the  cashier  of  a  bank,  to  ascertain     /CA-^tAfxI'V**^ 
whether  the  alleged  agreement  or  contract  set  up  in  the  answer  was  /     (/  J  J  I      A 
within  the  scope  of  his  agency;   for  the  plaintiff,  by  bringing  this  ac;/ (^\JT^  f  '  • 
|on  on  the  note  received  by  the  cashier  under  such  contract,  has,  so 
ir  as  this  proceeding  is  concerned,  ratified  the  entire  contract. 

No  rule  of  law  is  more  fundamental  than  if  the  principal  elects  to 
r^ify  any  part  of  the  unauthorized  act  of  an  agent  he  must  ratify 
the  whole.  He  cannot  accept\hat  part  which  is  favorable  to  himself, 
and  repudiate  the  remainder,  j  As  said  by  Mr.  Justice  Story :  "The 
principal  cannot,  of  his  own  mere  authority,  ratify  a  transaction  in 
part,  and  repudiate  it  as  to  ihjk.  rest.  He  must  either  adopt  the  whole 
or  none."  Story,  Ag.  §  250.  And  "from  this  maxim,"  says  Chief 
Justice  Smith,  "results  a  rule  of  universal  application  that,  where  a 
contract  has  been  entered  into  by  one  man  as  agent  of  another,  the 
person  on  whose  behalf  it  has  been  made  'cannot  take  the  benefit  of 
It  without  bearing  its  burdens.  The  contract  must  be  performed  in  its 
integrity.'  "  Rudasill  v.  Falls,  92  N.  C.  222.  Indeed,  reason,  as  well 
as  authority,  is  all  one  way  on  this  question,  Mcch.  Ag.  §  130;  Cole- 
man V.  Stark,  1  Or.  116;  Ebcrts  v.  Selover,  44  Mich.  519,  7  N.  W. 
225,  38  Am.  Rep.  278;  McClurc  v.  Briggs,  58  Vt.  82,  2  Atl.  583,  56 
Am.  Rep.  557. 

Now,  in  this  case,  if  the  cashier  of  the  bank  exceeded  his  authority 
in  making  the  contract  with  the  defendants  set  up  in  tiie  answer,  and 

^'>  I'nrt  of  tho  f>pi;ii()n  Is  oinittcd. 


1(»6  Tin:  lUM-ATioN  (Parti 

in  acccptiiiEf  the  tiotc  in  snit,  llio  plaintiff  was  not  hound  thcrchy; 
hut  it  was  hounil  to  take  tiie  contract  in  its  entirety  or  not  to  recog- 
nize it  at  aU.  It  cannot  altirni  (liat  part  of  his  act  which  is  of  ad- 
vantage to  it.  and  repudiate  the  rest.     *     *     * 

After  ruhng  against  ]>hiiutiff  on  certain  matters  of  evidence  and  in- 
structions by  the  trial  coini,  ihc  court  afiirmed  the  judgment  for  de- 
fendant.*^ 


NICHOLS,  SHEPHERD  &  CO.  v.  SHAFFER. 
(Supreme  Court  of  Miohisau,  ISSG.    (S  Micb.  599,  30  N.  W.  38.3.) 

Replevin.     Plaintiff  brings   error.     Affirmed. 

Campbell,  C.  J.  PlaintitY  brought  this  suit  to  replevy  a  10  horse- 
power engine,  with  truck  and  other  appendages,  claiming  to  hold  it 
under  a  chattel  mortgage  given  in  April,  1883,  upon  this  property,  and 
upon  a  17  horse-power  engine  and  a  separator,  to  secure  $1,390  in 
several  installments.  In  July,  1884,  one  Adams,  an  agent  of  plaintiff, 
went  to  defendant  to  get  the  mortgaged  property.  Shaffer  at  that 
time  gave  him  up  all  the  other  property,  but  desired  to  keep  this  en- 
gine. This  was  in  fact  left,  and  the  rest  taken  away.  At  the  same 
time  a  portable  saw-mill  was  turned  over  to  Adams,  and  included  in 
a  new  chattel  mortgage  of  the  same  conditions  as  the  old  one.  All 
the  other  property,  including  this  saw-mill,  was  sold  under  the  mort- 
gage security.  No  extension  of  time,  or  other  legal  consideration 
passed  for  the  saw-mill  mortgage.  The  whole  dispute  in  the  case 
arises  upon  whether  this  was  merely  an  additional  security,  or  whether 
the  saw-mill  was  put  in  upon  the  consideration  that  the  property  now 
replevied  should  be  released  from  the  mortgage.  The  jury  found  for 
the  defendant. 

If  defendant  and  his  witnesses  told  the  truth,  and  the  jury  evidently 
believed  them,  then  there  was  no  question  but  that  the  saw-mill  was 
intended  to  be  a  substitute  for  the  engine  which  was  released.  Upon 
this  question  the  verdict  is  conclusive,  if  the  other  difficulties  suggested 
do  not  stand  in  the  way. 

The  principal  contest  is  upon  the  authority  of  Mr.  Adams.  The 
court  told  the  jury  he  had  no  authority  to  make  the  exchange,  unless 
it  was  ratified,  but  left  it  to  the  jury  to  determine  whether  it  was  rat- 
ified or  not.  The  several  assignments  of  error  all  bear  upon  this  ques- 
tion of  ratification. 

It  appears  from  the  record  that  one  Worden,  the  collecting  agent 
of  plaintiff,  went  in  October,  1884,  to  Shaffer,  and  wanted  this  en- 

81  But  an  iK'tion  against  the  agent  to  hold  him  accountable  for  his  wronj^ful 
acts  against  the  primiiial  is  not  necessarily  ii  ratification  of  his  acts,  so  as  to 
affect  a  third  person's  liability  to  the  principal.  Barnsdall  v.  O'Day,  134  Fed. 
S28,  07  C.  C.  A.  278  (lOO.J). 


Ch.  4)  CREATION  OF  THE  RELATION  167 

gine,  and  did  not  get  it,  and  that  Shaffer  claimed  it  had  been  released; 
and  this  replevin  suit  was  the  sequel  to  this  visit.  It  also  appears  that 
the  saw-mill  was  sold  on  foreclosure,  as  well  as  the  other  property, 
and  appropriated  for  the  benefit  of  plaintiff".  There  was  considerable 
testimony  concerning  the  value  of  the  various  articles,  and  about  the 
dealings  of  the  parties,  which  had  some  bearing  on  the  probabilities. 
^^'e  see  no  reason  v/hy  it  was  not  admissible,  and  we  think  it  was  also 
proper  to  show  the  profession  and  assumptions  of  authority  of  the 
various  agents  who  appeared  in  the  matter.  These  alone  would  not 
prove  agency,  and  so  the  court  held.  But  it  was  of  the  utmost  im- 
portance to  know  on  what  understanding  the  saw-mill  mortgage  was 
given. 

We  have  no  doubt  that  the  court  was  correct  in  its  various  instruc- 
tions to  the  effect  that  plaintiff'  could  not  avail  itself  of  the  saw-mill 
mortgage,  and  repudiate  the  consideration  for  which  it  was  made. 
Whatever  may  have  been  the  authority  of  Adams  to  release  the  en- 
gine from  the  first  mortgage,  there  can  be  no  doubt  that  what  he  did 
and  represented  in  obtaining  the  saw-mill  mortgage  bound  the  plain- 
tiff, if  plaintiff  chose  to  keep  and  enforce  that  instrument.  It  thereby, 
at  least,  ratified  his  agency  in  taking  it,  and  must  be  responsible  for 
the  manner  in  which  it  was  obtained.  Any  other  doctrine  would  lead 
to  strange  consequences.  It  could  not  demand  or  recover  the  prop- 
erty involved  in  this  suit  without  restoring  what  was  taken  by  its  agent 
in  lieu  of  it.  Whether  the  corporate  action  had  become  irrevocable 
or  not  before  Gordon's  visit  in  October,  1884,  full  notice  was  given 
them,  and  its  liability  was  thereafter  fixed.  No  attempt  has  been  made 
to  restore  Shaffer's  rights.  Plaintiff  has  put  itself  upon  a  denial  of 
them,  and  the  jury  has  found  against  its  denials.^__ ,_ 

The  issue  is  a  very  simple  one,  and  does-iio't  call  for  much  discus- 
sion.    The  judgment  must  be  affirmed. 


NYE  V.  SWAN. 
(Supreme  Court  of  Mimicsota,  isn2.     49  Minn.  4.^1,  ~^2  N.  W.  .">0.) 

MiTciiKLL,  J.**"  This  was  an  action  to  have  deed  from  plaintiff  to 
defendants,  in  form  an  absolute  conveyance,  declared  a  mort,i;a.i;e, 
and,  as  such,  adjudged  usurious  and  void,  or,  if  the  court  should  fintl 
it  not  void,  that  the  plaintiff  be  allowed  to  redeem  by  paying  the  de- 
fendants the  amount  which  the  court  should  find  due  thereon.  In  their 
answer  the  defendants  stood  upon  the  ground  that  the  deed  was  in 
fact,  as  it  was  in  form,  an  absolute  conveyance.  The  facts,  as  found 
by  the  court  and  jury,  were  as  follows: 

That  in  November,  1886,  the  phiintiff  was  the  owner  of  the  land 
in  question;   that  at  that  time  one  While  was  the  agent  of  the  defend- 

82  I'art  of  flio  ii|ininti  is  oinitti-d. 


1(58  THE  RELATION  (Part  1 

ants  for  the  purpose  of  purchasing  lands  for  them,  and  for  no  otlier 
purpose,  and  was  furnished  hy  them  with  money  to  pay  for  such  lands 
as  he  might  huy ;  that,  assuming  to  act  as  the  agent  of  defendants, 
he  loaned  i?800  of  this  money  to  plaintiff  under  an  agreement  that 
it  should  be  repaid  within  100  days,  with  an  additional  $100  for  the 
use  of  the  $800  for  that  period  of  time,  and  at  the  same  time  as  se- 
curity for  the  loan  took  from  plaintiff,  and  plaintiff  executed,  the 
deed  in  question  to  defendants,  the  consideration  named  in  the  instru- 
ment being  $1,000.  This  deed  was  executed,  not  as  an  a1)solute  sale 
and  conveyance,  but  merely  as  security.  White  had  no  authority  from 
defendants  to  lend  money  for  them  to  any  one.  In  the  spring  of 
1887,  defendants,  having  been  informed  that  plaintiff  claimed  that  the 
deed  was  given  merely  as  a  mortgage,  inquired  of  White  as  to  the 
facts,  and  were  informed  by  him  that  plaintiff's  claim  was  false ;  that 
he  had  made  an  absolute  purchase  of  the  land  from  him,  and  had 
never  loaned  him  any  money  or  taken  the  deed  as  a  mortgage.  De- 
fendants, relying  on  White's  statements,  and  believing  them  true,  have 
always  claimed  that  the  deed  was  an  absolute  conveyance,  and  treated 
it  as  such,  claiming  that  they  w^ere  the  owners  of  the  land. 

The  court  also  found  that  White  charged  defendants  $1,000  as  the 
purchase  price  of  the  land,  and  that  "the  defendants  allowed  and  paid 
the  same  to  White  before  they,  or  either  of  them,  had  any  notice  or 
knowledge  that  the  plaintiff  made  any  claim  that  the  deed  was  given 
as  a  mortgage  or  to  secure  a  loan."  This  finding  is  probably  not  im- 
portant, but  the  part  of  it  quoted  is  unsupported  by  any  evidence. 
There  is  the  bare  statement  of  one  of  the  defendants  that  they  paid 
$1,000  for  the  land,  but  not  a  particle  of  evidence  as  to  when  or  how 
it  was  paid.  So  far  as  appears,  White  is  still  their  agent,  and  his  ac- 
count as  such  unclosed,  and,  for  anything  that  appears,  the  "payment" 
referred  to  might  have  been  a  mere  matter  of  bookkeeping  by  White's 
charging  defendants  and  crediting  himself  with  $1,000. 

Aside  from  this,  we  think  that  the  findings  were  justified  by  the 
evidence.  The  only  one,  the  correctness  of  which  defendants'  coun- 
sel seriously  disputes,  is  the  one  to  the  effect  that  the  deed  was  exe- 
cuted as  security  for  a  loan  of  money,  and  not  as  an  absolute  sale  and 
conveyance  of  the  land ;  and  this  contention,  as  we  understand  him, 
he  makes,  not  upon  the  ground  that  the  evidence  was  insufficient  to 
justify  a  finding  that  the  actual  agreement  between  White  and  plaintiff 
was  that  the  deed  was  to  be  merely  security  for  the  loan,  but  that 
inasmuch  as  White  had  no  authority  to  make  loans  and  take  mortgages 
for  defendants,  but  had  authority  to  buy  lands,  and  pay  for  them,  and 
take  absolute  conveyances,  therefore  the  deed  was  an  absolute  sale 
and  conveyance  of  the  land  by  plaintiff  to  defendants,  and  that  the 
defendants  have  a  right  to  retain  and  hold  it  as  such.  It  would  seem 
that  to  state  such  a  proposition  is  to  refute  it.  Plainly  stated,  it  is 
that  if  an  agent,  intrusted  with  money  to  buy  land  for  his  principal, 
should,  without  authority,  lend  the  money  and  take  a  mortgage  as  se- 


jf\^    ^^Vv 


Ch.  4)  CREATION    OF    THE    RELATION  1G9 

curity,  the  principal  would  have  a  right  to  change  it  into  such  a  con- 
tract as  the  agent  was  authorized  to  make,  and  hold  it  as  an  absolute 
conveyance  of  the  land,  although  the  other  party  never  made  any  such 
contract. 

The  only  legal  principle  which  counsel  invokes  in  support  of  his 
contention  is  the  elementary  one,  that  a  person  who  deals  with  an 
agent  is  bound  to  inquire  as  to  the  nature  and  extent  of  his  authority, 
and  that  the  principal  is  only  bound  by  the  acts  of  the  agent  which 
are  within  the  scope  of  his  authority, — a  rule  the  correctness  of  which 
no  one  will  dispute,  but  which  counsel  has  in  this  case  wholly  mis- 
applied. He  has  overlooked  the  equally  elementary  rule  that,  where 
an  agent  has  entered  into  an  unauthorized  contract  in  behalf  of  his 
principal,  the  latter  cannot  ratify  a  part  of  it,  and  repudiate  the  re- 
mainder, but  must  either  adopt  the  whole  or  none,  and,  a  fortiori,  if  he 
adopts  it,  he  must  adopt  it  as  made,  and  not  as  something  entirely  dif- 
ferent. There  may  be  cases  where  the  transaction  includes  several 
things  which  are  severable  and  independent  of  each  other,  some  of 
which  are  within  and  some  beyond  the  authority  of  the  agent,  where 
the  principal  has  the  right  to  adopt  the  former  and  repudiate  the  latter. 
But  in  this  case  the  transaction  was  an  entirety,  viz.,  a  mortgage  to 
secure  a  loan,  and  the  defendants  must  either  adopt  it  as  a  mortgage 
or  repudiate  it  entirely. 

The  fact  that  the  instrument  was  in  form  a  deed  of  conveyance, 
such  as  White  was  authorized  to  take  in  the  purchase  of  land,  is 
wholly  immaterial,  at  least  in  the  absence  of  facts  which  would  eq- 
uitably estop  plaintiff  from  denying  that  it  was  an  absolute  convey- 
ance. No  such  state  of  facts  exists  here.  It  follows  that  the  only 
rights,  if  any,  which  defendants  have  under  the  deed  are  those  of 
mortgagees. 

2.  The  plaintiff,  however,  claims  that  the  defendants  take  it  with  the 
taint  of  usury ;  that  they  have  ratified  the  act  of  White  in  exacting 
usury,  by  omitting  to  disavow  the  contract  within  a  reasonable  time 
after  notice  of  plaintiff's  claim,  aiwl  by  retaining  the  contract,  and 
claiming  title  to  the  land  under  it.j  But  they  never  recognized  it  as 
a  mortgage,  never  treated  the  transaction  as  a  loan,  and  have  never 
received  or  claimed  any  usurious  interest  under  it;  but,  on  llie  con- 
trary, have  always  believed  and  insisted  that  it  was  an  absolute  sale 
and  conveyance  of  the  land  as  it\appeared  on  its  face  to  be,  and  as 
their  agent  asserted  that  it  was.    / 

We  fail  to  see  wherein  they  h^e  ratified  the  act  of  White  in  bar- 
gaining for  a  usurious  rate  of  ii/terest,  or  why,  having  failed  in  main- 
taining their  claim  that  the  deed  was  an  absolute  one,  they  arc  not 
entitled  to  have  it  stand  as  security  for  the  amount  of  their  funds  ac- 
tually loaned  by  White.  Had  they  placed  the  money  in  White's  hands, 
to  be  loaned  at  a  legal  rate  of  interest,  and  he  had,  without  their  au- 
thority or  knowledge,  exacted  and  included  usurious  interest,  they 
could  have  enforced  the  mortgage  for  the  amount  actually  loaned,  and 


/ 


170  Tin;  uKLATioN  (Parti 

lawful  iiitorost,  and  an  attempt  to  do  so  would  not  have  amounted  to 
a  ratification  of  the  act  of  the  agent  in  exacting  usury.  Jordan  v. 
Humphrey.  31  Minn.  495,  18  N.  W.  450.  So  here  while,  as  the  deed 
was  executed  as  a  mortgage,  the  defendants  must  adopt  it,  if  at  all, 
as  a  mortgage,  yet  their  doing  so,  and  availing  themselves  of  it  as 
security  for  the  amount  actually  loaned,  will  not,  of  itself,  amount 
to  a  ratification  of  the  act  of  White  in  exacting  usury.  *  *  * 
■"  Because  the  court  helow  refused  to  permit  plaintiff  to  redeem  and 
have  a  reconveyance  upon  payment  of  the  loan,  with  interest,  the 
cause  was  remanded,  with  directions  to  modify  the  judgment  in 
accordance  with  this  opinion,  allowing  the  plaintiff'  to  redeem  with- 
in such  reasonable  time  as  the  court  may  fix,  and,  upon  his  fail- 
ure to  do  so  within  that  time,  that  he  be  barred  of  all  equity  in 
the  premises,  and  that  the  present  deed  stand  and  operate  as  an  ab- 
solute conveyance.®^ 


(e)  Limitations 

COOLEY  V.  PERRINE. 
(Supreme  Court  of  New  Jersey,  1879.    41  N.  J.  Law,  322,  32  Am.  Rep.  210.) 

Suit  upon  a  note  for  $75,  given  as  part  consideration  on  the  sale  of 
a  horse  to  defendant.  To  this  action  defendant  set  up  as  a  defense 
that  the  horse  was  warranted  sound  at  the  date  of  sale,  and  that  he 
was  not  sound  at  that  time.  The  horse  was  sold  by  one  Woodward, 
an  agent,  who  w^as  not  authorized  by  Cooley  to  make  any  representa- 
tions or  warranties,  nor  did  Cooley  in  his  lifetime,  nor  his  executors, 
who  brought  this  action,  before  the  death  of  the  horse,  know  of  the 
representation  made  by  Woodward.  Upon  exceptions  to  the  instruc- 
tions and  for  failure  to  instruct,  plaintiffs  brought  certiorari. 

Dixon,  J.®*  [After  holding  that  under  the  circumstances  of  this 
case  Woodward  had  neither  implied  nor  incidental  authority  to  war- 
rant the  soundness  of  the  horse:]  *  *  *  Sometimes  it  has  been 
intimated  that  a  distinction  might  be  based  upon  whether  the  war- 
ranty by  the  agent  were  set  up  by  a  plaintiff  to  maintain  a  suit  against 
the  principal,  or  by  a  defendant  to  resist  the  principal's  suit  for  the 
price,  and  that  the  attempt  of  the  principal  to  collect  the  price,  after 
he  has  learned  of  the  warranty,  is  a  ratification  of  it.  On  the  idea  that 
the  authority  does  not  cover  the  warranty,  and  that  the  purchaser  is 
chargeable  with  knowledge  of  the  authority,  it  is  not  plain  how  he  can 
withstand  the  vendor's  claim  on  a  contract  made,  by  alleging  a  contract 

88  See,  also,  Rhouinger  v.  Peabody,  57  Conn.  42,  17  Atl.  278,  14  Am.  St.  Rep. 
88  (1889) ;  Id.,  50  Conn.  .588,  22  Atl.  437  (1890) ;  Eberts  v.  Selover,  44  Mich. 
519,  7  N.  W.  225.  38  Am.  Rep.  278  (1880) ;  Henderhen  v.  Cook,  66  Barb.  21 
(1S66).  But  cf.  I'eters  v.  I'.allistier,  20  Mass.  (3  Pick.)  495  (1826) ;  Gould  v. 
Blodgett,  61  N.  H.  115  (1881). 

8*  Part  of  the  opinion  is  on  page  373. 


^      ^h.4)   W'    >^ 


CREATION    OB^    THE    RELATION 


which  he  knew  was  not  made.  But  if  there  be  anything  at  all  in  the  dis- 
tinction, it  must  be  confined  to  those  cases  where,  when  the  principal 
obtains  knowledge  of  his  agent's  unauthorized  warranty,  the  sale  is  in 
fieri,  or  can  be  declared  void  and  the  parties  restored  to  their  original 
position.  What  the  principal  does  in  pursuance  of  a  bargain  which  he 
has  authorized  his  agent  to  make,  without  knowledge  that  his  agent' 
has  entered  into  an  unwarranted  contract,  is  not  a  ratification  of  such 
contract.  Combs  v.  Scott,  12  Allen,  493 ;  Smith  v.  Tracy,  36  N.  Y. 
79;  Titus  v.  Phillips,  18  N.  J.  Eq.  541;  Gulick  v.  Grover,  11  N.  J. 
Law,  463,  97  Am.  Dec.  728. 

And  if,  when  he  acquires  knowledge,  he  cannot,  in  justice  to  him- 
self, disavow  the  whole  of  his  agent's  contracts,  he  is  entitled  to  stand 
upon  what  he  authorized,  and  repudiate  the  rest ;  the  purchaser,  who 
dealt  with  a  special  agent  without  noting  the  bounds  of  his  power, 
must  sufifer  rather  than  the  innocent  principal.  Bryant  v.  Moore,  26 
Me.  84,  45  Am.  Dec.  96.*^ 

85  In  a  similar  case  the  Maine  court  said:  "But  if  he  had  received  the  goods 
without  knowlcdfxe  that  they  had  been  purchased  at  an  advanced  i)rice,  he 
would  not  be  obliged  to  restore  them,  or  pay  sucli  advanced  price,  if  he  could 
not,  when  informed  of  it,  repudiate  the  baruain  without  suffering  loss.  In 
such  case  he  would  not  be  in  fault.  The  seller  would  be,  and  he  should  bear 
the  loss."     Bryant  v.  Moore,  26  ISIe.  S4,  45  Am.  Dec.  96  (1S46). 

Enforcing  a  contract  of  loan  which  an  agent  had  a  right  to  make  is  not  a 
ratification  of  his  unlawful  and  unauthorized  exaction  of  usury  in  making  the 
loan.  Estevez  v.  Purdy.  f.G  N.  Y.  446  (1876).  See,  also.  Bank  of  St.  Marv'a  v, 
('alder,  3  Slrob.  40:!  (l.S4i»). 

See,  also,  WyckolT.  Seaman  &  Benedict  v.  Davis,  ante,  p.  86,  and  Wheeler 
v.  Northwestern  Sleigh  Co.  (C.  C.)  .39  Fed.  347  (1889).  The  receipt  by  a  prin- 
cipal of  the  fruits  of  an  unauthorized  sale  by  an  agent  Is  not  a  ratification  of 
such  sale,  even  though  the  principal  retains  the  niDuey  after  learning  of  the 
true  .state  of  afiairs,  if  it  appears  that  the  principal  had  no  knowledge  of  the 
sfuirce  of  the  money  when  it  was  received,  and  it  was  applied  to  settle  an  ob- 
ligation of  the  agent  which  existed  prior  to  tiie  making  of  the  uiiautlmrized' 
contract.  IJohart  v.  ()1  erne.  :;<;  Kan.  i:s4,  l.">  I'ac.  ."NN  (1S,S7).  Money  having 
no  earmark  does  not  stand  on  (he  same  ground  as  chattels.  Lime  liock  I'.auk 
v.  riimpton.  17  Pick.  ]."9,  'Js  Am.  Di-c.  L'sC)  (ls:!."»).  jtost,  p.  S03 ;  Thacher  v. 
Pray,  li:'.  Mass.  291,  18  Am.  Kep.  480  (1873).  supra,  p.  117.  As  was  said 
in  a  recent  Missouri  case:  "Money  is  a  current  fund,  which  any  one,  with- 
out notice,  has  a  right  to  receive  in  good  faith  in  payment  of  a  debt,  with- 
out inquiry  into  the  .source  from  wliicli  it  comes;  and  the  per.son  so  receiv- 
ing it  cannot  bo  compelled  to  restore  It  to  him  who  was  the  true  owner. 
.Stephens  v.  P.oard  of  ICducation.  79  X.  Y.  183.  :'..")  Am.  Kep.  fdl;  Hatch  v. 
Hank.  147  .\.  Y.  1.S4.  41  X.  E.  40:{ ;  .Tusth  v.  P.ank.  .".6  X.  Y.  478;  Sinilli  v. 
Bank,  107  Iowa,  OL't).  7S  X.  \V.  2:;s.  p.ut  it  is  .^aid  iiy  plaint  iff  that  defendant 
received  and  kept  the  money  represented  by  tlie  overdraft.  That  fact  does 
not  create  a  liability  against  defendant.  If  money  du(!  a  principal  from  his 
agent  is  obtained  by  sudi  agent  l)y  the  unauthorized  use  of  the  principal's 
name,  and  jiaid  ov<'r  to  the  princii)al,  who  receives  it  in  good  faith,  without 
notice,  lie  is  not  lialde  to  the  iiarty  from  whom  the  agent  got  the  money.  The 
fact  tliat  lie  keeps  the  money  afti-r  being  Informed  of  liow  the  agent  olttained 
it  Is  not  a  ratitication.  'I'haciier  v.  I'ray.  11.3  Mass.  291.  IS  Am.  Kep.  ISO; 
Baldwin  v.  P.urrows,  47  X.  Y.  212;  Culick  v.  (Jrover.  .33  X.  .7.  Law.  46.'!,  97 
Am.  Dec.  7i;s ;  P.oiiart  v.  f)berne,  .'!6  Kan.  2S4,  l.*',  Pac.  ."'.ss ;  Pennsyiv-ania  To. 
v.  Daiidrldge,  8  (Jill  &  .J.  ;!2."..  29  Am.  Dec.  .^.I.'!;  Lime  Hock  P.ank  v.  Pllmitlon. 
17  Pick.  l.")0.  28  Am.  Dec.  286."  ("ase  v.  Ilannnond  Packing  Co.,  !()."»  .Mo.  Api). 
I6S.  79  S.   \V.   7:!2   (1001). 

To  estop  the  iirincijial  to  deny  a  rat  ili(  .'ition.  it  must  appear  that,  at  tbp 
time    lie  ac((|ifeil    tile   iir<iceeds  of  tlie  s.'ije.   be  knew    the  source  of  tlie  money 


172  TiiK  uKLATioN  (Parti 

These  views  are  not  at  all  in  conilict  with  the  class  of  cases  which 
hold  that  the  principal  is  responsihlc  for  the  frand  or  deceit  of  his 
agent,  committed  in  the  course  of  his  employment,  for  his  employer's 
benefit.  Jeffrey  v.  Bigelow,  13  Wend.  518,  28  Am.  Dec.  476;  Sand- 
ford  V.  Handy,  23  Wend.  260;  Barwick  v.  Eng.  Joint  Stock  Bank,  L. 
R.  2  Ex.  259 ;  Mackay  v.  Com.  Bank  of  N.  Brunswick,  L.  R.  5  P.  C. 
394. 

Those  cases  are  well  foumled  upon  the  principle  that,  as  every  man 
is  bound  to  be  honest  in  his  dealings  with  others,  so  is  he  bound  to 
employ  honest  agents,  whether  they  be  general  or  special,  and  if  in 
transacting  his  business,  and  within  the  range  of  their  authority,  they 
be  dishonest,  the  consequences  are  legally  chargeable  to  the  employer, 
and  not  to  a  stranger.    Hern  v.  Nichols,  1  Salk.  289. 

In  the  present  suit,  I  think  that  the  unauthorized  warranty,  inferred 
from  the  honest  statement  of  the  agent  that  the  horse  was  all  right, 
not  communicated  to  the  vendor  or  his  representatives  until  after  the 
horse  was  delivered  to  and  had  died  in  the  possession  of  the  vendee, 
fonned  no  defence  to  the  claim  for  the  price,  and  that  the  appellee's 
prayer  for  instructions  to  the  jury  was  justified  by  the  facts  and  the 
law,  and  should  have  been  granted.  Its  refusal  was  error,  for  which 
the  judgment  should  be  reversed,  with  costs. 

The  cause  may  be  remitted  to  the  Common  Pleas  for  a  new  trial. 


V.  Effect  of  Ratification 

(A)  Retroactiveness 

SOAIMES  v.  SPENCER. 
(Court  of  King's  Bench,  1822.    1  Dowl.  &  R.  32,  24  Rev.  Rep.  631.) 

Assumpsit  on  a  contract  for  the  sale  of  ninety  tons  of  oil  per  ship 
Naiad.  Plea,  the  general  issue,  non-assumpsit.  At  the  trial,  before 
Abbott,  C.  J.,  at  the  Guildhall  sittings,  after  last  term,  the  plaintiff  had 
a  verdict. 

The  case  was  this:  Messrs.  Soames  and  Tennant,  the  plaintiffs, 
were  jointly  interested  in  part  of  the  cargo  of  the  ship  Naiad.  Before 
the  arrival  of  the  vessel,  Soames,  without  the  knowledge  or  authority 
of  Tennant,  sold  the  oil  in  question,  in  which  they  were  jointly  inter- 
he  received,  or  that  when  he  learned  the  facts  he  failed  to  repudiate  the  un 
authorized  contract  of  the  agent.  Holm  v.  Bennett,  43  Neb.  808,  62  N.  W. 
194  (189.5). 

And  the  receipt  from  the  agent  of  a  chattel  which  belonged  to  the  principal 
before  it  was  procured  by  an  unauthorized  act  of  the  agent,  of  which  the  prin- 
cipal was  ignorant  when  he  so  received  it,  is  no  ratification  of  the  agent's  act, 
even  though  the  principal  retains  liis  chattel  after  he  learns  the  facts.  Union 
Gold  Mining  Co.  v.  Rocliy  Mountain  Nat.  Bank,  1  Colo.  531  (1872);  Baldwin 
Fertilizer  Co.  v.  Thompson,  106  Ga.  480,  32  S.  E.  591  (1898). 


OF    THE    BELi^TTON- 


fuAAA 


IMl^  X^^jU^ 


L^:.A.,^f  '    4Tf^  ^^ 


ested,  tor' the  defendants,  through  the  medium  of  Lintot,  a  broker.  The 
only  evidence  of  the  contract  was  the  broker's   note,  signed  by  the^  ^ 

broker,  but  Tennant  was  not  named  in  the  note.  Some  time  after  this, 
Tennant,  hearing  of  the  contract,  wrote  to  the  defendants,  apprizing 
them  that  he  was  jointly  interested  in  the  oil  with  Soames,  that  the 
contract  had  been  entered  into  without  his  knowledge  or  authority, 
and  that  he  considered  himself  released  from,  and  would  not  be  bound 
by  it.  A  communication  then  took  place  between  the  defendants  and 
Tennant,  who  endeavored  to  prevail  upon  them  to  release  him  from  the 
contract,  but  they  declined,  saying  they  would  hold  him  and  the  other 
plaintiff  to  it.  In  consequence  of  this  intimation,  Tennant  acquiesced, 
and  said,  the  oil  "then  must  be  delivered."  All  this  took  place  in  the 
month  of  September,  1819,  before  the  vessel  arrived,  each  party  con- 
sidering himself  bound  by  the  contract.  The  vessel  arrived  in  Janu- 
ary, 1820,  and  then  Lintot,  the  broker,  waited  on  the  plaintiffs  with 
samples.  He  saw  one  of  the  defendants,  to  whom  the  samples  were 
delivered,  and  by  him  accepted.  The  broker  asked  him  if  he  was  in- 
clined to  take  the  remainder  of  the  plaintiff's  share  of  the  Naiad's 
cargo,  but  he  declined.  The  prompt  would  expire  on  the  12th  of  Feb- 
ruary, and  six  or  seven  days  before  then,  the  defendants  refused  to  be 
bound  by  the  contract.  The  learned  Judge  charged  the  jury,  under 
these  circumstances,  that  the  plaintiffs  were  entitled  to  recover,  and 
they  had  a  verdict  accordingly,  with  liberty  to  the  defendants  to  move 
to  enter  a  nonsuit  if  the  Court  should  be  of  opinion,  that  the  contract 
declared  upon  was  not  binding. 

Abbott,  C.  J.  I  am  of  opinion,  that  the  verdict  in  this  case  was 
right.  The  case  turns  upon  the  question,  whether  the  original  con- 
tract was  ratified  by  Tennant.  He  was  no  party  to  it  at  first,  and,  in 
fact,  afterwards  repudiated  it,  but  in  the  result  he  assents  to  it,  and 
says— "then  the  oil  must  be  delivered."  It  is  then  understood  by  all 
parties  that  it  is  to  be  a  binding  contract.  This  is  in  the  month  of 
September.  In  January  the  oil  arrives,  and  then  the  defendants,  act- 
ing upon  the  contract,  take  samples,  and  it  is  not  until  the  very  last 
moment,  when  the  prompt  is  about  to  expire,  that  they  make  any  ob- 
jection.   The  jury  asked  me,/whether,  in  point  of  law,  they  might  find 

a  verdict  for  the  plaintiffs.     I  said,  that  in  my  opinion,  a  subsequent  I 

ratification  of  a  contract  is  (^nuivalent  to  a  prior  authority ;   and  I  told     y  A /Jyf 
them,  that  if  they  thought  Tennant  did  ratify  the  contract,  and  that     /\j\ri/* 
with  the  knowledge  of  the  defendants,  and  they  acceded  to  it,  it  was 
too  late  for  thcn\  to  say,  at  any  after  time,  that  they  were  not  bound 
by  tlic  contract.    [That  is  the  way  I  left  the  case  to  the  jury.     They 
found  for  the  plaintiffs,  and  I  think  tiicy  came  to  a  just  conclusion. 

Baym;y,  J.  I'am  of  the  same  opinion.  The  broker's  note  is,  wilii- 
in  the  statute  of  frauds,  evidence  of  a  written  contract.  The  original 
authority  to  sell  need  not  be  in  writing,  and  if  Tennant  subse<|uently 
ratified  the  contract  entered  into  by  assenting  to  it,  it  became  a  bindmg 
contract. 


f 


174  Tin:  kiolation  (Part  1 

lloi.ROYD,  J.  Ill  this  case,  act'tM-dinq  to  the  evidence,  there  was  a 
subsequent  ratification  hy  Tcnnant  of  ihc  original  contract,  and,  I 
think,  that  is  snfiicicnt  lo  give  it  vahiHty  tlunigh  originally  made  with- 
out his  authority.  His  sul)se(|uent  ratification  amounts  to  an  original 
authority;  and  the  maxim  of  the  law  is:  "Onuie  actum  ab  agentis  m- 
lentione  est  jutlicandum." 

Rule  refused. 


MACLEAN  V.  DUNN. 

(Court  of  Common  Pleas,  1S2S.    4  Bingham,  722,  1.3  E.  C.  L.  712.) 

One  Ebsworth,  a  London  wool  broker,  sold  for  the  account  of  plain- 
tiff Russian  and  German  wool  to  defendant,  and  in  turn  bought  from 
defendants  for  plaintiff  Spanish  wool,  giving  bought  and  sold  notes 
therefor.  The  notes  were  not  signed  by  Dunn,  but  there  was  evidence 
that  he  afterwards  orally  ratified  the  act  of  the  other  defendant,  Wat- 
kins,  in  authorizing  Ebsworth  to  make  the  contract.  Maclean  now 
brings  special  assumpsit  for  not  accepting  and  paying  for  the  Russian 
and  German  wool.  Verdict  for  plaintiff  and  defendant  obtained  a 
rule  nisi  to  ente«r  a  non-suit  or  have  a  new  trial. 

Best,  C.  J.***  It  has  been  argued,  that  the  subsequent  adoption  of 
the  contract  by  Dunn  will  not  take  this  case  out  of  the  operation  of  the 
statute  of  frauds ;  and  it  has  been  insisted,  that  the  agent  should  have 
his  authority  at  the  time  the  contract  is  entered  into.  If  such  had  been 
the  intention  of  the  legislature,  it  would  have  been  expressed  more 
clearly ;  but  the  statute  only  requires  some  note  or  memorandum  in 
writing,  to  be  signed  by  the  party  to  be  charged,  or  his  agent  thereunto 
lawfully  authorized ;  leaving  us  to  the  rules  of  common  law,  as  to  the 
mode  in  which  the  agent  is  to  receive  his  authority.  Now,  in  all  other 
cases,  a  subsequent  sanction  is  considered  the  same  thing  in  effect  as 
assent  at  the  time.  "Omnis  ratihabitio  retrotrahitur  et  mandato  sequi- 
paratur."  And  in  my  opinion,  the  subseciuent  sanction  of  a  contract 
signed  by  an  agent,  takes  it  out  of  the  operation  of  the  statute  more 
satisfactorily  than  an  authority  given  beforehand.  Where  the  author- 
ity is  given  beforehand,  the  party  must  trust  to  his  agent;  if  it  be 
given  subsequently  to  the  contract,  the  party 'knows  that  all  has  been 
done  according  to  his  wishes.  But  in  Kinnitz  v.  Surry,  where  the 
broker,  who  signed  the  broker's  note  upon  a  sale  of  corn,  was  the  sell- 
er's agent.  Lord  Ellenborough  held,  that  if  the  buyer  acted  upon  the 
note,  that  was  such  an  adoption  of  his  agency  as  made  his  note  suffi- 
cient within  the  statute  of  frauds ;  and  in  Soames  v.  Spencer,  1  Dow. 
&  Ry.  2)2,  where  A.  and  B.,  being  jointly  interested  in  a  quantity  of 
oil,  A.  entered  into  a  contract  for  the  sale  of  it,  without  the  authority 
or  knowledge  of  B.,  who,  upon  receiving  information  of  the  circum- 

88  Part  of  the  opinion  is  omitted. 


\l[kiU  /wt'iA^^  -^ 


ijn^y^\Jf-^^ 


Ch.  4)  "   CREATION  OF  THE  RELATION  175 

stance,  refused  to  be  bound,  but  afterwards  assented  by  parol,  and 
samples  were  delivered  to  the  vendees,  it  was  held,  in  an  action  against 
the  vendees,  that  B.'s  subsequent  ratification  of  the  contract  rendered 
it  binding,  and  that  it  was  to  be  considered  as  a  contract  in  w-riting 
within  the  statute  of  frauds.  That  is  an  express  decision  on  the  point, 
that  under  the  statute  of  frauds  the  ratification  of  the  principal  re- 
lates back  to  the  time  when  the  agent  made  the  contract.  *  *  * 
Rule  discharged. 


X 


TOWN  OF  ANSONIA  v.  COOPER. 

(Supreme  Court  of  Errors  of  Connecticut,  1S94.     64  Coun.  536,  .30  Atl.  760.) 

Interpleader  among  the  claimants  of  a  fund  paid  into  court  by  the 
town  of  Ansonia  for  land  taken  for  a  school  site.  To  the  answer  and 
claim  of  Henry  Ailing,  Elizabeth  Downs  demurred,  and  the  court  sus- 
tained the  demurrer.  Chas.  Cooper  had  owned  the  land.  On  his  / 
death  he  left  it  to  his  widow  for  life.  She  sold  the  fee  and  gave  a 
warranty  deed  under  which  Ailing  claimed.  On  her  death  her  four 
sons  divided  the  unused  balance  of  the  purchase  price  and  the  other 
personal  property  left  by  their  father,  under  a  verbal  agreement  to  ac- 
cept such  amounts  as  complete  distribution  and  settlement  of  their 
claims  under  his  will.  Three  sons  quitclaimed  to  Ailing.  The  fourth 
son,  Alfred  Cooper,  after  the  beginning  of  these  proceedings,  assigned 
his  claims  to  Elizabeth  Downs. 

Andrews,  C.  J.®^  *  *  *  'pl-,^  ^^^^^  Alfred  Cooper  knew  when 
he  made  said  agreement  and  received  said  money  that  the  amount  he 
received  under  and  i)ursuant  to  the  said  agreement  was  the  money 
which  the  said  Elizabeth  Cooper  received  from  the  sale  of  the  said 
real  estate  conveyed  by  her,  the  said  Elizabeth  Cooper,  as  aforesaid, 
and  he  had  full  knowledge  that  the  said  real  estate  had  been  sold  and 
conveyed  by  full  warranty  deed,  and  that  the  said  Henry  G.  Ailing 
was  then  in  the  possession  of  said  land,  claiming  title  thereto  by  virtue 
of  the  deed  which  had  been  given  b)-  the  said  iClizabeth  Cooper  as 
aforesaid. 

These  facts,  being  admitted  by  the  demurrer,  must,  for  the  purposes 
of  the  present  discussion,  l>e  taken  as  ])rovcd  and  found  by  the  court. 
Charles  Cooper,  W'ilham  Cooper,  and  Henry  Cooper  may  be  laid  out 
of  the  case.  They  have  each  released  to  Mr.  Ailing.  'I'he  rights  of 
Elizabeth  Downs  are  just  the  same  as,  and  no  greater  than,  tlie  rights 
of  Alfred  Cooper.  Her  assignment  from  him  was  since  the  commence- 
ment of  the  condemnation  proceedings. 

I'eforc  the  Superior  Court,  the  ])arties  seemed  to  have  (h'scussed  onl\- 
the  question  of  estoppel,  'i'hc  court,  in  its  memorandum  of  decision. 
I)iaced  its  conclusioji  on  the  ground  that  there  was  no  estoppel.     The 

'••   I';irl  of  flir  ..|,iiil..ii   is  ixiiittofl. 


^Lt 


17(!  TiiK  RELATION  (Parti 

briefs  in  this  court  are  largely  made  up  of  the  same  discussion.  If 
that  was  the  only  question  in  the  case,  we  might  be  led  to  agree  with 
the  Superior  Court.  P>ut  estoppel  is  not  the  doctrine  of  the  case.  There 
is  another  ground  clearly  set  forth  in  the  answer  of  Mr.  Ailing,  on 
which  it  seems  to  us  the  answer  should  have  been  held  sufificieni,  and 
the  demurrer  overruled.  And  that  ground  is  that  Alfred  Coopci  has 
ratified  the  sale  of  his  land  made  by  his  mother.  The  language  oi  the 
answer  is  explicit :  That  Alfred  Cooper  and  his  brothers  received  said 
sum  of  money  in  lieu  and  in  place  of  the  real  estate  which  had  been 
devised  to  them  by  their  father,  but  had  been  sold  by  their  mother, 
and  said  parties  intended,  by  the  division  of  said  money  among  them, 
to  ratify  and  confirm  the  sale  of  said  real  estate  by  the  said  Elizabeth 
Cooper.  And  the  said  Alfred  Cooper  knew  when  he  received  said 
money  that  the  amount  which  he  received  was  the  money  which  the 
said  Elizabeth  Cooper  had  received  from  the  sale  of  the  said  real 
estate,  and  he  had  full  knowledge  that  the  said  real  estate  had  been 
sold  and  conveyed  by  a  full  warranty  deed. 

This  is,  then,  the  condition  of  things :  Mrs.  Elizabeth  Cooper,  without 
authority  to  do  so,  sold  and  undertook  to  convey  land  which  belonged 
to  Alfred  Cooper.  She  received  the  full  value  of  the  land  in  money. 
Her  grantee  entered  into  possession  of  the  land  conveyed,  and  claims 
to  have  a  complete  title  thereto.  Alfred  Cooper,  knowing  all  these 
facts,  and  intending  to  ratify  and  confirm  the  sale  of  his  said  land,  has 
received  that  money  and  applied  it  to  his  own  use,  and  still  keeps  it. 
Ratification  means  the  adoption  by  a  person,  as  binding  upon  himself, 
of  an  act  done  in  such  relations  that  he  may  claim  it  as  done  for  his 
benefit,  although  done  under  such  circumstances  as  would  not  bind 
him,  except  for  his  subsequent  assent,  as  where  an  act  was  done  by 
a  stranger  having  at  the  time  no  authority  to  act  as  his  agent,  or  by  an 
agent  not  having  adequate  authority.  The  acceptance  of  the  results  of 
the  act  with  an  intent  to  ratify,  and  with  full  knowledge  of  all  the 
material  circumstances,  is  a  ratification.  Ratification  makes  the  con- 
tract, in  all  respects,  what  it  would  have  been  if  the  requisite  power 
had  existed  when  it  was  entered  into.  It  relates  back  to  the  execution 
of  the  contract,  and  renders  it  obligatory  from  the  outset.^^  The 
party  ratifying  becomes  a  party  to  the  contract,  and  is,  on  the  one 
hand,  entitled  to  all  its  benefits,  and  on  the  other,  is  bound  by  its 
terms.  Negley  v.  Lindsay,  67  Pa.  217,  5  Am.  Rep.  427;  Edwards  v. 
Railroad  Co.,  1  Mylne  &  C.  650-672 ;  And.  Law  Diet,  in  verb. ;  Stan- 
ton v.  Railroad  Co.,  59  Conn.  285,  22  Atl.  300,  21  Am.  St.  Rep.  110. 

88  See,  also,  Johnson  v.  Smith,  21  Conn.  627  (1852),  quoting  from  Story  on 
Agency,  §  244,  and  Grant  v.  Beard,  50  N.  H.  129  (1870),  ante,  p.  125. 

••SubseQueut  ratification  has  a  retrospective  effect,  and  is  equivalent  to  a 
prior  couiuiaud.  To  say  that  an  agent  entered  into  a  contract  without  author- 
ity from  his  principal,  and  that  tlie  principal  sul)sequently  ratified  such  con- 
tract, is  in  legal  intendment  and  effect  the  equivalent  of  saying  the  agent  was 
duly  autliorized  to  malie  the  contract  Kraft  v.  Wilson,  104  Cal.  xvii,  37  Pac. 
790  (1S94). 


Ch.  4)  CREATION  OF  THE  RELATION  177 

Alfred  Cooper,  having  ratified  the  sale  of  his  land  by  his  mother, 
and  now,  through  his  assignee,  seeking  to  obtain  the  money  in  the 
hands  of  this  court,  is  in  the  position  of  one  who  has  verbally  con- 
tracted to  convey  his  land  to  another,  has  put  that  other  into  posses- 
sion, has  received  his  pay  in  full  in  money,  and,  while  keeping  the 
money,  is  trying  to  get  the  price  of  his  land  the  second  time.  It  needs 
no  argument — or,  rather,  the  statement  of  the  case  is  the  strongest 
possible  argument — to  show  that  he  ought  not  to  succeed.  And,  as  he 
cannot  succeed,  so  also  his  assignee,  Elizabeth  Downs,  cannot.  There 
is  error.    The  demurrer  should  be  overruled. 

The  judgment  sustaining  the  demurrer  is  reversed.  The  other 
judges  concurred. 


(Circuit  CcSuAfof/the  l&ited  States,  Northern  District  of  Iowa,  1884.'^/^      y  ^^*C< 

'WU  :{A/'.;-  r  20  F.  ^^^j^^  ^,  ■ '   /U>i^  . 

Shiil^s,  J.    On  the  trial  of  thi^  cause  before  a  jury,  it  appeared  that  t_       j 
the  plaintiffs  were- wholesale  liqiior  dealers,  residing  and  doing  busi-*   ^^fylj  /-/ 
ness  in  Chicago,  Illinois,  and  the  defendants  were  druggists,  residing  ^^^flJi,J 

and  doing  business  in  Dubuque,  Iowa.     The  action  was  based  upon  .^  >>^  ^*^' 

acceptances  of  defendants,  and  upon  an  open  account.     The  defend-    /^^#^      jf     / 
ants  pleaded  that  the  acceptances,  as  well  as  the  account,  were  for  f^  ^^^^l// 

intoxicating  liquors  sold  in  violation  of  the  statute  of  Iowa,  commonly  -^t^t ^   /         ^^ 
known  as  the  prohibitory  liquor  law.     On  the  part  of  the  defendants  , '  /  v* 

it  was  claimed  that  the  liquors  were  sold  in  pursuance  of  a  contract  "-'.;         y 
entered  into  between  one  Connors,  an  agent  of  plaintiffs,  and  the  de-        ^^^^"///i 
fendants,  at  Dubuque,  Iowa,  by  which  it  was  agreed  that  plaintiffs  wer^  ")/  ^       \1-  l^f^ 
to  furnish  to  defendants,  from  time  to  time,  various  kinds  of  liquork"^^^  ' 

at  certain  prices,  and  put  up  in  packages  to  suit  the  market.     On  the      ^^ A  •  / 

part  of  plaintiffs  it  was  denied  that  Connors  made  any  such  agreement,  ' 

and,  further,  that  if  he  did  he  had  no  authority  to  make  any  contract    •   ,    <.  '^ 

for  plaintiffs,  he  being  merely  a  traveling  agent,  with  power  to  solicit  y^L* 

trade  and  orders,  which  were  to  be  forwarded  to  Chicago  for  approval '"^     ^     ^^ 
or  disapproval  by  plaintiffs.     The  evidence  showed  that  the  linuors"  ejfjLt^^ 
were  furnished  by  plaintiffs  upon  the  orders  of  defendants,  two  of   .  ^c   . 

which  were  given  to  Connors  in  person  when  at  Dubufjue,  and   the 
others  were  by  letters  directed  to  plaintiffs,  the  goods  being  delivered        '  ,       ^    , 
to  the  railroad  company  at  Chicago.  ^   ^"^"^^^ 

The  court  instructed  the  jury  that  if  the  agent.  Connors,  had  au-  K/^  ^^9 

thority  to  make  a  comjiletcd  contract  of  sale,  and  did  in  fact  make  a       ^ ,  t^^ 

contract  at  Dubuque,  under  which  tiie  liquors  in  question  wore  fur-^]^  ^     t 

nishcd,  then  the  sale  was  a  violation  of  the  statute  of   Iowa,  it  not  *X>>       r    '      ^* 
being  questioned  that  the  lifjuors  were  intoxicating,  and  intended  to  l)c      ^^'^^• 
used  as  a  beverage.     See  Second  Xat.  Bank  v.  Currcn,  36  Iowa,  Sbb: 

GoOD.l'B.&  A. — 12  ^  L 


V 

\ 


ITS  TiiK  uKLA'iioN  (Parti 

Taylor  v.  Pickett.  52  Iowa.  4(.7.  3  N.  W.  514.  The  jury  was  further 
instructeil  that  it  the  ageut.  Couuors,  merely  procured  or  arranged  for 
the  forwarding  of  orders  from  time  to  time  hy  defendants,  which 
orders,  when  received  by  plaintitTs,  were  subject  to  their  approval  or 
disapproval,  and  which  they  were  under  nt)  obligation  to  fill  unless 
approved,  then  the  sale  would  be  deemed  to  be  a  sale  made  in  Illinois. 
See  Tegler  v.  Shipman,  35  Iowa,  1*H,  11  Am.  Rep.  118.  The  court 
also  ruled  that  if  Connors,  not  having  authority  to  make  a  completed 
contract  of  sale  on  behalf  of  plaintiffs,  nevertheless  did  in  form  enter 
into  a  contract  at  Dubuque  with  defendants,  whereby  he  assumed  to 
bind  plaintiffs  for  the  future  delivery  of  liquors  in  quantities  to  be 
fixed  by  defendants,  w'hich  contract  was  not  binding  upon  plaintiffs  by 
reason  of  the  want  of  authority  on  the  part  of  Connors,  and  the  plain- 
tiff's approved  or  ratified  the  contract-  by  forwarding  the  goods  from 
time  to  time  to  defendants  as  ordered  by  them,  the  act  of  afffrmance 
wdiich  gave  binding  force  to  the  contract  being  done  in  Chicago,  the 
contract  will  be  deemed  to  be  made  in  Chicago,  and  being  valid  there 
would  be  enforced  in  Iowa,  unless  it  was  shown  that  the  sale  was  made 
with  intent  to  enable  defendants  to  violate  the  laws  of  Iowa. 

The  jury  found  a  verdict  for  plaintiffs,  and  defendants  move  for  a 
new  trial,  on  the  ground  that  there  was  error  in  the  ruling  of  the  court 
upon  the  last  point  named. 

•'^On  the  part  of  the  defendants  it  is  claimed  that  the  act  of  ratifica- 
tion has  relation  back  to  the  time,  place,  and  circumstance  when  and 
where  the  terms  of  the  proposed  contract  were  arranged  between  the 
agent  and  the  defendants,  and  supplied  the  authority  then  wanting, 
thereby  rendering  the  contract  as  binding  as  though  the  agent  original- 
ly possessed  the  authority  to  make  it.  In  support  of  this  proposition, 
counsel  cite  the  cases  of  Beidman  v.  Goodell,  56  Iowa,  592,  9  N.  W. 
900;  Eadie  v.  Ashbaugh,  44  Iowa,  519;  Lowry  v.  Harris,  12  Minn. 
255  (Gil.  166);  Hankins  v.  Baker,  46  N.  Y.  670;  Moss  v.  Rossie  Lead 
Co.,  5  Hill,  137;  Forsyth  v.  Day,  46  Me.  176;  and  Story,  Ag.  §  244,— 
all  of  which  recognize  and  enforce  the  general  rule  as  given  by  Story, 
that :  "A  ratification,  also,  when  fairly  made,  will  have  the  same  effect 
as  an  original  authority  has,  to  bind  a  principal,  not  only  in  regard  to 
the  agent  himself,  but  in  regard  to  third  persons.  ^:  *  *  j^i  short, 
the  act  is  treated  throughout  as  if  it  were  originally  authorized  by  the 
principal,  for  the  ratification  relates  back  to  the  time  of  the  inception 
of  the  transaction,  and  has  a  complete  retroactive  efficacy."  *" 

That  this  is  the  general  and  the  correct  rule  to  be  applied  to  cases  re- 
quiring the  construction  and  application  of  the  contract  to  its  subject- 
matter,  for  the  purpose  of  ascertaining  and  protecting  the  rights  of 
the  parties  thereto,  cannot  be  questioned,  as  it  is  sustained  by  author- 
ities without  number;  but  the  point  now  presented   is   whether  this 

89  Upon  ratification  the  principal  takes  the  contract  a.s  it  was  made,  not  as 
it  mij^^ht  have  been  or  ought  to  have  been  made.  Drennan's  Adm'r  v.  Walker, 
21  Ark.  .539  (1860) ;    .Johnson  v.  Hoover,  72  Ind.  .39.5  (1S80). 


u 


Ch.  4)  CREATION  OF  THE  RELATION  179 

rule  is  properly  applicable  to  the  question  involved  in  the  instruction 
given  to  the  jury  and  excepted  to  by  defendants.  In  the  case  at  bar 
the  court  is  not  called  upon  to  determine  the  rights  of  the  parties  as 
defined  by  the  terms  of  the  contract  itself.  The  defendants  are  not 
asserting,  as  against  the  plaintiffs,  any  rights  or  benefits  conferred 
upon  them  by  the  express  provisions  of  the  contract  itself.  On  the 
contrary,  their  defense  is  that  the  contract  is  not  binding  upon  them, 
and  never  took  effect,  because  it  is,  as  they  allege,  illegal  and  void,  in 
that  it  was  made  in  Iowa  in  violation  of  the  statutes  of  this  state. 

The  defendants,  having  received  all  the  benefits  conferred  upon  them 
by  the  contract,  are  now  seeking  to  defeat  its  enforcement,  not  upon 
any  question  arising  on  the  terms  of  the  contract,  but  upon  the  ground 
that,  at  the  time  and  place  the  contract  was  made,  it  was  invalid  and 
void.  Upon  such  an  issue,  is  there  any  reason  why  the  court  shall 
not  ascertain  the  very  facts  of  the  case  and  decide  accordingly?  Is 
there  any  reason  why  the  plaintiff's  are  estopped  from  proving  the 
exact  truth  of  the  transaction?  The  point  of  inquiry  is,  when  and 
where  was  the  contract  of  sale  entered  into?  "A  contract  is  an  agree- 
ment in  which  a  party  undertakes  to  do,  or  not  to  do,  a  particular 
thing."  Sturges  v.  Crowninshield.  4  Wheat.  197,  4  L.  Ed.  529.  A 
contract  does  not  become  such  until  the  minds  of  the  contracting  par- 
ties meet. 

When  and  where  did  tlie  plaintiffs  agree  to  sell  the  liquors  in  ques- 
tion to  the  defendants?  Connors  certainly  did  not  make  or  complete 
a  contract  with  defendants,  for  it  is  admitted,  in  the  aspect  of  the 
case  now  under  consideration,  that  he  had  no  authority  to  make  a 
contract  or  to  bind  plaintiffs.  The  utmost  that  can  be  said  is  that 
he,  not  having  authority  to  make  a  contract,  undertook  to  agree  upon 
the  terms  of  sale,  which  did  not.  however,  bind  plaintiffs  until  they 
had  given  their  assent  thereto.  The  contract  was  made  when  ])lain- 
tiffs,  by  approval,  acceptance,  or  ratification,  assented  thereto.  Then, 
in  fact,  for  the  first  time,  did  the  minds  of  the  contracting  parties 
meet,  and  thereby  render  binding  and  obligatory  that  which  before 
was,  in  effect,  only  a  proposition  for  a  contract.  The  rule  is  well  set- 
tled that  where  orders  are  given  for  the  i)urchase  of  goods  to  an  agent 
who  has  not  authority  to  sell,  but  which  are  forwarded  to  the  prin- 
cipal for  his  apjiroval,  the  contract  is  deemed  to  be  made  at  the  place 
of  ai)proval.  Tegler  v.  vShipman,  3.S  Iowa.  194,  11  Am.  Rep.  118; 
Taylor  v.  I'ickett,  52  Iowa.  46*),  3  X.  \V.  514.  The  j)rinciple  recog- 
nized in  these  cases  is  applicable  to  the  (jucslion  presented  in  the  case 
under  consideration,  and  no  good  reason  is  perceived  for  making  a  dis- 
tinction in  the  rule  to  be  applied. 

The  same  doctrine  is  enforced  in  cases  of  contracts  cntcriMl  iiUo  on 
Sunday,  where,  by  the  law  of  the  state,  such  a  contract  would  be  void. 
A  ratification  thereof  on  a  week-day  is  held  go<Ml.  Thus,  in  Harrison 
v.  Collon.  31  Iowa,  16.  the  supreme  court  of  Iowa  cite  approvingly 
the  rule  given  in  Story.  Cont.  §  61'',  "that  ;iny  ratification  of  a  contract 


f 


fM^ 


l>\ 


^ 


180  THE  UELATION  (Parti 

on  a  week-day,  such  as  a  new  promise  to  pay,  a  refusal  to  rescind  on 
demand  made,  a  partial  payment,  and  the  like,  would  render  the  con- 
tract binding,  though  originally  made  on  Sunday."  If  the  ratifica- 
tion of  a  contract  nuist,  under  all  circumstances,  be  held  to  revert 
back  to  the  time  ami  i^lace  of  its  inception,  and  only  that  effect  can  be 
given  to  it,  it  would  follow  that  a  Sunday  contract  could  not  be  ratified 
on  a  week-day,  because,  if  that  were  the  rule,  the  ratification  must  be 
held  to  have  taken  effect  at  the  time  the  original  contract  was  entered 
into,  and  a  ratification  taking  effect  on  Sunday  would  be  open  to  the 
same  objection  that  invalidated  the  original  contract.  The  ratification 
is  held  good,  however,  because  it  takes  effect  on  a  week-day,  and  the 
courts  recognize  that  fact,  and,  in  consequence  thereof,  give  effect  to 
the  contract  originally  void. 

The  true  rule  is  that  when  the  question  involves  the  validity  of  the 
f  contract,  as  such,  the  court  may  consider  the  very  time  and  place  where 
and  when  the  act  was  done  that  gave  life  to  the  contract.  ,  In  the  case 
at  bar  this  act  took  place  in  Chicago,  and  the  contract  myki  be  held  to 
have  been  made  at  that  place,  and  not  in  Dubuque,-^'' Consequently, 
there  was  no  error  in  the  instructions  given  to  the  jury  upon  this  point, 
and  the  motion  for  new  trial  must  be  overruled. 


GRAHAM  V.  WILLIAMS, 

(Supreme  Court  of  Georgia,  1901.     114  Ga.  716,  40  S.  E.  790.) 

Simmons,  C.  J.  An  equitable  petition  was  filed  by  Graham  against 
Williams  and  others.  It  alleged  that  he  had  title  to  a  certain  lot  of  land 
fV"^  in  Appling  county,  and  that  the  defendants,  claiming  the  land  under 
some  pretended  title  which  they  had  failed  to  record,  had  entered  upon 
the  land,  and  committed  trespass  by  cutting  timber  and  boxing  the 
trees  for  turpentine.  The  petition  set  out  a  chain  of  title,  and  alleged 
that  the  plaintiff  and  defendants  claimed  under  a  named  common  gran- 
tor. The  defendants  admitted  that  they  claimed  under  the  common 
grantor  named  in  the  petition,  and  alleged  that  they  had  title  to  the 
land.  The  petition  alleged  that  the  plaintiff's  immediate  grantor  was 
one  Einstein,  who  conveyed  the  land  to  plaintiff  in  1892.  The  plain- 
tiff prayed  for  an  injunction  to  restrain  the  defendants  from  commit- 
ting any  further  trespass,  for  a  cancellation  of  the  defendants'  deeds, 
and  for  damages  for  the  trespass. 

At  the  trial  of  the  case  he  introduced  in  evidence  deeds  commencing 
with  that  from  the  common  grantor,  and  closed  his  evidence  with  a 
deed  purporting  to  have  been  made  by  an  attorney  in  fact  of  Einstein, 
plaintiff's  immediate  grantor,  and  a  deed  from  Einstein  himself  to  the 
plaintiff,  made  and  executed  after  the  commencement  of  the  suit.  In 
this  last  deed  Einstein,  after  reciting,  in  substance,  that  the  power  of 
attorney  given  his  attorney  in  fact  was  not  sufficiently  comprehensive 


.^> 


Ch.  4)  CREATION  OF  THE  RELATION  181 

in  its  terms  to  authorize  the  attorney  in  fact  to  sell  and  convey  this 
tract  of  land  fully  ratified  and  confirmed  the  deed  made  by  the  said 
attorney,  and  conveyed  the  land  to  Graham.  The  record  does  not  dis- 
close that  Graham  was,  or  ever  had  been,  in  possession  of  the  land. 
At  the  close  of  the  plaintiff's  evidence  the  court,  on  motion,  granted  a 
nonsuit  upon  the  ground  that  the  evidence  showed  that  at  the  com- 
mencement of  the  action  by  the  plaintiff  he  did  not  have  sufficient  title 
to  authorize  a  recovery.  Graham  excepted,  and  brought  the  case  here 
for  review. 

1.  Under  the  above  facts  the  sole  question  to  be  determined  is  wheth- 
er the  deed  of  ratification  made  by  Einstein  after  the  commencement 
of  the  suit  related  back  to  the  execution  of  the  deed  by  the  attorney 
in  fact,  so  as  to  authorize  the  plaintiff  to  recover  against  the  defend- 
ants. It  was  contended  in  the  brief  of  counsel  for  the  plaintiff  in  error 
that  the  ratification  by  Einstein  of  the  act  of  his  agent  related  back  to 
the  time  of  the  execution  and  delivery  of  the  agent's  deed  to  the  plain- 
tiff, although  the  power  of  attorney  given  the  agent  did  not  authorize 
him  to  convey  this  land.  There  is  no  doubt  that  the  contention  of  the 
plaintiff's  counsel  embodies  a  rule  which  is  generally  true.  Generally 
the  ratification  of  an  unauthorized  act  by  an  agent  relates  back  and 
becomes  the  act  of  the  principal  as  of  the  time  when  the  unauthorized 
act  was  performed.  While  this  is  generally  true,  there  is  an  exception 
to  the  rule,  which  is  that  such  a  ratification  does  not  so  relate  back  as 
to  aft'ect  the  rights  of  other  parties  which  have  intervened  and  accrued 
between  the  time  of  the  unauthorized  act  and  that  of  the  ratification. 
Mechem,  Ag.  §  168 ;  Story,  Ag.  (9th  Ed.)  §  245 ;  Whart.  Ag.  §  17 ; 
Evans  v.  Coleman,  101  Ga.  152,  28  S.  E.  645.  These  authorities,  and 
the  decisions  which  they  cite,  all  hold  that,  when  rights  of  third  par- 
ties have  intervened  between  the  unauthorized  act  and  its  ratification, 
the  latter  does  not  relate  back  so  as  to  affect  those  rights.  If  such 
were  not  the  rule,  Einstein  might  have  conveyed  this  land  to  a  third 
person  subsequently  to  the  unauthorized  deed  by  his  agent,  and  there- 
after, by  ratifying  and  confirming  the  agent's  act,  defeated  the  rights 
of  the  person  to  whom  he  had  himself  conveyed  the  land. 

2.  Having  established  that  there  is  an  exception  of  this  nature  to  the 
general  rule,  it  remains  only  to  determine  whether  the  defendants  had 
in  the  present  case  acquired  such  rights  as  would  come  within  the  ex- 
ception. \In  the  first  place,  it  is  a  well-established  rule  that  a  plaintiff 
must  recoWr  upon  Yacts  as  they  existed  at  the  time  of  the  commence- 
ment of  the  action.!  Those  facts  constitute  his  cause  of  action.  If 
new  and  additional  lacts  arise  after  the  commencement  of  the  suit,  he 
cannot  rely  upon  t]/cm  as  ground  for  a  recovery.  If  the  facts  upon 
which  his  suit  is  predicated  arc  insufficient  to  authorize  a  recovery  by 
him,  the  defendants  have  a  legal  right  to  ask  the  court  for  a  nonsuit, 
and,  under  the  law,  the  court  would  be  compelled  to  grant  it.  In  the 
present  case  the  plaintiff  virtually  admitted,  by  putting  in  evidence  the 
deed  of  ratification,  that  his  title  was  not  sufficient,  at  the  time  suit 


? 


182  Tin;  KKLATioN  (Patt  1 

was  brought,  to  have  sustaiiKHl  a  rooovery ;  for  the  deed  of  ratification 
states,  in  substance,  that  the  power  o\  alttMuev  made  by  Kinstein  to 
his  agent  was  not  broad  eiunigh  to  authorize  the  agent  to  convey  the 
land.  The  defendants  had  the  ri.i;ht.  under  the  facts  as  they  stood  at 
the  time  suit  was  commenced,  to  have  a  nonsuit.  Tliey  had  the  right 
to  have  the  case  tried  upon  the  facts  as  they  existed  at  the  time  of  the 
commencement  of  the  suit.  The  plaintiff  had  no  right  to  interject 
what  might  be  called  a  new  party,  Einstein,  and  a  new  title  originating 
after  the  commencement  of  the  suit. 

In  the  case  of  \\'ittenbrock  v.  Bellmer.  37  Cal.  12.  it  appeared  that 
the  president  of  a  building  and  loan  association  had,  without  authority, 
transferred  a  note  and  mortgage  to  Wittenbrock,  who  commenced  pro- 
ceedings to  foreclose  the  mortgage.  After  the  action  had  been  pending 
for  several  months,  the  trustees  of  the  association  ratified  the  previous 
action  of  its  president  in  the  premises.  The  court  said:  "We  are 
unable  to  discover  any  principle  upon  which  the  defendant's  rights  could 
be  affected  by  such  ratification.  Conceding  that  at  the  date  of  the  com- 
mencement of  the  action  the  plaintiff  had  no  cause  of  action,  it  does 
not  seem  to  us  that  he  could  maintain  the  action  upon  a  cause  of  action 
subsequently  acquired  against  the  defendant.  The  case  was  at  issue, 
and,  if  it  had  been  tried  at  any  time  prior  to  the  date  of  the  ratifica- 
tion, the  judgment  must  have  been  for  the  defendant.  Could  a  stran- 
ger to  the  action  step  in  at  any  time  before  the  trial,  and  deprive  the 
defendant  of  that  right  by  placing  in  the  hands  of  his  adversary  an 
instrument  upon  which  he  might  have  maintained  an  action,  or  one 
which  he  alleged  that  he  had,  but  in  fact  did  not  have,  when  he  com- 
menced the  action?  Clearly  not.  If  a  party  has  no  cause  of  action 
at  the  time  of  the  institution  of  his  action,  he  cannot  maintain  it  by 
filing  a  supplemental  complaint  founded  upon  matters  which  have 
subsequently  occurred."  Similar  rulings  were  made  by  the  same  court 
in  Taylor  v.  Robinson,  14  Cal.  396,  and  McCracken  v.  City  of  San 
Francisco,  16  Cal.  624.  In  61  Am.  Dec.  88,  Mr.  Freeman,  in  his  notes 
to  Persons  v.  McKibben,  5  Ind.  261,  in  which  the  ruling  was  contrary 
to  that  made  in  Wittenbrock  v.  Bellmer,  cites  the  latter  case,  and  says 
that  "the  ruling  of  the  California  case  *  *  *  j^  ^\^q  better  de- 
cision." 

The  same  view  of  the  law  was  taken  by  the  supreme  court  of  the 
United  States  in  Parmelee  v.  Simpson,  5  Wall.  86,  18  L.  Ed.  542,  and 
in  Cook  V.  Tullis,  18  Wall.  338,  21  L.  Ed.  933.  In  the  latter  case  Wit- 
tenbrock v.  Bellmer  is  cited  with  approval.  In  the  notes  to  Atlee  v. 
Bartholomew  (Wis.)  5  Am.  St.  Rep.  103,  114  (s.  c.  69  Wis.  43,  33 
N.  W.  110),  it  was  said:  "As  a  general  rule,  if  a  party  has  a  com- 
plete cause  of  action  or  defense  when  a  suit  is  commenced,  he  cannot 
be  deprived  thereof,  pendente  lite,  by  his  adversary,  or  some  other 
party,  ratifying  some  act  or  contract  which  at  the  commencement  of 
the  action  was  without  any  binding  force  for  want  of  such  ratifica- 


Ch.  4)  CREATION  OF  THE  RELATION 


183 


tion."  See,  also,  Pollock  v.  Cohen,  32  Ohio  St.  514;  Fiske  v.  Holmes, 
41  Me.  441 ;  Wood  v.  McCain,  7  Ala.  806,  42  Am.  Dec.  612. 
— Having  shown  that  ratification  does  not  so  relate  back  as  to  affect 
the  intervening  rights  of  third  persons,  and  that  these  defendants  ac- 
quired rights  before  the  ratification  pendente  lite,  we  are  of  opinion 
that  the  judge  did  not  err  in  granting  a  nonsuit.'-**'  Judgment  affirmed. 
All  the  Justices  concurring. 


V.., 


(B)  Rerocability 

PERRY  V.  HUDSON. 
(Supreme  Court  of  Georgia,  1851.     10  Ga.  SG2.) 

Action  by  Oliver  H.  Perry  to  recover  money  paid  as  security  for 
defendant  under  judgment  in  Wilcox  county,  Alabama.  Plea,  gen- 
eral issue  and  payment.  Verdict  for  defendant.  The  court  refused 
a  new  trial.  Plaintiff  excepted  and  now  assigns  these  exceptions  for 
error. 

Warxicr,  J.  The  plaintiff  in  error  insists  upon  two  of  the  grounds 
only,  taken  in  the  bill  of  exceptions,  and  our  judgment  will  be  restrict- 
ed thereto. 

[1.]  First,  that  the  Court  erred  in  admitting  the  evidence  of 
Theresa  Killabren,  a  witness  offered  by  the  defendant.  It  appears 
from  the  record,  that  Melton,  as  the  agent  of  Hudson,  the  defendant, 
went  to  the  state  of  Alabama,  and  instituted  three  actions  of  trover  in 
the  name  of  Hudson,  to  recover  sundry  slaves.  Being  a  non-resident, 
he  was  required  to  give  security  for  the  costs  of  the  respective  suits, 
and  the  plaintiff  became  his  security ;  the  suits  were  instituted  in  the 
name  of  Hudson;  were  subsequently  dismissed,  and  the  costs  thereof 
paid  by  Perry,  who  now  brings  suit  against  Hudson,  to  recover  the 
amount  of  costs  so  paid. 

It  appears  that  after  the  suits  had  been  instituted  by  Melton,  as  the 
agent  of  Hudson,  in  the  name  of  the  latter,  he  went  to  Alabama,  assist- 
ed in  the  prosecution  of  the  suits,  and  continued  the  same  twice  on  his 
affidavit.  The  continuance  of  the  causes  on  the  affidavit  of  Hudson, 
the  plaintiff  therein,  is  not  only  shewn  by  the  records  of  the  Court  in 
which  the  .suits  were  pending,  but  is  also  .shewn  by  the  testimony  of 
James  T.  Johnson,  Esq..  the  attorney,  who  conducted  the  suits. 

Here,  then,  we  have  the  most  conclusive  evi<lence  that  Hudson  rat- 
ified the  act  of  his  agent  in  instituting  the  suits,  whatever  may  have 
been  the  original  authority  delegated  to  him.  and  by  such  ratification 
made  the  act  his  own,  and  bound  him  as  a  party  jilaintiff.  for  the  legal 
results  of  the  suits  thus  instituted.  1  TJvcrmore  on  .Agency,  44.  When 
the  princii)al  adojjts  the   acts   of   his  agent,   such  adoptive  authority 

»«  See  rsipccijilly  WihmI  v.  .McCiiiii.  Tiiylor  v.  Koliinsoii,  Jiml  rollocU  v. 
Cnlifii.  fitcM  ^iipra. 


184  Tiiic  uKLATioN  (Parti 

relates  back  to  the  time  of  the  transaction,  and  is  deemed  in  law  the 
same  to  all  purposes,  as  if  it  had  been  given  before.  Lawrence  v. 
Taylor,  5  Hill,  113. 

The  acts  of  ratification  of  the  aulhorily  of  Melton  to  institute  the 
suits  by  Hudson,  were  not  controverted  at  the  trial;  indeed,  the  fact 
that  he  continued  the  causes  twice  on  his  affidavit,  appeared  of  record. 
Upon  this  state  of  facts,  Hudson  attempted  to  shew  that  the  suits  were 
instituted  in  Alabama,  by  IMelton,  his  agent,  without  his  authority,  and 
therefore  he  was  not  liable  to  pay  the  costs  of  the  same,  and  for  that 
purpose  the  testimony  of  Killabren  was  introduced.  This  evidence 
was  inadmissible,  in  our  judgment,  to  destroy  the  effect  of  his  own 
conduct,  ratifying  the  institution  of  the  suits  as  before  stated,  by  prov- 
ing the  private  understanding  between  himself  and  Melton  in  relation 
to  the  suits,  prior  to  the  time  it  was  shewn  he  had  ratified  the  institu- 
tion of  them  by  continuing  them,  and  aiding  and  assisting  in  their 
prosecution.  The  suits  were  instituted  in  his  name,  and  if  done  with- 
out his  authority,  why  did  he  not  dismiss  them?  Why  did  he  con- 
tinue them  twice,  and  aid  in  the  prosecution  of  them? 

[2.]  Chancellor  Kent  states  the  true  doctrine  in  relation  to  this 
question,  when  he  says :  "It  is  a  very  clear  and  salutary  rule  in  rela- 
tion to  agencies,  that  where  the  principal,  with  knowledge  of  all  the 
facts,  adopts  or  acquiesces  in  the  acts  done  under  an  assumed  agency, 
he  cannot  be  heard  afterwards,  to  impeach  them,  under  the  pretence 
that  they  were  done  without  authority,  or  even  contrary  to  instruc- 
tions." 2  Kent's  Com.  616.  The  defendant  having  ratified  the  institu- 
tion of  the  suits  in  Alabama,  after  a  full  knowledge  that  the  same  had 
been  done  by  Melton,  in  his  name,  he  cannot  now  be  heard,  to  re- 
pudiate the  act,  under  the  pretence  that  the  suits  were  instituted  with- 
out his  authority,  or  contrary  to  his  instructions. 

The  second  objection  is  to  the  latter  part  of  the  charge  of  the  Court 
to  the  jury. 

[3.]  The  Court  in  the  first  part  of  its  charge  to  the  jury,  stated  the 
principles  of  the  law  applicable  to  the  case  before  it,  with  clearness 
and  precision.  But  in  that  portion  of  its  charge,  in  which  it  instructed 
the  jury  "that  if  they  believed  that  Hudson  did  not  order  the  suits,  nor 
subsequently  adopt  them,  but  that  by  an  agreement  with  Melton,  per- 
mitted ]\Ielton  to  use  his  name  only,  at  Melton's  own  costs,  then,  they 
should  find  for  the  defendant,"  we  think  there  is  error. 

There  is  not  a  particle  of  evidence  in  the  record,  that  we  can  dis- 
cover, going  to  shew  that  Hudson  did  not  adopt  and  ratify  the  act  of 
Melton  in  instituting  the  suits,  but  on  the  contrary,  the  evidence  is, 
that  he  did  adopt  and  ratify  the  institution  of  them,  by  continuing 
them  twice  on  his  own  affidavit,  and  assist  in  the  direction  and  prosecu- 
tion of  them.  This  evidence  of  the  plaintiff  was  not  impeached  or  con- 
troverted in  any  manner  whatever,  as  we  can  find  in  the  record;  con- 
sequently, it  was  error  to  instruct  the  jury  in  regard  to  an  assumed 
state  of  facts  which  did  not  exist;  for  there  was  no  evidence  before 


Ch.  4)  CREATION  OF  THE  RELATION  185 

them,  which  would  authorize  the  belief  that  Hudson  did  ttot  subse- 
quently adopt  and  ratify  the  suits,  after  they  had  been  instituted  in 
the  name  of  Melton ;  but  the  whole  of  the  evidence  in  relation  to  that 
point,  was  the  other  way,  and  this  was  the  controlling  question  in  the 
case.  The  whole  of  the  latter  part  of  the  charge,  in  our  judgment, 
destroyed  the  legal  effect  of  the  first  portion  of  the  charge,  which 
stated  the  law  correctly,  and  was  based  upon  the  evidence  of  the  adop- 
tion and  ratification  of  the  suits  by  the  defendant.  In  Paschal  v.  Da- 
vis, 3  Ga.  256,  we  held  it  to  be  error  in  the  Court  to  charge  the  jury 
upon  an  assumed  state  of  facts,  which  had  not  been  proved,  and  have 
re-afiirmed  that  principle  in  subsequent  cases. 

Let  the  judgment  of  the  Court  below  be  reversed. 


COFFIN  v.  GEPHART. 
(Supreme  Court  of  Iowa,  1865.    18  Iowa,  256.) 

Replevin  for  a  bull.  The  animal  was  left  by  his  owner,  the  plain- 
tiff, with  his  tenant,  who,  after  treating  him  as  his  own  for  some  time, 
sold  him  to  defendant.     Verdict  for  plaintiff,  and  defendant  appeals. 

Cole,  J.®^  I.  There  appears  to  have  been  no  controversy  between 
<^he  parties,  as  to  the  former  ownership  of  the  property  by  the  plain- 
tiff; but  the  defendants  claim  that  plaintiff,  after  a  full  knowledge  of 
the  sale  by  his  tenant,  to  the  defendant  Gephart,  acquiesced  in  and 
ratified  the  sale,  and  looked  to  his  tenant  for  pay  for  the  property. 
There  was  evidence  introduced,  tending  to  show  these  facts. 

The  defendants  asked  the  court  to  instruct  the  jury  that,  "if  any 
person,  being  in  the  lawful  possession,  sells  the  personal  property  of 
another  without  authority,  and  the  owner  subsequently,  and  with 
knowledge  of  all  the  circumstances  of  the  sale,  acquiesces  in,  and  rat- 
ifies it,  although  but  for  a  short  time,  he  becomes  thereby  bound  by 
the  sale,  and  cannot  afterwards  repudiate  it  to  suit  his  convenience." 
This  instruction,  with  others  of  like  import,  was  refused,  and  such  re- 
fusal is  assigned  as  error. 

We  think  this  instruction  embodies  the  law  of  the  case.®-  and  should 
have  been  given.  Pars,  on  Contr.  45,  46,  and  note  a  (3d  Ed.) ;  Smith 
V.  Hodson,  4  Durn.  &  East,  126-130;  Therold  v.  Smith,  11  Modern, 
71 ;  Mathews  v.  Gilliss,  1  Iowa,  242.     *     *     *     Reversed. 

•1  Part  of  the  opinion  is  omitted. 

»2  AcTord  :  Sniidcrs  v.  Peck,  S7  Fed.  61,  30  C.  C.  A.  WO  (1808),  suprn,  p.  140; 
Rowland  V.  BarnoH,  81  N.  C.  2'M  (1S70);  WrocV.  v.  Jones.  10  Tex.  461  (18r>6); 
Hunter  v.  Cobe,  84  Minn.  187,  87  N.  W.  (Wl  (UlOl).  It  mnttors  not  tiint  i)rln- 
dpnl  at  first  disapproved.  His  disaiiprovjil  lie  nmy  at  any  finio  counleiiiiand 
and  fiy  a  sul  soqufnt  assent  ratify.  Wi.ndward  v.  Harlow,  L'S  Vt.  ."{.'{8  (is.'')(;i. 
P.ut  if  the  prlnrliial  repudiate  tho  ronlrMct  of  tlie  agent,  he  cannot  speculate 
on  the  rise  or  fall  in  valuo,  and  after  an  unrcasonalile  time  ratify  it,  If  it  shall 
appear  advantageous  to  hlra.     Williinson  v.  Harwell,  13  Ala.  GOO  (1848). 


IStJ  TUia  uicLATiON  (Parti 

(C)  Riitificatioii  as  to  Agent 

Appeal  i)f  BERGER. 
(Supronu'  Court   of   roiiiisylvMiiia.   ISSO.     00   Pa.   44:^.) 

Exceptions  to  the  decree  of  the  Court  confirniini;-  auditor's  report 
as  to  sheriff's  sale  of  Hoig's  real  estate. 

Truxkey,  J.  Thomas  agreed  to  purchase  of  Hoig  a  tract  of  land, 
the  bargain  to  be  consummated  when  the  encumbrances  were  removed. 
They  met  a  nimiber  of  creditors  at  the  protlionotary's  office,  who  re- 
leased all  Hoig's  real  estate  from  the  lien  of  their  judgments  except 
one  tract;  and  Marsh  agreed  that  Berger's  judgment  should  have 
preference  in  the  order  of  lien  to  his  own.  Swift  was  acting  as  agent 
for  Berger  and  refused  to  release  Berger's  judgment  unless  such 
priority  was  given,  and  signed  the  release  upon  assurance  that  Marsh 
so  agreed.  The  agreement  to  give  preference  is  in  writing ;  the  induce- 
ment or  consideration  is  proved  by  oral  testimony,  and  the  fact  is 
found  by  the  auditor. 

It  is  conceded  that  each  creditor  is  bound  by  his  release,  on  the  faith 
of  which  Thomas  took  the  land  and  paid  the  purchase-money.  But 
Marsh  claims  that  his  contract  to  give  Berger  priority  is  nudum  pac- 
tum, because  Swift  had  no  authority  to  release ;  and  also  because  he 
recived  no  consideration  for  the  postponement. 

Upon  the  act  of  Swift,  as  agent  for  Berger,  Thomas  paid  the  pur- 
chase-money to  Hoig.  If  Swift's  act  was  authorized  by  the  principal, 
he  w-as  not  personally  liable ;  but  if  he  had  no  authority  or  exceeded 
the  authority  delegated  to  him,  he  became  personally  responsible  to 
Thomas  for  the  validity  of  the  release.  Where  an  agent  has  no  au- 
thority and  undertakes  to  act  for  the  princi])al,  he  will  be  personally 
responsible  therefor  to  the  person  with  whom  he  is  dealing  for  or  on 
account  of  his  principal ;  for  by  holding  himself  out  as  having  au- 
thority to  act  he  draws  the  other  party  into  a  reciprocal  engagement. 
Whatever  was  done  by  Swift  as  agent  is  valid  if  subsequently  ratified 
by  Berger.  A  great  jurist  said,  no  maxim  is  better  settled  in  reason 
and  law  than  that  a  subsequent  ratification  has  a  retrospective  effect, 
and  is  equivalent  to  a  prior  command. 

The  general  rule  is,  that  the  subsequent  assent  of  the  principal  to 
his  agent's  conduct  renders  the  principal  liable  on  contracts  made  in 
violation  of  the  principal's  orders,  or  even  where  there  has  been  no 
previous  retainer  or  employment ;  and  this  assent  may  be  inferred  from 
acts  of  the  principal.  Berger  has  pursued  the  land  excepted  from  the 
release;  he  claims  the  money  by  virtue  of  Marsh's  agreement;  he  ex- 
cepted to  the  auditor's  report,  and  has  appealed  to  this  court,  insisting 
upon  the  enforcement  of  that  agreement.  No  stronger  evidence  of 
ratification  ought  to  be  required.  But  Swift  was  his  agent  in  fact  for 
some  purposes,  and  though  informed  of  his  agent's  act,  he  did  not  dis- 


Ch.  4)  CREATION  OF  THE  RELATION  187 

avow  it,  and  therefore  he  made  the  agent's  act  his  own.  Bredin  v. 
Dubarry,  14  Serg.  &  R.  27 .  \\'e  discover  nothing  in  this  case  to  take 
it  out  of  the  operation  of  general  and  familiar  rules  relative  to  ratifica- 
tion by  a  principal  of  what  has  been  done  in  his  name  by  one  acting 
as  his  agent.  In  general,  the  ratification  of  a  contract  originally  made 
by  one  without  authority,  will  relieve  the  agent  from  all  responsibility 
if  the  contract  purports  to  be  made  by  him  merely  as  agent,  although 
without  such  ratification,  he  would  be  liable  to  the  other  party  and 
also  in  some  cases  to  the  principal."^ 

The  facts  in  this  case  clearly  show  a  contract  which  could  be  ap- 
proved by  Berger  and  made  his  own.  If  the  contract  were  void,  no 
subsequent  act  would  ratify  it;  the  rule  has  exceptions.  Where  a  con- 
tract has  been  made  by  a  person  with  one  as  agent  who  has  no  au- 
thority, the  parties  do  not  always  stand  on  equal  terms ;  since  the  prin- 
cipal may  elect  to  ratify  the  act  or  disavow  it.  This  is  not  the  only 
case  where  one  contracting  party  may  be  bound  before  the  other ;  for 
instance,  one  who  makes  an  executory  contract  with  an  infant  is 
liable  thereon,  though  the  infant  may  renounce  or  confirm  when  he 
arrives  at  majority;  and  a  married  woman  may  hold  a  party  to  per- 
formance of  an  agreement  with  her,  though  it  could  not  be  enforced 
against  her.  Thomas  properly  acted  upon  the  release ;  had  it  not  been 
ratified  he  would  have  remedy,  if  compelled  to  pay  Berger's  judgment, 
against  Swift;  the  ratification  has  the  same  effect  as  original  authority, 
and  Berger  is  bound  while  Swift  is  not  answerable  at  all.  Now,  the 
rights  of  the  parties  are  to  be  considered  as  if  Berger  himself  orig- 
inally released  and  made  the  agreement  with  Marsh. 

The  consideration,  in  part  if  not  entirely,  for  Berger's  release,  was 
Marsh's  agreement  to  postpone  the  lien  of  his  judgment  on  the  re- 
maining farm  of  Hoig.  This  was  sufficient  if  the  release  conferred  a 
slight  benefit  on  Marsh  or  a  third  person ;  or  if  Berger  suffered  the 
least  injury  or  inconvenience  without  benefiting  any  person.  But  it 
was  a  benefit  to  Hoig  and  Thomas,  and  it  was  a  giving  up  of  a  right 
by  Berger.  It  is  immaterial  that  Marsh  received  no  benefit,  if  he  pro- 
cured a  benefit  to  another,  or  caused  the  appellant  to  part  with  a  legal 
right.  Mutual  prDuiises  are  a  sufficient  consideration  for  each  other; 
Marsh  and  Thomas  enjoy  all  which  Berger  gave  and  .Marsh  is  bound 
by  his  contcmj)orancous  promise. 

It  was  pressed  in  argument  that  the  appellee's  judgment  has  the 
stronger  claim  in  equity.  This  is  not  ajiparent.  He  contracted  that 
his  legal  right  of  j)riorily  should  be  i)ostponcd  in  favor  of  the  appel- 
lant. He  hiiuself  wrote  and  signed  the  contract,  and  there  is  not  the 
slightest  evidence  of  fraud  or  imposition.  It  is  manifest  that  for  some 
cause  he  was  generous  to  Hoig  and  wished  the  sale  to  Thomas  coii- 

"J*  Tf)  rflifVf  tlio  jiL'ciit  it  iiiiisl  Miipcjir  tliiit  tln'  tliird  iicrsnn  is  in  no  worsts 
position  tlum  lie  would  li;ivc  (K<Mi|ii«'(l  had  tlic  ;i;:riit  iM'tt-d  uiidtT  prior  ;nitli'ir- 
ity.  The  imt'iit  in  trrMicriil  is  not  iiound  to  ^ivc  tliird  persons  iiolici'  of  flic  rat- 
itir-.-ition.     Slicnicld   \ .   Liidnc    1'".   .Minn,  .".ss  ((,il.  :;jr,),   to  Am.   Ki-ii.  !».">. 


> 


L> 


1S8  Tin:  iM-i.ATioN  (Parti 

sumnintcd.  to  \vhioh  end  he  niade  the  agreement;  1)ul  there  is  nothing 
in  that  calling  for  its  rescission. 

Decree  reversed  and  it  is  now  considered  and  decreed  that  the  judg- 
ment of  Peter  Bergcr  is  entitled  to  preference  in  the  order  of  lien  to  the 
judgment  of  C.  R.  Marsh,  and  that  the  fund  he  appropriated  accord- 
ingly.   Costs  of  this  appeal  to  he  paid  by  the  appellee. 


LINGENFELDER  v.  LESCPIEN. 

(Supreme  Court  of  Missouri,  1895.    134  Mo.  55,  34  S.  W.  1089.) 

Action  to  recover  from  an  agent  $5,009,  the  alleged  difference  be- 
tween the  value  of  certain  real  estate  and  the  price  at  which  defendant 
sold  it  'to  plaintiff.  Defendant  without  written  authority  from  the 
owner  contracted  that  the  latter  would  convey  to  plaintiff  the  land  in 
question  by  warranty  deed  free  from  incumbrances.  Defendant  was 
willing  to  return  to  plaintiff  $500  earnest  money  paid  by  him,  with  in- 
terest thereon.  From  judgment  for  $517.75  in  his  favor,  plaintiff 
appeals. 

Burgess,  J.®*  *  *  *  There  is  perhaps  no  principle  of  law  bet- 
ter established  than  that,  where  an  agent  undertakes  to  bind  a  princi- 
pal when  he  has  no  power  to  do  so,  he  thereby  renders  himself  per- 
sonally responsible ;  and  the  fact  that  he,  in  so  doing,  may  have  acted 
in  the  utmost  good  faith,  and  honestly  believed  that  he  had  such  pow- 
er, makes  no  difference.  Smout  v.  Ilbery,  10  Mees.  &  W.  1 ;  Wright 
v.  Baldwin,  51  Mo.  269;  Gestring  v.  Fisher,  46  Mo.  App.  603.  The 
case  last  cited  was  an  action  for  damages  against  the  defendants,  who 
had,  without  authority,  sold  plaintiff  a  lot  in  the  city  of  St.  Louis,  and, 
by  a  written  contract  executed  in  the  name  of  Bridge  (the  supposed 
owner  of  the  property)  by  Fisher  &  Co.,  agents,  promised  to  make  a 
perfect  title.  Rombauer,  P.  J.,  in  speaking  for  the  court  said :  "But 
a  contract  of  a  real-estate  agent  in  selling  property  intrusted  to  him 
for  that  purpose  is  peculiar.  In  absence  of  an  express  agreement  to 
the  contrary,  he  does  not  undertake  to  bind  all  claimants  of  the  title, 
nor  that  he  will  sell  an  unincumbered,  fee-simple  title,  but  only  that 
he  will  sell  such  title  as  his  principal  has.  Whether  the  sale  be  finally 
consummated  depends  generally  upon  the  further  question  whether  his 
principal  has  a  perfect  title,  or,  if  not,  whether  the  vendee  is  satisfied 
with  an  imperfect  title.  The  agent,  by  his  agreement  to  negotiate  a 
sale,  assumes  no  obligation  in  reference  to  the  title,  unless  it  was  made 
a  part  of  his  duty  to  have  the  title  examined  before  attempting  to  effect 
a  sale,     *     *     *     or  unless  he  warrants  the  title  to  the  vendee." 

We  do  not  understand  that  defendant,  by  the  terms  of  the  contract 
now  under  consideration,  undertook  to  warrant  the  title  to  be  in  Mrs. 

"*  Part  of  the  opinion  is  omitted. 


Ch.  4)  CREATION  OF  THE  RELATION  189 

Tiekemeier,  but  that  the  extent  of  his  undertaking  was  that  she  would 
do  90.  This  seems  clear  from  the  provision  in  the  contract  by  which 
it  is  agreed  by  and  between  the  parties  thereto  that  the  title  to  the 
property  will  be  conveyed  by  warranty,  and  perfect  and  free  from  all 
liens  and  incumbrances.  There  is  nothing  in  the  contract  which  can 
be  fairly  construed  as  a  promise  or  agreement  on  the  part  of  defend- 
ant to  warrant  the  title,  or  that  ]\Irs.  Tiekemeier  had  the  title  in  fee 
at  the  time  the  contract  was  entered  into.  He  only  contracted  to  sell, 
for  her,  her  interest  in  the  land ;  that  she  would  make  a  warranty  deed 
thereto, — and  as,  in  doing  this,  he  acted  without  authority  from  her, 
he  should  be  held  to  respond  in  damages  to  the  purchaser,  unless  the 
contract  was  subsequently,  and  before  the  expiration  of  the  time  with- 
in which  the  deed  was  to  be  delivered,  ratified  by  her. 

In  Story,  Ag.  §  251,  it  is  said;  "Where  a  contract  which  has  been 
originally  made  by  the  agent  without  authority  is  afterwards  ratified 
by  the  principal,  that  ratification   will,   in  general,   relieve  the  agent    /U^L-t-x/ 

from  all  responsibility  on  the  contract,  if  it  purports  to  be  executed  by  v , 

him  merely  as  an  agent,  although,  without  such  ratification,  he  would 
be  liable  to  the  othet  contracting  party  for  his  misrepresentation  or 
mistake  of  authority.  Thus,  if  a  person  should,  in  his  own  name,  but 
in  the  character  of  agent  of  the  owner,  sign  a  written  agreement  for 
the  sale  of  an  estate,  without  any  authority  from  the  owner,  and  the 
latter  should  afterwards  sign  the  same  agreement,  and  declare  thereon 
that  he  sanctioned  and  approved  the  agent's  having  signed  it  in  his  be- 
half, the  agent  will  no  longer  be  personally  liable  on  the  contract,  but 
his  principal  only  will  be  liable,  although  the  agent,  without  such  rati- 
fijiation,  might  have  been  liable  thereon."  Roby  v.  Cossitt,  78  111.  638. 
/  The  ratification  makes  the  instrument  binding  on  the  principal,  to 
111  intents  and  purposes,  as  if  originally  authorized  by  him ;  and  the 
agent  will  not,  under  such  circumstances,  be  personally  liable,  unless 
his  personal  liability  is  created  by  the  instrument.  Bray  v.  Gunn,  53 
Ga.  144.  /While  the  authorities  are  somewhat  in  conflict  as  to  whether 
or  not  the  act  of  a  person  who  assumes  to  repres^t  as  agent,  without 
authority  Vrom  the  person  in  whose  name  the  actMs  done,  may  be  sub/ 
sef|uently  ratified  by  such  person,  the  decided  weight  is  that  it  may  be, 
when  done  with  a  full  kiipwledge  of  all  the  facts,  and  the  evidence  of 
such  knowledge  is  clear.  iBank  v.  Gay,  63  Mo.  33,  21  Am.  Rep.  430, 
supra,  p.  95,  and  authorities  cited;  Bless  v.  Jenkins,  129  Mo.  647,  31 
S.  W.  938,  supra,  p.  135. 

Mrs.  Tiekemeier,  with  a  full  knowledge  of  all  the  facts  and  circum- 
stances attending  the  execution  of  the  contract,  seems  to  have  done 
everything  that  was  necessary  to  ratify  the  same  and  make  it  her  con- 
tract. She  not  only  procured  a  foreclosure  of  the  deed  of  trust  given 
by  her  deceased  hu'^band,  and  tendered  to  plaintiff  a  deed  to  the  prop- 
erty from  the  i:)urchascr  at  such  sale,  but  she  procured  from  the  heirs 
of  her  husband  r|uitclaim  deeds,  at  the  request  of  plaintiff,  anrl,  to- 
gether with  a  deed  of  general  warranty  executed  by  herself,  tendered 


/U/U^ 


190  Tin;  Ki'.i.APioN  (Parti 

ihciu  to  plaintilT.  ami  thus,  by  unri|ui\(>cal  ads.  ratified  the  contract 
of  sale  made  by  defendant.  It  is  trnc  that  defendant  had  not  ohtained 
a  deed  for  the  jiroperty  nnder  tlie  trustee's  sale,  hut  that  fact  did  not 
in  any  way  atTect  the  ratification  of  the  contract  of  sale  by  her.  Mrs. 
'riekemeier  beinsj^  unable  to  pass  the  title  in  fee  to  the  property,  and 
plaintitT  havinj:;  declined  to  accept  such  title  as  she  could  convey,  he 
was  only  entitled  to  recover  from  defendant  the  amount  i)aid  by  him 
as  earnest  money,  and  interest  thereon,  and  the  court  correctly  so 
ruled.  Gestring  v.  Fisher,  supra.  We  accordingly  al^rm  the  judg- 
ment. 


TRIGGS  V.  JONES. 

(Supreme  Court  of  Minnesota,  1S91.     40  INIinn.  277.  48  N.  W.  1113). 

Action  by  Triggs  against  his  agent  Jones  (impleaded  with  William 
O.  Cook  and  Wilton  George)  asking  for  the  cancellation  of  deeds  from 
Triggs  to  Cook  of  land  in  Duluth.  and  for  such  other  relief  as  might 
be  just  and  equitable.  It  a])peared  that  Cook  owned  a  patent,  half  of 
which  he  offered  to  transfer  to  Jones  if  he  would  promote  a  corpora- 
tion for  its  manufacture.  Jones  induced  Triggs  to  subscribe  for  $15,- 
000  of  stock  and  to  convey  the  Duluth  land  in  payment.  Triggs  sent 
the  deed  to  Jones,  as  he  claimed,  to  be  held  in  escrow  till  the  corpo- 
ration should  be  formed.  Jones  at  once  delivered  it  to  Cook,  who  con- 
veyed to  George,  an  innocent  purchaser.  The  corporation  was  never 
formed.  Appeal  from  judgment  for  $15,000,  with  interest,  against 
Jones. 

Mitchell,  J."^  [After  disposing  of  certain  questions  of  procedure, 
evidence,  and  damages ;]  *  *  *  The  remaining,  and  really  the 
only  important  question  in  the  case  is  as  to  the  alleged  ratification  by 
plaintiff  of  the  act  of  Jones  in  delivering  the  deed.  It  is  claimed  that, 
after  knowledge  of  the  facts,  plaintiff  ratified  Jones'  act,  and  that  such 
ratification  operated  the  same  as  original  authority,  and  absolved  Jones 
from  all  liability,  even  if  the  delivery  of  the  deed  was  unauthorized 
when  made.  The  court  finds  that  Jones  immediately  informed  plain- 
tiff (by  letter  dated  August  8,  1887)  that  he  had  delivered  the  deed  to 
Cook,  and  that  plaintiff  did  not  at  once  repudiate  the  act,  and  never 
prior  to  the  commencement  of  this  action  notified  Cook  that  he  repudi- 
ated, but  left  the  deed  in  the  possession  of  Cook,  and  joined  with 
Jones  in  taking  the  preliminary  steps  in  the  formation  of  the  contem- 
plated cori)oration,  in  which  it  had  been  agreed  that  plaintiff  was  to 
receive  stock  as  already  stated.  It  w^as  because  of  this  delay  to 
promptly  repudiate  the  act  of  Jones  that  the  court  refused  to  grant 
plaintiff  relief  against  defendant  George,  who  was  an  innocent  pur- 
chaser.    But  while  the  facts  found  may  be  evidence  of  a  ratification, 

»■'•  I'art  of  the  opinion  is  omitted. 


Ch.  4)  CREATIOX  OF  THE  KELATIOX  191 

they  do  not,  as  a  matter  of  law,  amount  to  that,  at  least  in  favor  of 
Jones,  the  party  who  committed  the  unauthorized  act. 

It  is,  however,  assigned  as  error  that  the  court  failed  to  find  that 
plaintiff  had  ratified  the  delivery  of  the  deed.  It  is  impracticable  to 
state,  or  even  discuss,  the  evidence  at  length.  A  careful  perusal  of  it 
satisfies  us  that,  while  plaintiff'  was  informed  by  letter  as  early  as 
August,  1887,  that  the  deed  had  been  delivered,  yet  this  information 
was  accompanied  and  frequently  followed  by  statements  and  assur- 
ances from  Jones  to  the  effect  that  the  original  arrangement  was  be- 
ing or  would  be  carried  out,  so  that  he  would  get  his  stock  as  had  been 
agreed,  and  that  Cook  would  return  the  deed  or  reconvey  the  prop- 
erty if  he  (plaintiff')  desired,  etc.,  which  were  calculated  to  keep  plain- 
tiff quiet,  and  allay  any  possible  fears  on  his  part ;  and  that,  influenced 
and  induced  by  these  considerations,  he  made  no  express  repudiation 
of  Jones'  act,  but  let  matters  rest,  hoping  and  expecting  that  the  deal 
would  still  be  consummated  according  to  agreement,  and  he  get  the 
stock  to  which  he  would  be  entitled ;  and  that  with  this  hope  and  ex- 
pectation, and  at  the  instance  of  Jones,  in  whom  he  seemed  still  to 
have  implicit  confidence,  he  sent  a  proxy  to  one  Mahle,  authorizing 
him  to  subscribe  for  stock  in  his  name,  and  to  vote  it  for  officers  of 
the  company  at  the  meeting  for  organization ;  but  that  finally  having 
discovered  that  the  whole  scheme  had  fallen  through,  and  would  never 
be  consummated,  he  brought  this  action  to  recover  either  the  land  or 
damages.  At  least,  the  evidence  is  such  that  it  would  have  justified 
the  court  in  taking  this  view  of  the  facts. 

There  is  no  doubt  that  the  general  rule  is  that,  by  a  ratification  of 
an  unauthorized  act,  the  principal  absolves  the  agent  from  all  respon- 
sibility for  loss  or  damage  growing  out  of  the  unauthorized  transac- 
tion, and  that  thenceforward  the  principal  assumes  the  responsibility 
of  the  transaction,  with  all  its  advantages  and  all  its  burdens.  Xeither 
is  there  any  question  but  that,,  where  the  rights  and  obligations  of 
third  persons  may  depend  on  hisd  election,  the  principal  is  bound  to  act 
and  give  notice  of  his  repudiation  or  disaffirmance  of  the  unauthorized' 
act  at  once,  or  at  least  within  a  reasonable  time  after  knowledge  of 
the  act,  and,  if  he  does  not  so  dissent,  his  silence  will  afford  conclusive 
evidence  of  his  approval.  [  Such  a  rule  is  necessary  to  protect  the 
rights  of  third  parties  who^ave  dealt  with  the  agent.  If  the  principal, 
after  knowledge,  remains  entirely  passive,  it  is  but  just,  when  the  i)ro- 
tcction  of  third  parties  require  it,  to  presume  that  what,  upon  knowl- 
edge, he  has  failed  to  repudiate,  he  has  tacitly  confirmed.  lUit  it  is 
apparent  that  the  reasons  for  such  a  rule  do  not  apply  with  c(|ual 
force  in  favor  of  tUt  agent  himself,  who  has  wrongfully  committed  the 
unauthorized  act.  /Conse(juently  mere  passive  inaction  or  silence,  whiih 
would  amount  to  jln  imj)lied  ratification  in  favor  of  third  parties,  might 
not  amount  to  that  in  favor  of  the  agent,  so  as  to  absolve  him  from 
liability  to  his  principal  for  loss  or  damage  resulting  from  the  unau- 
thorized act.  especially  if  such  inaction  or  failure  to  immcdiatelv  dis- 


102  TiiK  KKLATioN  (Parti 

affirhi  was  imiiiocd  by  the  assurances  or  persuasion  of  the  agent  him- 
self. 

Nor  in  this  case  docs  the  athrniativc  action  of  the  ph\intiff,  after 
knowledge  of  the  deHvcry  of  tlic  deed,  in  taking  part  in  the  ]M-cHmi- 
nary  steps  for  the  organization  of  the  contemplated  stock  company,  of 
itself  amount  to  a  ratification  of  the  unauthorized  act.  Such  steps 
were  right  in  the  line  of  the  original  agreement  between  the  parties, 
and  were  designed  to  carry  it  into  effect.  Induced,  as  such  action 
probably  was,  by  the  assurances  of  Jones  that  the  enterprise  would 
still  go  on,  and  plaintiff  get  his  stock,  it  really  amounted  to  nothing 
more  than  an  effort  on  plaintiff's  part,  after  knowledge  of  Jones'  de- 
viation from  his  instructions,  to  avoid  loss  thereby,  which  is  not-  such 
a  ratification  as  will  relieve  the  agent.  Mechem,  Ag.  §  173.  Upon 
proof  that  Jones'  act  was  without  original  authority,  the  burden  was 
upon  him  to  show  such  a  subsequent  ratification  as  would  relieve  him 
from  liability. 

The  court  has  not  found  any  such  ratification,  and,  in  our  opinion, 
under  the  evidence,  he  was  justified  in  finding,  as  he  in  effect  does, 
that  there  was  none.    Order  afifirmed. 


SCHANZ  V.  MARTIN. 

(Supreme  Court  of  New  York,   Appellate  Term,  1902.     37  Misc.  492,  75  N. 

Y.  Supp.  997.) 

Appeal  from  judgment  of  the  Municipal  Court  of  the  City  of  New 
York  for  plaintiff's. 

GiEGERiCH,  J.f  The  defendant  was  a  salesman  of  the  plaintiffs,  and, 
without  authority,  collected  from  one  of  their  customers  the  price 
of  two  suits  of  clothes.  They  brought  an  action  against  the  customer, 
but,  upon  discovering  that  the  defendant  had  collected  for  the  suits, 
discontinued  that  action,  and  began  this  one  against  the  defendant 
for  conversion,  and  obtained  judgment.  The  appellant  challenges  the 
judgment,  on  the  ground  that  the  plaintiffs  failed  to  show  (as  is  req- 
uisite to  the  maintenance  of  an  action  for  conversion)  either  owner- 
ship of  the  money  or  an  immediate  right  to  its  possession. 

The  appellant  seems  to  concede  that  an  action  for  money  had  and 
received  would  lie,  on  the  theory  that  by  bringing  such  an  action  the 
plaintiffs  would  ratify  the  otherwise  unauthorized  act,  thereby  im- 
posing upon  the  defendant  an  obligation,  based  on  the  theory  of  a 
quasi  contract,  to  turn  over  the  money.  Keener,  Quasi  Cont.  167. 
No  reason  is  obvious,  however,  why  an  action  for  conversion  will  not 
lie  as  well.  The  discontinuance  of  the  suit  against  the  customer,  and 
the  institution  of  a  suit  of  any  character  against  the  defendant,  would 

t  Part  of  the  opinion  is  omitted. 


}\^* 


Ch.  4y  CREATION  OF  TUE  RELATION  193 

be  a  ratification  of  the  act  of  collecting,  and  a  retroactive  authoriza- 
tion to  the  defendant  to  collect.''^  "A  subsequent  ratification  is  equiv- 
alent to  an  original  command."  Doty  v.  Wilson,  14  Johns.  379,  382 ; 
Hamlin  v.  Sears,  82  N.  Y.  Z27 ,  331.  Omnis  ratihabitio  retrotrahitur 
et  mandato  priori  sequiparatur.  Brown,  Leg.  Max.  781 ;  Story  Ag 
§  445.  _  \ 

But  it  does  not  necessarily  follow  that  there  would  be  an  authoriza:,'^'' 
tion  to  retain,  as  well  as  to  collect,  the  money.  An  agent  may  te 
authorized  both  to  collect  and  to  retain  money,  and  mingle  it  with  his 
own  or  other  money,  in  which  event  there  are  numerous  authorities 
that  he  is  not  liable  for  conversion.  Walter  v.  Bennett,  16  N.  Y.  250 ; 
Conaughty  v.  Nichols,  42  N.  Y.  83 ;  Vandelle  v.  Rohan,  36  Misc.  239, 
7Z  N.  Y.  Supp.  285.  Or  he  may  be  authorized  to  collect  a  single 
claim  and  to  deliver  to  his  principal  the  identical  money  received,  in 
which  case  he  is  liable  for  conversion.  See  Farrelly  v.  Hubbard,  148 
N.  Y.  592,  43  N.  E.  65 ;  Donohue  v.  Henry,  4  E.  D.  Smith,  162.  The 
former  is  the  usual  situation  where  an  agent  has  authority  to  make 
collections  generally,  or  to  make  more  than  one  collection,  but  where 
such  authority  is  confined  to  a  single  case,  as  here,  it  is  plain  that 
there  is  not  merely  a  debt  owing  from  the  agent  to  the  principal,  but 
an  obligation  to  pay  over  the  identical  money. 

The  case  of  Farrelly  v.  Hubbard,  supra,  is  quite  in  point.  The 
court  there  said  (148  N.  Y.  594,  595,  43  N.  E.  66) :  "The  plaintiff 
assigned  to  the  defendant,  by  an  instrument  in  writing,  the  wages  or 
salary  due  him  from  the  New  York,  Lake  Erie  &  Western  Railroad 
Company  (in  whose  employ  he  then  was),  for  the  month  of  Decem- 
ber, 1886,  constituting  him  his  attorney  to  collect  and  receipt  for  it. 
*  *  *  The  language  of  the  contract  of  assignment,  already  quoted. 
is  perfectly  clear,  and  shows  that  the  defendant  in  the  action  in  jus- 
tice's court  was  acting  solely  as  the  servant  of  the  defendant  in  this 
action,  and  it  was  his  duty  to  have  immediately  carried  the  money  or 
check  to  his  assignee,  and,  not  doing  so,  he  became  liable  for  conver- 
sion upon  failure  to  pay  over  on  demand." 

In  Donohue  v.  Henry,  supra,  it  was  said  (page  163):  "It  is  objected 
that  trover  will  not  lie  for  this  item  of  money.  That  is  true  when  the 
money  has  gone  into  the  defendant's  possession  with  the  plaintiff's 
assent,  and  permitted  to  be  mixed  up  with  his  own  money ;  but  where 
money  is  received  from  a  third  person,  the  party  to  whom  the  money 
belonged  has  a  right  to  insist  upon  receiving  the  identical  money  so 
collected,  and  if  not  delivered  on  request  may  maintain  a  possessory 
action  therefor."     *     *     * 

The  appellant's  claim  that  the  jjlaiiitiffs  are  bound  by  what  he  calls 
their  election  to  sue  the  customer,  rather  than  him,  takes  no  account 

90  So  where  an  agent  without  authority  took  liorsos  In  itayuiont  of  a  debt 
due  his  priiicipal,  the  court  held  the  priuc-lpal  luluht  ratify  and  recover  the 
horse.s  fnun  th<'  ntrfiit.     Iloriuann  v,  Sherin,  0  S.  D.  82,  GO  N.  W.  145  (181)4). 
GoDD.rR.&  A.— 13 


11)4  Till',  i;i;i.ATi(iN  (Parti 

of  tlic  prinoiiile  that  (licic  can  lie  no  elect ii)n  williout  knowledge  of 
the  facts.  It  was  not  until  the  trial  of  the  action  against  the  cus- 
tomer that  the  plaintifYs  first  learned  that  ihc  hill  had  hecn  paid  to 
the  defendant,  and  of  their  conseciuent  right  against  him.  The  judg- 
ment should  he  altlrmed,  with  costs. 


SHEPHERD  V.  GIBBS. 

(Supreme  Court  of  Michigan,  1891.    85  Mich.  85,  48  N.  W.  179.) 

Assumpsit.     Defendant  brings  error.     Afhrmed. 

MoRSK,  J.  Plaintiff  brought  suit  in  justice  court  upon  the  following 
promissory  note:  "$50.00.  St.  Louis,  Mich.,  Nov.  27,  1883.  Ninety 
days  after  date,  for  value  received,  I  promise  to  pay  to  the  order  of 
William  D.  Gibbs  fifty  dollars  at  the  banking-house  of  Darragh  &  Co., 
St.  Louis,  Mich.,  with  ten  per  cent,  interest  after  due.  Truman  Gibbs." 
The  note  was  duly  indorsed  by  William  D.  Gibbs.  Plaintiff  recovered 
judgment,  from  which  the  defendant  appealed  to  the  circuit  court  for 
the  county  of  Isabella.  The  circuit  judge  directed  a  verdict  for  the 
plaintiff'  for  the  full  amount  of  the  note  and  interest. 

The  defense  was  that  there  was  no  consideration  for  the  note.  The 
defendant,  to  make  out  his  case,  introduced  testimony  tending  to  show 
that  the  note  was  given  in  consideration  of  the  plaintiff's  assisting  him 
in  purchasing  a  certain  piece  of  land  of  one  Thompson.  The  plain- 
tiff had  business  relations  with  Thompson,  and  told  defendant  that  he 
could,  by  reason  of  such  business  relations,  purchase  the  land  much 
cheaper  than  defendant  could,  enough  so  that  he  could  afford  to  pay 
him  $50  for  his  services  and  influence  in  buying  the  land.  Upon  these 
representations,  and  the  understanding  from  plaintiff  that  he  could 
get  the  land  of  Thompson  for  $400,  defendant  turned  over  to  plaintiff 
a  note  for  $400  against  third  parties,  not  yet  due,  and  received  from 
plaintiff  an  order  to  Thompson  to  give  defendant  a  deed  of  the  land, 
and  charge  the  purchase  price,  $400,  to  plaintiff.  Defendant  took  the 
order,  and  went  to  see  Thompson.  Before  he  showed  the  order  to 
Thompson  defendant  asked  him  how  much  he  wanted  for  the  land, 
and  Thompson  told  him  he  held  it  at  $400.  Defendant,  however,  pre- 
sented the  order  of  plaintiff'  to  Thompson,  and  received  his  deed  upon 
it.  He  said  nothing  to  plaintiff  about  any  dissatisfaction  with  his  bar- 
gain or  his  arrangement  with  plaintiff  until  after  the  note  became  due, 
when  he  refused  to  pay  it. 

The  testimony  on  the  part  of  the  plaintiff  showed  a  different  state 
of  facts,  but  in  our  view  of  the  case  it  is  not  necessary  to  set  it  out. 
The  circuit  judge  held  that  it  was  the  duty  of  defendant,  when  he 
found  out  from  Thompson,  before  he  presented  the  order  of  the  plain- 
tiff, that  he  could  himself  purchase  the  land  for  $400,  to  have  repudi- 
ated his  bargain  with  plaintiff,  and  tendered  him  back  his  order,  and 
demanded  his  notes.     But  failing  to  do  this,  and  using  the  order  of 


./ 


Ch.  4)  CREATION  OF  THE  RELATION  195» 

the  plaintiff  as  so  much  money  with  which  to  purchase  the  land,  he 
acted  upon  and  ratified  his  agreement  with  plaintiff  with  full  knowl- 
edge of  all  the  facts  in  the  case,  and  could  not  afterwards  repu- 
diate it.**' 

The  circuit  judge  was  clearly  right  in  his  ruling,  and  the  judgment 
will  be  affirmed,  with  costs. 


(D)  As  to  the  Principal 
OVERBY  V.  OVERBY. 

(Supreme  Coiu't  of  Louisiana,  1S66.     IS  La.  Ann.  54G.) 

Hymax,  C.  J.  In  the  year  1863,  one  of  plaintiff's  brothers  brought 
a  lot  of  plaintiff's  cotton  and  stored  it  at  Mr.  Billings'  plantation,  in 
the  parish  of  Morehouse. 

Plaintiff,  who  resided  in  Kentucky,  came  to  this  state,  and,  when 
about  to  return  to  that  state,  he  left  the  cotton  in  charge  of  his  brother, 
E.  P.  Overby,  to  do  with  it  as  if  it  was  his  own. 

In  the  year  1864,  the  cotton-burners  of  the  Confederate  States  vis- 
ited the  said  parish,  and  commenced  their  work  of  destruction. 

E.  P.  Overby,  desirous  of  saving  his  brother's  cotton  from  being 
burned,  applied  to  several  persons  to  get  them  to  remove  and  con- 
ceal the  same  from  the  burners,  offering  a  half  of  the  cotton  that 
might  be  saved  by  removal  and  concealment,  to  any  person  who  would 
undertake  to  remove  and  conceal  it.  This  proposition,  refused  by 
several,  was  accepted  by  William  R.  Ward,  who  removed,  concealed 
and  saved  one  hundred  and  seventeen  bales  of  the  cotton,  and  E.  P. 
Overby  gave  him  (Ward)  58 y^  bales  of  same. 

Plaintiff  in  this  case  sued  Ward  to  recover  of  him  the  S^y^  bales 
of  cotton,  or  their  value.  One  of  the  defences  set  up  by  W^ard  in  his 
answer  is,  that  the  agent,  E.  P.  Overby,  had  authority  to  make  the  con- 
tract, and  that  plaintiff  had  ratified  the  acts  of  the  agent.  The  trial 
of  the  case  resulted  in  a  verdict  and  judgment  for  defendant.  Plain- 
tiff has  appealed. 

On  plaintiff's  coming  again  into  this  state,  he  was  informed,  on 
in(|uiry,  that  his  brother,  E.  P.  Overby,  had  saved  some  of  his  (plain- 

07  Ratification  liy  a  itriiicii)al  of  a  tort  cannot  relievo  tlie  tort  feasor  of 
llaliility  to  tlic  tliii'l  jicrsons  wronged.  'J'iie  fact  tiiat  lie  acts  for  another,  hy 
antlii;rity  previously  or  sulisciincnily  conferred,  cannot  absolve  I  he  anient  from 
his  liahillty  to  the  person  wroni^ed.  Wright  v.  Katon,  7  Wis.  "ill,")  (IS.V.d; 
Richardson'  v.  Kiinhiill.  '2X  Me.  -p;:!  (IMS);  I'erniinter  v.  Kelly,  is  Ala.  7H!, 
54  Am.  I<ec.  177  (ls."il);  I'.nrnap  v.  .M.irsh,  V.\  111.  .'».[.">  (1S.")L;)  ;  .Josselyn  v.  .Mc- 
Allister, '12  .Mich.  .';(I0  <1S71).  And  this  Is  true  even  when  the  a^'eiit  ai(s  in 
good  faith,  as  when  he  sends  tJie  ;.'oods  of  a  third  iierson  to  his  principjil.  s\\\^- 
posin;;  them  lo  belong'  to  his  principal.  Stephens  v.  lOhvell,  4  .M;mle  &  .Sejwyii. 
•J.V.)  (isl.'i).  Sneh  ralilicafion  will,  however,  relieve  the  a^'eiit  of  toit  liahilily 
to  the  jiriiicipJil.  TIk-  liitter  need  not  ratify:  Imt.  if  he  does,  he  w:iives  the 
wron;;  committed  l>y  the  a;.'ent,  and  cjin  hold  him  only  jis  for  :in  anttiorized 
act.  Judah  v.  Trustees  of  Vincennes  I'niverslty.  10  lud.  5U  (ISUl) ;  SzymaiisUi 
V.  I'lassan,  20  La.  Ann.  90,  90  Am.  Dec.  382  (1808). 


^ 


196  THE  RELATION  (Part  1 

tiff's)  cotton,  by  giving  one-half  for  removing  tlic  otlicr.  He  replied, 
on  receiving  this  information,  that  whatever  his  brother  had  done 
would  be  satisfactory  to  him. 

His  not  dissenting,  but  rather  assenting,  to  what  had  been  done  by 
his  agent,  ratiiicd  the  contract  that  his  agent  had  made  with  Ward. 
A  ratification  by  the  principal,  of  a  contract  made  by  his  agent,  not 
authorized  to  make  such  contract,  binds  the  principal,  as  fully  as  if 
the  agent  had  been  empowered  to  make  the  contract.  Civil  Code, 
No.  2990. »« 

Judgment  aflirmed,  plaintiff  to  pay  costs. 


GOSS  V.  STEVENS. 

(Supreme  Court  of  Minnesota,  1884.    32  Minn.  472,  21  N.  W.  549.) 

Dickinson,  J.  The  plaintiffs  seek  to  recover  a  stipulated  compen- 
sation for  their  services,  as  agents  of  the  defendant,  in  selling  real 
property  of  the  latter.  At  the  trial,  upon  the  plaintiff's  case  being 
closed,  the  court  dismissed  the  action.  The  appeal  is  from  an  order 
refusing  a  new  trial. 

It  appeared  upon  the  trial  that  the  defendant,  by  a  written  memoran- 
dum, authorized  the  plaintiffs  to  sell  for  him  a  certain  tract  of  land 
upon  terms,  as  to  price  and  manner  of  payment,  particularly  set  forth ; 
and  promised,  upon  sale  of  the  property,  to  pay  plaintiffs  a  stated  com- 
mission. The  evidence  went  to  show  that  after  this  authorization  the 
plaintiffs  agreed  with  certain  parties  (Avery  and  Walters)  for  the 
sale  of  the  property  to  them,  upon  terms  materially  different  from 
those  prescribed  by  the  defendant;  and  that  the  plaintiffs,  as  agents, 
executed  with  the  purchasers  a  writing  embodying  a  statement  of  the 
contract  of  sale,  and  a  specific  agreement,  on  the  part  of  Avery  and 
Walters,  to  purchase  the  property  on  the  terms  stated  therein.  In  the 
body  of  this  instrument  the  plaintiffs  are  recited  to  have  made  the  sale 
"as  authorized  agents,"  and  to  their  signature  are  added  the  words, 
"Agents  of  L.  H.  Stevens."  The  plaintiffs  having  proved  the  execution 
of  this  contract,  and  having  offered  evidence  going  to  show  that  the 
defendant  had  ratified  it,  offered  the  contract  in  evidence.  This  was 
rejected. 

88  "That  the  effect  of  ratification  as  to  the  principal  is  to  bind  him  by  the 
act,  whether  it  be  for  his  detriment  or  his  advantage,  and  whether  it  be 
foundfid  on  a  tort  or  a  contract,  to  the  same  extent  as  by,  and  with  all  the 
consequences  that  follow  from,  tiie  same  act  done  by  his  previous  authority," 
is  held  by  Tindal,  C.  J.,  in  Wilson  v.  Tuminan,  ante.  p.  8.5.  Soe,  also,  Brock 
V.  .Tones,  16  Tex.  461  (1856);  Hunter  v.  Cobe,  84  Minn.  187,  87  N.  W.  612 
(1901) ;  Lee  v.  Fontaine,  10  Ala.  I'jo,  44  Am.  Dec.  505  (1840) ;  Walker  v.  Walker, 
5  Ileisk.  (Tenn.)  425  (1871 1.  And,  in  general,  it  matters  not  whether  the  agent 
used  his  name,  or  that  of  his  principal,  so  long  as  the  bargain  as  carried  out 
was  ratified  by  the  principal.  Campbell,  J.,  in  Stansell  v.  Leavltt,  51  Mich. 
536,  16  N.  W.  892  (1883). 


iJ^J'^ 


Ch.  4)  CREATION    OF    THE    RELATION  197 

We  think  the  court  erred. ^^  There  was  abundant  evidence  to  entitle 
the  plaintiffs  to  go  to  the  jury  upon  the  question  of  ratification,  going 
to  show  that  the  defendant,  after  he  had  been  advised  as  to  the  terms 
of  the  contract  which  had  been  made  by  his  agents  in  his  behalf,  ac- 
quiesced in  and  confirmed  their  acts.  Since  the  agents  might  have  been 
orally  authorized  to  make  the  sale  (Brown  v.  Eaton,  21  Minn.  409; 
Dickerman  v.  Ashton,  21  Minn.  538),  their  unauthorized  acts  done  in 
defendant's  behalf  might  be  ratified  in  any  manner  expressing  his  as- 
sent thereto.  It  was  not  necessary  that  the  ratification  be  in  writing. 
Brown  v.  Eaton,  21  Minn.  409,  410.  Ratification  of  the  unauthorized 
sale  would  relate  back  to  the  acts  of  the  agent  and  be  equivalent  to 
prior  authority.  Stewart  v.  Mather,  32  Wis.  344;  Nesbitt  v.  Helser, 
49  Mo,  383. 

This  contract,  if  ratified  by  the  defendant  so  as  to  cure  the  variance 
from  the  prescribed  terms  of  sale,  would  have  been  prima  facie  proof 
of  the  plaintiffs'  right  to  recover.  It  bound  the  purchasers  to  take  the 
property  upon  the  terms  stated,  and  this  constituted  a  sale  of  the  prop- 
erty within  the  meaning  of  the  agreement  between  the  plaintiffs  and 
the  defendant.  Goss  v.  Broom,  31  Minn.  484,  18  N.  W.  290;  Rice  v. 
Mayo,  107  Mass.  550.  The  contract  bears  upon  its  face  the  character 
of  a  contract  between  the  plaintiffs'  principal,  executed  through  them 
as  agents,  and  the  purchasers.  In  an  action  upon  the  contract  parol 
evidence  would  be  admissible,  if  any  proof  was  necessary,  to  disclose 
the  defendant  as  the  principal  in  whose  behalf  the  contract  was  made. 
Rowell  V.  Oleson,  32  Minn.  288,  20  N.  W.  227,  and  cases  cited.  Hav- 
ing bound  the  parties  by  an  authorized  contract,  any  inability  or  re- 
fusal of  the  principal  to  consummate  the  contract  which  he  had  au- 
thorized should  not  affect  the  agents'  right  to  compensation.  Mooney 
v.  Elder,  56  N.  Y.  238;  Delaplaine  v.  Turnley,  44  Wis.  31 ;  Phelan  v. 
Gardner,  43  Cal.  306 ;  Nesbitt  v.  Helser,  49  Mo.  383. 

The  order  refusing  a  new  trial  is  reversed,  and  a  new  trial  awarded. 


DEMPSY  v.  CHAMBERS.  /  / 


(Supreme  Judicial  Court  of  Mas.sachusetts,  1891.    154  Mass.  330,  26  N.  E.  279, 
13  L.  R.  A.  219,  20  Am.  St.  Kep.  219.) 

Holmes,  J.  This  is  an  action  of  tort  to  recover  damages  for  the 
breaking  of  a  plate-glass  window.  The  glass  was  broken  by  the  neg- 
ligence of  one  McCullock  while  delivering  some  coal  which  had  been 
ordered  of  the  defendant  by  the  plaintiff.  It  is  found  as  a  fact  that 
McCullock  was  not  the  defendant's  servant  when  he  broke  the  window, 
but  that  the  "delivery  of  the  coal  by    [him]   was  ratified  by  the  de- 

"»  After  ratifiratlon,  the  iirliiciiial  eaiiiiot  hold  tlie  ap'iit  for  not  perfoniiiiiK 
fhe  act  MS  lie  was  iiiit  lK)ri7,<'d.  I!i'  fiitilicd  the  act  an  it  uns  ihmr,  and  released 
the  agent  fr(»in  liability  for  disolM-diciice  to,  or  departure  from,  his  authority. 
ilenken.s  v.  Watson.  27  Mo.  163  (185S). 


198  THE  ur.LATiON  (Parti 

feiidaiit,  and  tliat  such  ratificatitMi  nuulc  McCullook  in  law  the  agent 
and  servant  of  tlie  defendant  in  the  delivery  of  the  coal."  On  this 
finding  the  court  ruled  "that  the  defendant,  hy  his  ratification  of  the 
delivery  of  the  coal  hy  jMcCullock,  hecanie  responsihle  for  his  neg- 
ligence in  the  delivery  of  the  coal."^"**  The  defendant  excepted  to  this 
ruling,  and  to  nothing  else.  We  must  assume  that  the  finding  was  war- 
ranted hy  the  evidence,  a  majority  of  the  court  being  of  the  opinion 
that  the  hill  of  excejitions  does  not  purport  to  set  forth  all  the  evi- 
dence on  which  the  finding  was  made.  Therefore  the  only  question  be- 
fore us  is  as  to  the  correctness  of  the  ruling  just  stated. 

If  we  were  contriving  a  new  code  to-day  we  might  hesitate  to  say 
that  a  man  could  make  himself  a  party  to  a  bare  tort  in  any  case  mere- 
ly by  assenting  to  it  after  it  had  been  committed.  But  we  are  not  at 
liberty  to  refuse  to  carry  out  to  its  consequences  any  principle  which 
we  believe  to  have  been  part  of  the  common  law  simply  because  the 
grounds  of  policy  on  which  it  must  be  justified  seem  to  us  to  be  hard 
to  find,  and  probably  to  have  belonged  to  a  different  state  of  society. 

It  is  hard  to  explain  why  a  master  is  liable  to  the  extent  that  he  is 
for  the  negligent  acts  of  one  who  at  the  time  really  is  his  servant,  act- 
ing within  the  general  scope  of  his  employment.  Probably  master  and 
servant  are  "feigned  to  be  all  one  person"  by  a  fiction  which  is  an  echo 
of  the  patria  potestas  and  of  the  English  frankpledge.  Byington  v. 
Simpson,  134  Mass.  169,  170,  45  Am.  Rep.  314;  Fitzh.  Abr.  "Corone," 
pi.  428.  Possibly  the  doctrine  of  ratification  is  another  aspect  of  the 
same  tradition.  The  requirement  that  the  act  should  be  done  in  the 
name  of  the  ratifying  party  looks  that  way.  New  England  Dredging 
Co.  V.  Rockport  Granite  Co.,  149  Alass.  381,  382,  21  N.  E.  947;  Fuller 
&  Trimwell's  Case,  2  Leon.  215,  216;  Sext.  Dec.  5,  12;  De  Reg.  Jur. 
Reg.  9;   D.  43,  26,  13;  D.  43,  16,  1,  §  14,  gloss.,  and  cases  next  cited. 

The  earliest  instances  of  liability  by  way  of  ratification  in  the  Eng- 
lish law,  so  far  as  we  have  noticed,  were  where  a  man  retained  prop- 
erty acquired  through  the  wrongful  act  of  another.  Y.  B.  30  Edw.  I. 
128  (Roll's  Ed.;)  38  Lib.  Ass.  223,  pi.  9;  vS.  C.  38  Edw.  III.  18;  12 
Edw.  IV.  9,  pi.  23;  Plowd.  8  ad  fin.  27,  31.  See  Bract.  158b,  159a, 
171b.  But  in  these  cases  the  defendant's  assent  was  treated  as  relat- 
ing back  to  the  original  act,  and  at  an  early  date  the  doctrine  of  rela- 
tion was  carried  so  far  as  to  hold  that,  where  a  trespass  would  have 

100  Acc-eptiince,  with  knowledge  of  the  circumstances,  of  the  fruits  of  an  act 
in  perfonuini;  wiiicli  the  a^ent  coinniitted  an  assault,  makes  the  iirincii)al  lia- 
ble for  the  tort,  and  liable  in  punitive  damages.  Avakian  v.  Noble.  121  Cal. 
210,  53  I'ac.  559  (1898).  Rut  not  if  the  principal,  when  accepting  the  avails, 
had  no  knowledge  of  the  culpable  act  of  the  agent.  Marsh  v.  .Joseph,  [18!)7|  1 
Ch.  21.3,  CO  L.  .7.  Ch.  128,  75  L.  T.  Rep.  N.  S.  558,  45  W.  R.  200.  Nor  if  the 
tort  was  not  done  for  the  benelit  of  the  principal.  Moore  v.  Rogers,  51  N.  C. 
(0  Jones)  207  (18.50),  (juoting  Lord  Coke:  "He  that  receiveth  a  tresi)asser  and 
agreeth  to  a  tres]»ass  after  it  is  done  is  no  trespasser,  unless  the  trespass  was 
done  to  his  use  or  for  his  benelit,  and  then  his  agreement  subse(iuent  amonnt- 
eth  to  a  commandment;  for  in  that  omnis  ratihabitio  retrotrahitur,  et  mau- 
dato  sef|Uiparatur."     4  lust.  317;    Broom's  Legal  Maxims,  '.\S'i. 


,^/ 


lji^yyJLy> 


V; 


Ch.  4)  /  v'  CREATION    Ofi'   THE    RELATION  199 

been  justified  if  it  had  been  done  by  the  authority  by  which  it  purport- 
ed to  have  been  done,  a  subsequent  ratification  might  also  justify  it. 
Y.  B.  7  Hen.  IV.  34,  pi.  1.  This  decision  is  qualified  in  Fitzh.  Abr. 
"Bayllye,"  pi.  4,  and  doubted  in  Brooke,  Abr.  "Trespass,"  pi.  86,  but 
it  has  been  followed  and  approved  so  continuously  and  in  so  many 
later  cases  that  it  would  be  hard  to  deny  that  the  common  law  was 
as  there  stated  by  Chief  Justice  Gascoigne.  Godb.  109,  110,  pi.  129; 
2  Leon.  196,  pi.  246;  Hull  v.  Pickersgill,  1  Brod.  &  B.  282;  Muskett 
V.  Drummond,  10  Barn.  &  C.  153,  157;  Buron  v.  Denman,  2  Exch.  167, 
178;  Secretary  of  State  v.  Sahaba,  13  Moore,  P.  C.  22,  86;  Cheetham 
v.  .Mayor,  etc.,  L.  R.  10  C.  P.  249 ;  Wiggins  v.  U.  S.,  3  Ct.  CI.  412. 

If  we  assume  that  an  alleged  principal,  by  adopting  an  act  which  was 
unlawful  when  done  can  make  it  lawful,  it  follows  that  he  adopts  it 
at  his  peril,  and  is  liable  if  it  should  turn  out  that  his  previous  com- 
mand would  not  have  justified  the  act.  It  never  has  been  doubted  that 
a  man's  subsequent  agreement  to  a  trespass  done  in  his  name  and  for 
his  benefit  amounts  to  a  command  so  far  as  to  make  him  answerable. 
The  ratihabitio  mandato  comparatur  of  the  Roman  lawyers  and  the 
earlier  cases  (D.  46,  3,  12,  §  4;  D.  43,  16,  1,  §  14;  Y.  B.  30  Edw.  I. 
128)  has  been  changed  to  the  dogma  aequiparatur  ever  since  the  days 
of  Lord  Coke.  4  Inst.  317.  See  Brooke,  Abr.  "Trespass,"  pi.  113,  Co. 
Litt.  207a;  Wing.  Alax.  124;  Com.  Dig.  "Trespass,"  C.  1;  Railway 
Co.  V.  Broom,  6  Exch.  314,  326,  327,  and  cases  hereafter  cited. 

Doubts  have  been  expressed,  which  we  need  not  consider,  whether 
this  doctrine  applied  to  a  case  of  a  bare  personal  tort.  Adams  v.  Free- 
man, 9  Johns.  117,  118;  Anderson  and  Warberton,  JJ.,  in  Bishop  v. 
Montague,  Cro.  Eliz.  824.  If  a  man  assaulted  another  in  the  street 
out  of  his  own  head,  it  would  seem  rather  strong  to  say  that  if  he 
merely  called  himself  my  servant,  and  I  afterwards  assented,  without 
more,  our  mere  words  would  make  me  a  party  to  the  assault,  although 
in  such  cases  the  canon  law  excommunicated  the  principal  if  the  as- 
sault was  upon  a  clerk.  Sext.  Dec.  5,  11,  23.  Perhaps  the  application 
of  the  doctrine  would  be  avoided  on  the  ground  that  the  facts  did  not 
show  an  act  done  for  the  defendant's  benefit,  (Wilson  v.  Barker,  1 
Xev.  &  M.  409,  4  Barn.  &  Adol.  614;  Smith  v.  Lozo.  42  Mich.  6.  3 
N.  W.  227 ;)  as  in  other  cases  it  has  been  on  the  ground  that  they  did 
not  amount  to  such  a  ratification  as  was  necessary,  (Tucker  v.  Jerris, 
75  Me.  184;   Hyde  v.  Cooper,  26  Vt.  552.) 

But  the  language  generally  used  by  judges  and  text-writers,  and 
such  decisions  as  we  have  been  able  to  find,  is  broad  enough  to  cover 
a  case  like  the  present,  when  the  ratification  is  established.  Perley  v. 
Georgetown,  7  Gray,  464;  Ilisho])  v.  Montague.  Cro.  Eliz.  824;  Sander- 
son V.  P.aker.  2  W.  P>1.  832.  3  Wils.  309;  i'.arker  v.  Braham.  2  W.  Bl. 
866.  868,  3  Wils.  368;  I'.aflkiu  v.  Powell.  Cr)wp.  476.  479;  Wilson  v. 
Tumman.  6  Man.  &  G.  236.  242;  Lewis  v.  Read,  13  Moes.  &  W.  834: 
Buron  v.  Denman,  2  Exch.  167.  188;  I'.ird  v.  I'.rown,  4  Exch.  786.  799; 


aAA- 


J 


J. 


'200  Tin:  UKLATION  (Parti 

Raihvay  Co.  v.  Broom,  6  T\xcli.  314.  v^26.  327;  Roe  v.  Railway  Co.,  7 
Exch.  36,  42,  43;  Ancona  v.  Marks.  7  I  lurl.  &  N.  686,  695;  Condit  v. 
Baldwin,  21  N.  Y.  219,  225,  78  Am.  Dec.  137;  Exmn  v.  Brister,  35 
Miss.  391;  Railway  Co.  v.  Donahoe,  56  Tex.  162;  Murray  v.  Love- 
jov,  2  Cliff.  191,  195,  Fed.  Cas.  No.  9,963.  Sec  Lovcjoy  v.  Murray, 
3  Wall.  1,  9,  18  L.  Ed.  129;  Story,  Ag.  §§  455,  456. 

The  question  remains  whether  the  ratification  is  established.  As  we 
understand  the  bill  of  exceptions,  McCullock  took  on  himself  to  de- 
liver the  defendant's  coal  for  his  benefit,  and  as  his  servant,  and  the 
defendant  afterwards  assented  to  McCullock's  assumption.  The  rat- 
ification was  not  directed  specifically  to  McCullock's  trespass,  and  that 
act  was  not  for  the  defendant's  benefit,  if  taken  by  itself,  but  it  was  so 
connected  with  McCullock's  employment  that  the  defendant  would 
have  been  liable  as  master  if  McCullock  really  had  been  his  servant 
when  delivering  the  coal.  We  have  found  hardly  anything  in  the  books 
dealing  wath  the  precise  case,  but  we  are  of  opinion  that  consistency 
with  the  whole  course  of  authority  requires  us  to  hold  that  the  de- 
fendant's ratification  of  the  employment  established  the  relation  of 
master  and  servant  from  the  beginning,  with  all  its  incidents,  includ- 
ing the  anomalous  liabilitv  for  his  negligent  acts.  See  Coomes  v. 
Houghton,  102  Mass.  211,  213,  214;  Cooley,  Torts,  128,  129. 

The  ratification  goes  to  the  relation,  and  establishes  it  ab  initio.  The 
relation  existing,  the  master  is  answ^erable  for  torts  which  he  has  not 
ratified  specifically,  just  as  he  is  for  those  which  he  has  not  command- 
ed, and  as  he  may  be  for  those  which  he  has  exftessly  forbidden.  In 
Gibson's  Case,  Lane,  90,  it  was  agreed  that  if  strs.igers,  as  servants 
to  Gibson,  but  without  his  precedent  appointnLent,  had  seized  goods  by 
color  of  his  office,  and  afterward"^  had  misused  the  goods,  and  Gibson 
ratified  the  seizure,  he  thereby  became  a  trespasser  ab  initio,  although 
not  privy  to  the  misusing  which  made  him  so ;  and  this  proposition  is 
stated  as  law  in  Com.  Dig.  "Trespass,"  C.  1 ;  Elder  v.  Bemis,  2  Mete. 
(Mass.)  599,  605.  In  Coomes  v.  Houghton,  102  Mass.  211,  the  alleged 
servant  did  not  profess  to  act  as  servant  to  the  defendant,  and  the 
decision  was  that  a  subsequent  payment  for  his  work  by  the  defendant 
would  not  make  him  one. 

For  these  reasons,  in  the  opinion  of  a  majority  of  the  court,  the  ex- 
ceptions must  be  overruled.    Exceptions  overruled. 


^.'-■ 


Ch.  4)  CREATION    OF    TIIK    KRLATION  201 


(E)  As  to  Third  Person 

FARMERS'  LOAN  &  TRUST  CO.  v.  MEMPHIS  &  C.  R.  CO. 
(Circuit  Court  of  the  United  States,  W.  D.  Tennessee,  1S97.     S3  Fed.  870.) 

LuRTON,  Circuit  Judge.^"^  This  is  a  bill  under  which  it  is  sought 
to  foreclose  a  mortgage  styled  the  "first  consolidated  mortgage"  of 
the  Memphis  S:  Charleston  Railroad  Company.  It  was  intended  that 
two  older  series  of  bonds  would  be  retired  by  bonds  secured  here- 
under. In  part  this  has  been  done,  though  not  altogether.  It  is  there- 
fore sought  to  sell  subject  to  the  lien  of  the  senior  outstanding  mort- 
gages. This  consolidated  mortgage  w-as  made  August  20,  1877,  to 
secure  an  issue  of  bonds  aggregating  $4,700,000.  Of  these  only  $2,- 
264,000  have  been  actually  issued.  The  remainder  are  in  the  hands 
of  the  trustee,  and  held  for  the  purpose  of  taking  up  outstanding  first 
and  second  mortgage  bonds.  These  consolidated  bonds  mature  Jan- 
uary 1,  1915,  and  have  annexed  coupons  for  interest,  payable  each 
recurring  six  months.  The  case  comes  on  now  to  be  heard  upon 
the  pleadings  and  proof,  and  a  final  decree  of  foreclosure  is  sought, 
both  for  principal  and  interest.  The  right  to  such  a  decree  is  predi- 
cated upon  a  default  in  the  payment  of  interest  accruing  July  1,  1893, 
January  1,  1894,  July  1,  1894,  January  1,  1895,  and  July  1,  1895;  this 
bill  having  been  filed  August  2,  1895. 

The  bill  particularly  alleges  that  demand  had  been  made  for  the 
payment  of  the  interest  accruing  July  1,  1893,  and  that  payment  was 
refused ;  that  this  default  continued  for  more  than  60  days  after  such 
demand;  that  thereupon  holders  of  more  than  one-third  in  value  of 
the  outstanding  bonds  had,  by  an  instrument  in  writing,  filed  with 
the  trustee,  elected  that  the  principal  of  the  said  bonds  should  imme- 
diately become  payable,  and  requiring  the  trustee  to  foreclose  the  mort- 
gage.    ♦     *     * 

The  principal  objection  urged  against  a  decree  of  foreclosure  for 
the  principal  of  the  mortgage  debt  turns  upon  the  authority  of  one 
D.  Willis  James  to  sign  the  declaration  of  maturity  for  his  wife,  who 
owned  four  bonds  of  $1,000  each,  and  for  two  brothers,  each  owning 
twenty  bonds  of  $1,000  each.  Mr.  James  signed  the  names  of  his 
wife  and  brothers  by  himself  as  attorney.  The  defendants  say  that 
he  was  not  the  "attorney  in  fact  thereto  duly  authorized''  of  the  said 
signers,  and  that,  if  these  names  be  eliminated,  a  valid  election  by 
one-third  in  value  of  all  outstanding  bonds  has  not  been  declared. 
It  clearly  appears  that  Mr.  James  had  a  general  parol  autliority  from 
his  wife  ancl  brothers  to  act  for  them  as  he  deemed  best  in  respect 
to  the  management  and  disposition  of  these  securities.  But  it  is  also 
admitted  that  he  had  no  written   letter  of  attorney  particularly  au- 

101  Part  of  the  opinion  is  omitted. 


202  Tin:  kki.ation  (Tart  1 

thorizing  him  to  do  this  act.  That  these  persons  owned  the  honds 
for  which  their  names  are  signed  is  snlViciently  made  out  hy  the  gen- 
eral statement  to  that  effect  in  Mr.  James'  deposition.  Being  wholly 
undisputed,  we  see  no  reason  for  inquiring  into  the  source  of  his  in- 
formation. 

After  tlie  IIHng  of  this  hill,  these  persons,  in  writing,  formally  con- 
firmed and  ratified  the  act  of  D.  \\^illis  James  in  making  the  declara- 
tion of  maturity  now  in  question.  If  the  legal  effect  of  this  ratifica- 
tion is  to  put  the  agent  in  same  position  as  if  he  had  had  authority  to 
do  the  act  when  done,  there  is  no  necessity  for  considering  the  ques- 
tion at  the  bar  as  to  the  meaning  of  the  provision  in  the  mortgage 
touching  the  election  of  holders  of  bonds  through  "attorneys  in  fact 
thereto  duly  authorized."  The  general  doctrine  in  respect  of  the  rat- 
ification of  the  acts  of  one  assuming  without  authority  to  act  for 
another  is  that  a  subsequent  "ratification  operates  upon  the  act  rati- 
fied precisely  as  though  the  authority  to  do  the  act  had  been  previously 
given."  Cook  v.  Tullis,  8  Wall.  338,  21  L.  Ed.  933.  "In  short,"  says 
Justice  Story,  "the  act  is  treated  throughout  as  if  it  were  originally 
authorized  by  the  principal,  for  the  ratification  relates  back  to  the  time 
of  the  inception  of  the  transaction,  and  has  a  complete  retroactive 
efficacy,  or,  as  the  maxim  expresses  it,  'Omnis  ratihabitio  retrotrahi- 
tur.'  "    Story,  Ag.  §  244.  j 

The  principle  is  clearly  stated  in  the  well-coneidered  case  of  Wilson 
V.  Tumman,  6  Man.  &  G.  236,  where  it  is  saidi  "An  act  done  for  an- 
other by  a  person  not  assuming  to  act  for  himself,  but  for  such  other 
person,  though  without  any  precedent  authority  whatever,  becomes 
the  act  of  the  principal,  if  subsequently  ratified  by  him.  In  such  case 
the  principal  is  bound  by  the  act,  whether  it  be  for  his  detriment  or 
advantage,  and  whether  it  be  founded  on  a  tqrt  or  on  contract,  to  the 
same  extent,  and  with  all  the  same  consequences,  which  follow  from 
the  same  act  done  by  his  previous  authority." 

Counsel  for  defendants  seek  to  take  this  case  without  the  general 
eft'ect  of  ratification  by  an  application  of  the  not  very  clear  statement 
of  a  limitation  found  in  section  246  of  Story  on  Agency,  where  it  is 
said  that  third  persons  will  not  be  bound  by  the  retrospective  conse- 
quences of  ratification  "if  the  act  done  by  such  person  would,  if  au- 
thorized, create  a  right  to  have  some  act  or  duty  performed  by  a  third 
person,  so  as  to  subject  him  to  damages  or  losses  for  the  nonperform- 
ance of  that  act  or  duty,  or  would  defeat  a  right  or  an  estate  already 
vested  in  the  latter."  This  limitation  is  evidently  deduced  from  such 
cases  as  Buron  v.  Denman,  2  Exch.  167,  Right  v.  Cuthell,  5  East,  491, 
and  Mann  v.  Walters,  10  Barn.  &  C.  626.  These  were  cases  of  no- 
tices given  of  the  determination  of  leases  by  unauthorized  persons  as- 
suming to  be  agents  of  the  landlord.  That  Judge  Story  bases  his  text 
upon  that  class  of  cases  is  not  only  evident  from  the  cases  cited  in 
the  notes  to  the  text,  but  from  the  stronger  fact  that  he  illustrates 
the  meaning  of  an  otherwise  cloudy   statement   by   the  illustration : 


/ 


Ch.  4)  CREATION  OF  THE  RELATION  203 

*'Thus,  if  a  lease  contains  a  condition  that  it  may  be  determined  by 
either  party  upon  six  months'  notice,  such  notice,  given  by  an  unau- 
thorized person  for  the  landlord,  although  subsequently  ratified  and 
adopted  by  the  latter,  will  not  be  a  valid  notice  to  determine  the  lease." 

The  ground  upon  which  such  cases  have  been  put  is  that  stated  in 
the  subsequent  part  of  the  section  from  which  I  have  been  quoting, 
namely,  that  a  notice  to  defeat  an  estate  should  be  such  a  one  as  that 
the  tenant  can  safely  act  upon  at  the  time  he  receives  it,  "so  that  he 
may  deliver  up  the  possession  at  the  end  of  six  months,  without  being 
liable  to  further  claims  in  respect  to  the  remainder  of  the  term."  The 
cases  upon  this  subject  have  not  been  uniform.  To  this  Judge  Story 
calls  attention  in  a  footnote.  In  Roe  v.  Pierce,  2  Camp.  96,  a  verbal 
notice  to  quit,  by  a  steward  of  a  corporation,  was  held  ratified  and 
binding  by  the  corporation  bringing  a  suit  founded  on  the  notice ;  and 
in  Goodtitle  v.  Woodward,  3  Barn.  &  Aid.  689,  the  decision  is  put 
upon  ground  quite  antagonistic  to  the  cases  first  cited.  If  such  cases 
as  Buron  v.  Denman  and  others  cited  above  are  supportable,  it  must 
be  upon  the  ground  that  the  tenant  ought  not  to  be  subjected  to  the 
hazard  of  going  out  and  remaining  liable  thereafter  because  the  land- 
lord elected  to  repudiate  the  notice  given  in  his  name.  If  not  rested 
wholly  upon  this  narrow  ground,  they  are  in  seeming  conflict  with  an 
older  line  of  cases  holding  that  an  entry  to  make  a  claim,  or  to  avoid 
a  fine,  or  for  a  condition  broken,  if  made  by  a  person  assuming  to  be 
the  agent  of  the  principal  entitled  to  such  claim  or  entry,  would  jus- 
tify an  action  upon  such  acts  by  the  principal  upon  the  ground  that 
his  subsequent  ratification  would  supply  the  want  of  an  original 
authority.  Story,  Ag.  §  245;  Co.  Litt.  258;  Fitchet  v.  Adams,  2 
Strange,  1128. 

The  distinction  between  the  class  of  cases  last  cited  and  those  of  a 
notice  to  terminate  a  lease  is  very  refined,  and,  as  observed  by  Judge 
Story  in  a  note  to  section  246  of  his  work  on  Agency,  "stands  upon 
reasoning  not  very  satisfactory  or  clear."  Judge  Story,  in  his  text, 
states  the  supposed  distinction  to  be  this :  that  in  the  latter  case  "the 
thirrl  i)erson's  act  is  not  to  depend  upon  the  validity  of  the  entry  at 
the  time  when  it  is  made."  And  so,  he  adds :  "The  rule,  'omnis  rati- 
hahitio  retrotrahitur  et  mandato  priori  aeciuiparatur,*  seems  applicable 
only  to  cases  where  the  conduct  of  the  parties  on  whom  it  is  to  op- 
erate, not  being  referable  to  any  agreement,  cannot,  in  the  meantime, 
depend  on  the  fact  whether  there  be  a  ratification  or  not." 

Counsel  for  defendants  do  not — and  I  say  it  with  deference — make 
a  proper  apjjlication  of  Judge  Story's  deduction  from  the  leasehold 
cases.  They  say,  in  their  printed  argument,  this:  "The  underlying 
principle  is  perfectly  plain.  If  A.  has  acted  as  the  agent  of  B.,  and  B. 
has  ratified  the  act  done,  and  taken  advantage  of  it,  if  C.  thereupon 
sues  B.  upon  such  act  recognizing  the  agency,  B.  and  C.  have  both 
(the  one  by  the  ratification  of,  and  tiie  other  by  his  suit,  recognizing 
the  agency)  estopped  themselves  mutually   from   denying  it.     I)Ut  if 


L'Ol  Tin:  Kiu.ATioN  (Parti 

A.,  not  being  the  agent  of  ?>.,  luulcrtako  to  act  for  him  so  as  to  allow 
B.  to  acquire  a  right  against  C,  and  B.,  by  ratification,  attempt  to 
acciuire  such  right  as  one  arising  at  the  time  A.  acted,  and  dating 
back  to  such  time,  such  ratification  is  unavailing  over  C.'s  objection. 
There  is  no  nnituality  in  the  estoppel.  Until  B.  ratified,  he  was  not 
bound,  and,  C.  having  done  no  act  to  consent  to  the  ratification  and 
recognition  of  the  unauthorized  agency  against  C.  in  invito,  the  agency 
cannot  exist  except  from  the  time  the  authority  was  actually  given. 
It  is  not  the  case  of  a  party  being  bound  by  the  ratification  of  an 
agency,  but  of  a  party  seeking  by  his  own  act  of  ratification  to  bind 
the  other  party.  A  similar  case  would  be  where  a  plaintiff  recognized 
a  person  who  was  not  defendant's  agent  as  such  agent,  while  de- 
fendant refused  to  recognize  and  ratify,  and  who  sought  to  bind  de- 
fendant by  the  acts  of  such  unauthorized  agent  because  plaintiff  had 
ratified  his  acts.  This,  of  course,  is  absurd,  but  it  is  the  reductio  ad 
absurdum  of  complainant's  position  in  this  case." 

'"But  that  the  effect  of  ratification  is  to  bind  the  other  contracting 
party  is  the  very  consequence  of  the  retrospective  effect  of  ratifica- 
tion. The  books  are  full  of  cases  in  which  the  third  party  was  held 
bound  by  a  subsequent  ratification.  Were  this  not  so,  the  act  of  "rat- 
ification would  not  be  dragged  back,  as  it  were,  and  made  equipollent 
to  a  prior  command,"  as  thd  matter  is  put  by  Baron  Martin  in  Brook 
v.  Hook,  L.  R.  6  Exch.  96.  "Thus,"  Judge  Story  says,  "the  effect  of 
ratification  is  not  only  to  bi\id  the  principal  as  to  his  agent,  but  as  to 
the  third  party,  Spd  give  the  ordinary  rights  and  remedies  both  for 
and  against  him.'Tj  Story,  Ag.  §  245. 

In  Wharton  on|.' Agency  it  is  said:  "The  third  party  contracting  is 
bound  from  the  time  of  the  institution  of  the  contract,  and  not  merely 
from  that  of  the  ratification.  The  principal,  by  the  act  of  ratification, 
puts  himself  in  his  agent's  place.  From  this  it  follows  that  the  rati- 
fication acts  retrospectively,  and  nowhere  is  this  more  unhesitatingly 
expressed  than  in  the  Roman  law.  But,"  adds  Prof.  Wharton,  "ac- 
cepting this  principle  as  unquestioned,  we  must  limit  its  application 
to  the  relations  of  the  principal  to  the  contracting  third  party.  The 
third  party  is  precluded  from  contesting  the  right  of  the  principal  to 
go  back  to  the  original  inception  of  the  contract."  Whart.  Ag.  §§ 
76,  77. 

In  the  Law  of  Contracts,  by  Leake,  at  page  391,  it  is  stated  that: 
"The  principal  may  also  claim  the  benefit  of  a  contract  professedly 
made  on  his  behalf,  and  though  it  was  made  without  his  knowledge." 

A  few  illustrations  from  leading  cases  may  serve  to  show  how  the 
retrospective  effect  of  ratification  has  found  application.  Where  con- 
tracts were  made  in  the  name  of  the  state,  but  without  authority,  a 
subsequent  ratification  was  held  to  bind  the  third  party  in  suits  upon 
the  contract.  Ohio  v.  Buttles'  Ex'r,  3  Ohio  St.  309;  Wisconsin  v. 
Torinus,  26  Minn.  1,  49  N.  W.  259,  Z7  Am.  Rep.  395 ;  Iowa  v.  Shaw, 
28  Iowa,  67.    Where  insurance  was  effected  by  an  unauthorized  agent 


CREATION  OF  THE  RELATION  205 

upon  the  interest  of  the  plaintiff  in  a  ship,  it  was  held  that  the  ratifi- 
cation of  this  act  after  the  loss  of  the  ship  was  operative,  and  made 
the  contract  binding  upon  the  insurer.  Hagedorn  v.  Oliverson,  2 
Maule  &  S.  485.  Where  an  offer  of  sale,,  made  by  C,  was  accepted 
by  B.  for  A.,  it  was  held  that  by  ratifying  the  act  of  B.,  though  after 
the  offer  had  been  withdrawn,  the  contract  was  validated  as  of  the 
date  of  the  original  acceptance,  and  that  the  intermediate  withdrawal 
was  ineffective,  and  C.  bound  by  the  contract.  Bolton  v.  Lambert, 
41  Ch.  Div.  295.  This  case  was  followed  in  Re  Portuguese  Consoli- 
dated Copper  Mines,  45  Ch.  Div.  16.  In  the  case  last  cited  certain 
shares  in  the  corporation  had  been  subscribed  for,  and  allotments 
made,  in  the  name  of  the  corporation,  by  a  board  having  no  authority. 
Subsequently  these  allotments  were  ratified  by  the  corporation  acting 
by  a  legal  board  of  directors.  It  was  held  that  the  subscribers  were 
bound,  although  they,  before  ratification,  had  withdrawn  their  sub- 
scriptions. That  Mr.  James'  principals  did  not  ratify  his  act  until 
after  this  bill  was  filed  seems  of  no  importance  if  the  ratification  is 
to  be  given  a  retrospective  effect.  \\'^here  a  bill  was  indorsed  to  one 
Ancona,  and  a  suit  brought  in  his  name  as  plaintiff  by  one  assuming 
to  be  his  agent,  it  was  held  that  Ancona's  ratification,  after  suit 
brought,  of  what  had  been  done  before,  was  equivalent  to  a  prior  au- 
thority.   Ancona  v.  Marks,  7  Hurl.  &  N.  686. 

These  cases  abundantly  illustrate  what  is  meant  by  the  ratification 
being  equivalent  to  a  prior  command,  and  serve  to  show  that  the  ef- 
fect is  not  only  to  bind  the  principal  ratifying  the  act,  but  also  the 
other  contracting  party.  There  are  exceptions  to  this  rulfe,  such  as 
have  been  mentioned  by  both  Story  and  Wharton,  namely/  it  will  not 
be  permitted  to  defeat  an  estate /tested  in  the  third  party]  as  in  Lyell 
V.  Kennedy,  18  Q.  B.  Div.  796/ and  it  will  not  be  suft'ercd  to  affect 
innocent  strangers  who  nave  aq^uired  intervening  rights  by  levy,  at-  , 
tachment,  or  otherwise.  (Wood  v.  McCain,  7  Ala.  806,  42  Am.  "Dot.  "-^MU  r  | 

612;   Whart.  Ag.  §§  77/79;    Taylor  v.  Robinson,  14  Cal.  396.     Ccr-  * 

tainly  neither  the  railroad  company  nor  the  junior  mortgagee  have  ac- 
quired any  intervening  rights  to  be  affected  by  ratification,  and  it  is 
not  pretended  that  its  eft'ect  will  be  to  defeat  any  vested  estate.  Nei- 
ther can  it  be  said  that  the  conduct  of  the  railroad  company,  on  whom 
ratification  is  to  operate,  depended  in  the  meantime  on  whether  there 
would  be  ratification  or  not.  The  holders  of  these  bonds  had  an  op- 
tion to  mature  the  principal  according  as  they  should  deem  best.  That 
option  arose  out  of  the  default  of  the  railroad  comiiany  in  respect  of 
interest.  When  that  default  was  suffered  to  continue  for  60  days 
after  demand,  the  option  arose,  and  could  only  be  cut  off  by  payment 
before  a  declaration  of  maturity. 

The  coupon  in  respect  to  which  the  original  bill  made  a  definite 
statement  of  demand  was  paid,  but  not  until  after  the  declaration 
of  maturity,  which  declaration  operated,  when  filed  with  the  trustee, 
to  mature  the  principal.     It  follows,  therefore,  that  payment  of  that 


n\ 


«.4^t(^v 


/ 


1 


V 


t^LH-  f 


^/(/ai*r~ 


-OG  TiiK  itKi.ATioN  (Parti 

coupon  dill  not  defeat  the  suit,  for  llie  wiiolc  debt  was  due  and  un- 
paid, except  the  coupon  of  July,  1893.  Iktwecn  the  fiUng  of  the  in- 
strument of  maturity  and  tlie  time  of  ratification  the  debtor  company 
did  nothing,  auil  incurred  no  loss,  risk,  or  danger.  The  instrument 
purported  to  be  signed  by  one  authorized  to  act  for  those  whose  names 
he  signed.  It  was  an  act  clearly  in  the  interest  of  those  for  whom  he 
assumed  to  act.  and  its  ratification  could  not  possibly  work  a  surprise. 
It  was  only  a  matter  of  evidence  whether  James  had  authority  to 
sign  for  his  wife  and  brothers,  and  "proof  of  subsequent  ratification 
is  sut'licient,  and  dispenses  with  proof  of  i)rior  authority,  th6ugh  the 
prior  authority  is  reijuired  to  be  in  writing  or  under  seal."'  L,eake, 
Cont.  pp.  388-391 ;  Tupper  v.  Foulkcs,  9  C.  B.  (N.  S.)  797';  Bolton 
V.  Lambert,  41  Ch.  Div.  295. 

Commenting  on  the  conflict  we  have  referred  to  in  an  earlier  part 
of  this  opinion,  Prof.  Wharton  says,  at  section  80  of  his  Commentaries 
on  Agency:  "The  true  distinction  seems  to  be  this:  If  ratification 
on  part  of  principal  was  an  act  to  be  anticipated  as  morally  certain 
by  parties  having  adverse  interests,  then  the  ratification  is  no  sur- 
prise to  them,  and  cannot  mislead  them,  and  they  are  bound  to  treat 
the  original  unauthorized  act  as  one  which  is  to  be  authorized."; 

Applying  this  to  the  defendants,  they  must  be  regarded  a^  bound 
by  the  ratification  which,  in  view  of  the  relationship  borne  by  D.  Wil- 
lis James  to  those  he  assumed  to  represent,  and  the  obvious  interest 
they  have  in  ratifying  what  he  did,  can  be  no  surprise  to  them.     In 
this  view  of  the  case,  it  becomes  unnecessary  to  say  whether  this  bill 
might  be  maintained  as  a  bill  to  foreclose  for  interest  alone,  or  how 
it  might  be  maintained  as  a  bill  filed  under  the  discretion  of  the  trustee. 
I       Ratification  operating  as  an  original  command,  the  bill  is  well  filed, 
/  and  a  decree  of  foreclosure  may  be  drawn,  unless  within  a  short  time 
/   the  defendant   company   shall   discharge   both  principal   and   interest 
'    of  the  mortgage  debt.^°^ 

102  Accord:     Kelley  v.  Munson,  7  Mass.  .319,  5  Am.  Dec.  47  (ISll).     Dodge 

■  V.  Hopkins,  14  "Wis.  fioO  (1S<;1),  is  tho  leading  case  for  tbe  doctrine  that  rati- 

ficatiou  by  the  principal  will  not  bind  the  third  person  without  a  sniiseciueut 

as.seut  by  him,  because  of  want  of  mutuality.     The  principal  before  ratitica- 

tion  being  free  to  repudiate  or  to  assent,  the  third  person  must  be  equally  free, 

,     and  cannot  be  bound  by  the  unilateral  act  of  the  princii)al  alone. 

In  England  it  has  been  held  that  the  maxim  of  ratilication  holds.  By  rati- 
fication the  agreement  relates  back  and  is  the  same  as  though  it  had  been 
previously  authorized,  binding  principal  and  third  pers(jn  alike.  I'.olton  Part- 
ners V.  Lambert,  5S  L.  J.  Ch.  425,  41  Ch.  D.  295,  GO  L.  T.  Itep.  GS5,  :J7  W.  K. 
434  (188S). 

In  McClintock  v.  South  Penn  Oil  Co.,  146  Pa.  144,  23  Atl.  211,  28  Am.  St. 
Rep.  785  (1892),  a  more  eiiuitalile  and  practical  rule  was  laid  down.  The  Wis- 
^consin  case  presses  too  far  tue  doctrine  of  mutuality.  In  any  contract  there 
must  be  an  interval  between  offer  and  acceptance  when  one  imrty  is  bound 
A  y~and  the  other  is  free.  The  English  rule  presses  the  maxim  too  far.  Ratilica- 
tion  is  not  always  the  same  in  effect  as  a  previous  authorization.  Substantial 
justice  is  done  both  parties  if  the  third  person  may,  up  to  the  time  of  ratifica- 
tion, but  not  after,  withdraw  from  his  agreement.  If  he  has  not  withdrawn, 
and  the  principal  ratifies,  the  parties  will  then  occupy  the  same  position  as 
though  there  had  been  pre\ious  authority.     There  are  logical  difficulties  in 


4. 


J 


Iloore  V.  Stone, 
ts: 

Action  to  recover  certain  1^^  d  which  Tstf . 
pimed  under  a  t^x  deed,  and  def.  by  conveyance 
om  one  Scarlett,  Sc'=*r.  h®d  employed  -otf.  to  "buy 
nd  and  had  r)«id  him  '='■    commission  for  his  services 
ter  D-'^ying  -J-  the  purchase  price  and  receiving 
contract  for  a  deed  uDOn  p-yment  of  the  bPLL-^ter 
ndor  sent  deed  to  -otf.  to  b©  delivered  to  Scarlet 
on  such  -oayt .  Mepnwhile  "otf.  h«d  bought  some  thou 
Qds  of  ^cres  of  land  at  tax  sale,  including  the 
Qd  in  question,  but  he  had  not  noticed  this  fact, 
d  did  not  mention  it  to  Scarlet  when  he  delivered 
e  deed* 
rt: 

Th¥E«gency  w^s  termin*=ted  here  when  Dtf. 
livered  to  Scarlet  the  contract  for  conve^rance 

the  I'^nd  uT)on  receiT>t  of  ^.the  •nurch^'se  money, 
a  the  nr-Tierit  of  the  fees  for  the  service  nerfor- 
fl.  They  h^d  inerformed  the  business  for  which  the 
ency  h*^*^  "^een  constituted,  nnd  by  OT)er«"tion  of 
»p  the  rpe^.c"  ws  terminated.  Holding  the  deed  to 

rielivere'^  to  Sc^rlet  did  not  revive  the  rp-ency, 

t'-^ey  rere  hired  by  Kveret,  not  Scarlet-  Ptf, 
B  not  ruilt."  of  Bny   fr-ud  ^e  in  f*^iling  to  disci 
b  the  f«^ct  of  the  t^x   ■nurch'^se.  They  owed  no  duty 

Scrlet  to  ro  do, 

VEKDICT  FOR  PTF. 


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YJ^J3'b  0x1  &«wo  '^erfT   M^Q-'^nox^cr  x-^^t   ©rf-J  "^o   ito^i:  ©  " 

.ob   o<?   o-t    d"©lT: 

•  '5T5  ne'e:  ToiarrsY 


V. 


Ch.  5)  TERMINATION  OF  THE  RELATION  Z.)  fQj[jH^'       207        f..  #V'^^  «- 


CHAPTER  V  ^'"-tty 

TERMINATION  OF  THE  RELATION 


SECTION  1.— BY  ACT  OF  THE  PARTIES 
I.  By  AccoMPLisiniEXT  of  the;  Purpose 

-/ 

AIOORE  V.  STONE.  ■      * 

(Supreme  Court  of  Iowa,  1ST5.     40  Iowa,  259.) 

Action  to  recover  certain  land  which  Moore  claimed  under  a  tax 
deed,  and  Stone  by  conveyance  from  one  Scarlett.  Scarlett  had  em- 
ployed ]\Ioore  to  purchase  the  land  and  had  paid  him  a  commission  for 
his  services,  after  paying  one-half  the  purchase  price  and  receiving  a 
contract  for  a  deed  upon  payment  of  the  balance.  Later  the  vendor 
sent  the  deed  to  Aloore  to  be  delivered  to  Scarlett  upon  payment  of 
the  balance.  Meantime  Moore  had  purchased  some  thousands  of 
acres  of  land  at  tax  sale,  including  the  land  in  question,  but  he  had 
not  noticed  this  fact,  and  of  course  did  not  mention  it  to  Scarlett  when 
later  he  delivered  the  deed.  Defendant  claimed  Moore  was  his  agent, 
and  could  not  set  up  this  deed  against  his  principal.  Decree  for  de- 
fendants. 

Miller,  C.  J.^  [After  stating  the  facts:]  *  *  *  Upon  these 
facts  it  is  quite  clear  that  the  agency  of  the  plaintiff,  or  of  Aloore  & 
Mclntire,  for  the  purchase  of  the  land  for  Scarlett,  terminated  at  the 
time  they  delivered  to  him  the  written  contract  for  a  conveyance  of  the 
land  on  the  receipt  of  the  one-half  of  the  purchase  money,  and  the 
j)aymcnt  of  their  fees  for  the  services  performed.  When  this  was 
accomplished  Moore  &  Mclntire  had  done  all  that  they,  or  the  plain- 
tiff, had  been  employed  to  do.  They  had  made  the  purchase  as  Scarlett 
had  desired  them  to  do,  delivered  to  him  the  written  contract  sent  to 

any  solution  of  tliis  anonijilous  act,  liut  iinu-linilly  this  .solution  .seems  s.-ttis- 
fiiflory.  (\2  Ci'ut.  Law  .1.  .•!.'!s.  For  a  valuiiiilc  discussion  of  tlic  various  rules, 
see  tlie  late  case  of  Kline  I{ro.s.  &  Co.  v.  Koyal  Ins.  Co.  (C.  C)  1!)"  I'etl    :',~s' 

:;st;  d'tii). 

If  the  iirinelpal  does  not  deny  the  authority  of  an  a^cnt  to  art  for  him,  it 
will  not.  in  general,  lie  in  the  mo\illi  of  any  third  persons  to  e.ill  in  (|nes(ion 
the  i)ower  of  the  aKcnt.  Se(»tt  v.  Detroit  Yoiim:  .Men's  Society's  Lessee,  1 
DouK.  lin  (ISt:!);  Rogers  V.  Kneehind,  10  Wend.  L'lS  (is:!:j; ;  Leonard  v  Ma- 
son, CO  Tenn.  (1  Loa)  .'{S4  (1S7.S). 

'  r.'irt   of  the  o|iinion  is  omillefl. 


•JdS  TiiK  UKLATION  (Parti 

thorn  for  Scarlett,  received  the  first  payment  as  per  a.c;roement.  This 
completed  the  services  they  had  undertaken.*  Scarlett  himself  so  re- 
garded it,  for  when  these  things  were  done  he  inquired  how  much  they 
charged  him  for  their  services,  and  on  being  informed  as  to  the  amount 
he  paid  the  same.  They  hatl  performed  the  business  for  which  the 
agency  had  been  constituted,  and  by  operation  of  law  the  agency  was 
terminated.  See  Story  on  Agency,  §  499,  and  cases  cited;  2  Kent's 
Com.  *643.  and  cases  cited.  This  was  in  July,  1868.  The  purchase 
of  the  land  at  tax  sale  by  Aloore  &  Mclntire  was  not  made  until  Oc- 
tober of  that  year.  At  that  time  they  were  as  free  to  purchase  the 
same  as  any  other  persons.  Their  agency  no  longer  existed;  they  had 
not  undertaken  to  procure  a  good  title  for  Scarlett,  nor  to  examine  the 
title  for  him.  The  land  was  situated  in  another  county  from  where  the 
plaintiff  resided;  nothing  was  said  to  them  about  the  title,  and  they 
might  well  suppose  that  Scarlett,  since  he  resided  near  the  land  and 
desired  to  buy  it,  had  examined  or  procured  some  one  to  examine  the 
records,  in  the  county  where  the  lands  were  situated. 

It  is  also  quite  clear  that  the  fact  that  the  deed  to  Scarlett  was  sent 
by  Everett  to  the  banking  house  of  Moore  &  Mclntire,  for  the  purpose 
of  being  delivered  upon  payment  of  the  balance  of  the  purchase  money, 
did  not  operate  to  revive  the  prior  agency  for  the  purchase  of  the  land. 
In  this  transaction  Moore  &  Mclntire  acted  for  and  as  agents  of  the 
grantor  in  the  deed.  There  is  no  evidence  that  Scarlett  procured  the 
plaintiff,  or  his  firm,  to  obtain  the  deed  for  him.  On  the  contrary  it 
was  sent  by  Everett  to  Moore  &  Mclntire  for  the  purpose  of  collecting 
the  balance  of  the  purchase  money  then  due.  They  performed  that 
service  for  Everett,  and  received  their  compensation  from  him. 

It  is  equally  clear  that  the  plaintiff  was  not  guilty  of  any  fraud,  in 
failing  to  disclose  the  fact  of  the  tax  purchase  by  Moore  &  Mclntire. 
Their  relations  were  not  such  as  required  such  disclosure  to  be  made, 
especially  when  it  is  affirmatively  shown  that  they  had  no  actual  knowl- 
edge that  they  held  the  certificate  of  purchase  at  the  time  they  deliv- 
ered the  deed  to  Scarlett. 

The  decree  of  the  court  below  will  be  reversed,  and  a  decree  entered 
for  plaintiff  in  this  court  if  he  so  elects,  or  the  cause  will  be  remanded 
for  a  decree  to  be  entered  in  conformity  with  this  opinion  by  the  dis- 
trict court. 

Reversed. 

2  When  an  ajrent  employed  to  sell  land  has  found  a  purchaser  upon  the  terras 
fixed  by  the  principal  he  has  fully  performed  his  agency,  and  it  is  at  an  end. 
He  is  then  at  liberty  to  become  the  agent  of  the  purchaser  to  see  that  the 
papers  are  properly  prepared.  The  purpose  of  the  agency  having  been  ful- 
filled, the  relation  is  ipso  facto  terminated.  Short  v.  Millard,  68  111.  292  (1S7;J). 
An  act  done  l^y  the  agent  after  the  full  accomplishinent  of  the  agency  pur- 
poses is  done  without  authority.  The  accomplishment  of  the  purpose  ter- 
minates the  agency.  Tuite  v.  Wakelee,  19  Cal.  092  (18G2).  For  a  wrong  com- 
mitted l)y  the  agent  after  he  has  performed  his  employment  the  principal  is 
not  liable,  for  the  relation  of  principal  and  agent  no  longer  exists.  Kingan  & 
Co.  V.  Silvers,  13  Ind.  App.  SO,  37  N.  E.  413  (1S94),  ante,  p.  6. 


ctr: 

Def.  here  l:^-  certain  articles  of  agreemen 
r-noiited  ^tf,  his  sole  ^gent  and  ^tty.  to  reiares- 
nt   his  interests  in  the  production  of  "n  extr^v^g 
n^^   under  an  ?^greement  with  one  Rice,  d«.ted 
lily,  16.  189^,  ^nd    to  collect  and  receiferoy^ltie 
or  def.,  for  which  -ntf.  w?^s  to  be  T)*=id  st   of  the 
iim  def.  w^s  entitled  to  under  terms  of  agreement 
ith  Rice.   This  agreement  w^^s  for  three  ye^rs, 
rid  before  the  expiration  thereof  w^s  extended  for 
ffo   more.  ?tf.  claims  th^t  this  extension  O'oer'^t- 
a  to  extend  the  agreement  between  her  *=nd  def.  fo 
lilCe  period,  and  this  suit  is  brought  to  recover 
^mmission  which  would  h^ve  accrued  had  ptf's.  con 
r^ct  been  in  force, 
irt: 

Kinds  of  ptf •  and  def.  here  never  met  res 
scting  the  extended  term,  »nd  it  could  not  h<=ve 
sen  within  their  contemplation  ^t  the  time,  bec- 
ise  it  c*='me  into  existence  long  «fter  the  power 
OS  given,  ^^nd  ^^s  the  result  of  ^   new  underst-^nd- 
ig,  with  which  the  -ntf.  h«=s  no  concern.  But  whe- 
ler  the  ptf. 'p.  -nower  comprehended  the -extended 
prreement  or  not,  the  def.,  by  the  nature  of  the 
preement  h^fl  «-  rip'ht  to  revoke  it  *=  t  ^ny  time. 

VEEriCT  FOE  DEF. 


nsrae#i3B  lo   aeXoid-iB  al^'^fieo   v.rf  e^erf   .led 

i   oi    »Y,^^-  -^   ©loB   nld  .Ida   bo;t( K 

v«.   :*■  ^  io  nc-.-. -  (  exid  nl   a^taeiedxii   ei'' 

.eol;I  eno  xf;tiw  itnerndei^B  ns  lebrsL' 
ioelloo   00    ba^    ,>eBI   .62    ,, 
oit    arf!  .liter  rfolriw  rtol    ,.l65 
Jnsflieei^s  lo   ami© J   lebnxr  o;t   &©I;tidn©   s.^w  .Tteb 
,81^6^   dot^^d   tol    S'-^w  ;tn0fna8X3''.  BirfT      .eolH!  i 
io1    bebnedx©   a-^w  looie.ff;t   noj:;t^T£ax©   erf;t    ©lolecf 
-j'^'ieao  noianeifxe   airfit   o'=»rfd'   arali^Io   .l:tu   .exora 
ol    .leb    6n^  Terf  n©©w;tecf  dnemseig^  ©rfd"   finedx©   o; 
xevooei   oi   drfgiroicf  81   d  ixrs   airfit    bas    ^botteq  e!JC. 
noo   •a^li^a   &«^ff  B©jjt:oop   ©v^ri   blxjow  riotrfw  nolasxf 

•  ooiol  ni  ii©©cf   ^i 

m    > 

aeiL  d'©fii  X6v©n  ©i©r(  .1©6   bas  »t^cr  lo  ebrtll^I 

ev«rf  ion.  bLnoo   ;tx   f)a«   ,nix©;t    f)©bn©;tx©   ©rfit   3111: 

-oecf   ,©mi:;t    edi   *«  nol^tf^Igmd^iioo   lierid   nlrf^txw  i 

T©770cr  aif'vt   i©;tl«  ^nol   eonejtalx©  o:tnl   ©m^^^o   ;ti   < 

-f)rx--';t3i©£iu:j  wsn   ^-  lo    ;tlxrssi   ©rfd    S'*    bn^   ,n©3Ji::3 

-erfw  ;^i;ff   .nidonoo   on  a^rf  .l^ta   ©rfd   rfo/rfw  rfd'lw   , 

bef^nsitx©- ©rfct    5©fen9rf©icrraoo   t9wo<r   ^s^licr  ©ff;t  •: 

©ri;j    10   ©xjjjBn   ©rfit   ^^d    ,.l:e5   ©r:;t    ,;lon  to   :tn©fno< 

•  ©mid"  Tjna ';J«»   ^f   ©^ov©i    o:t    ;tff'^.  fi    ->    ^^d  in©rrf*< 

.'^sc  no's?:  TOTiHav 


[)l4^A^.A^  lA^n  ^ 


Ch.  5)  TERMINATION   OF    THE    RELATION  209 

MARBURY  V.  Bx\RXET. 

(Supreme  Court  of  New  York,  Appellate  Term,  First  Department,  1896.     17 
Misc.  Kep.  386,  40  N.  Y.  Supp.  76.) 

McAdam,  J.  The  action  was  to  recover  for  services  alleged  to 
have  been  rendered  by  the  plaintiff  to  the  defendant  under  what  upon 
their  face  are  entitled  "Articles  of  Agreement,"  made  and  entered 
into  August  3,  1892.  By  these  so-called  "Articles,"  the  defendant 
appoints  the  plaintiff  his  sole  agent  and  attorney  to  represent  his  in- 
terests in  the  production  and  representation  of  an  extravaganza  called 
"1492,"  under  an  agreement  between  the  defendant  and  one  Edward 
E.  Rice,  dated  July  26,  1892,  and  to  collect  and  receive  the  royalties 
thereunder.  For  the  services  to  be  rendered,  the  defendant  agrees  to 
pay  the  plaintiff  8  per  cent,  of  the  sum  or  sums  which  the  defendant 
may  be  entitled  to  under  the  agreement  with  Rice.  The  last-mentioned 
agreement  was  for  three  years  from  July  26,  1892,  thus  terminating, 
by  its  terms,  July  26,  1895.  On  July  20,  1893,  the  contract  between 
the  defendant  and  Rice  was  extended  for  two  years  from  July  26, 
1895 ;  and  the  plaintiff  claims  that  such  extension  operated  to  extend 
the  agreement  between  her  and  the  defendant  for  a  like  period. 

It  is  conceded  that  the  defendant  paid  the  plaintiff  all  the  commis- 
sions earned  under  the  so-called  "articles"  during  the  lifetime  of  the 
first  agreement  between  the  defendant  and  Rice.  The  suit  was  really 
to  recover  the  commissions  which  would  have  accrued  from  August 
3,  1895,  to  January  11,  1896,  if  the  plaintift'"s  agreement  had  embraced 
that  period.  But  it  did  not  cover  that  period.  It  contemplated,  at 
most,  the  existence  of  the  agreement  between  the  defendant  and  Rice 
to  which  it  particularly  refers,  and  terminated  by  "efflux  of  time  and 
performance  of  the  condition"  (Dunl.  Paley,  Ag.  184) ;  or,  in  other 
words,  by  the  expiration  of  the  peraod  during  which  it  was  to  exist  and 
to  have  effect  (Story,  Ag.  §  480).  I  The  minds  of  the  plaintiff  and  de- 
fendant never  met  respecting  the  extended  term,  and  it  could  not  have 
been  within  their  contemplation  at  the  time,  because  it  came  into  ex- 
istence long  after  the  power  was  given,  and  as  the  result  of  a  new  un- 
derstanding, with  which  the  plaintiff  has  no  concern. 

But,  apart  from  this,  the  power  seems  one  capablo^of  revocation  at 
any  time  by  the  donor.  A  letter  of  attorney  depeads,  from  its  nature, 
on  the  will  of  the  person  making  it,  and  may,  ifi  general,  be  recalled 
at  his  will ;  yet  if  he  l)inds  himself  for  a  consideration  in  terms,  or  by 
the  nature  of  his  contract,  not  to  change  his  will,  or  if  the  power  be 
coupled  with  an  interest,  the  law  will  not  permit  him  to  change  it. 
Hunt  V.  Rou.smanier's  Afim'rs,  8  Wheat,  at  page  202.  5  L.  Ed.  589 ; 
Story,  ;\g.  §  463.  To  make  the  power  irrevocable,  there  must  be  an 
interest  in  the  subWct  of  the  agency  itself,  and  not  a  mere  interest  in 
the  result  of  the  execution  of  the  authority,  such  as  arises  from  coni- 
Gonn.rR.&  A.— 14 


-10  Tino  uKi-ATioN  (Parti 

pensation  for  oxccnlinj;  the  power.  Manst'ieUl  v.  IMaiisficltl,  ()  Conn. 
559.  16  Am.  Deo.  76;  1  Am.  &  I/iig.  luic.  Law  (2a  lul.)  p.  1216;  Slier 
V.  Insurance  Co.,  58  Fed.  843;/i\lissouri  v.  Walker.  125  U.  S.  339,  8 
Sup.  Ct.  929,  31  L.  Ed.  769.  /So  that,  whether  the  phiintiflf's  power 
comprehended  the  extended  agreement  or  not,  the  def(;ndant  had  a 
riglit  to  revoke  it,  and  effectually  exercised  the  privileg)t  before  the 
pcricxl  for  which  compensation  is  claimed  by  the  ])laintiff.  ^ 

The  "Articles  of  Agreement"  upon  which  the  plaintiff /sues  express 
no  consideration,  and  the  plaintiff  in  no  manner  obligates  herself  to 
serve  thereunder  for  any  specified  time,  unless  it  is  to  be  inferred  from 
the  mere  fact  that  the  contract  under  which  she  was  to  collect  the 
royalties  extended  to  July  26,  1895.  Even  indulging  this  inference, 
which  is  the  most  favorable  the  plaintiff  can  demand,  there  is  not  the 
slightest/ ground  for  holding  that  her  obligation  extended  beyond  that 
period./  If  her  duties  ended  at  that  time,  so  did  the  obligations  of  the 
defendant,  and  there  is\io  theory  upon  which  the  alleged  right  of  ac- 
tion caWbe  sustained.^  JIf  the  plaintiff's  rights  attached  to  the  exten- 
sion granted,  they  woiijcl  continue  to  attach  to  every  extension  there- 
after made,  and  cease^nly  when  the  defendant  and  Rice  severed  their 
relations. 

The  action,  though  in  form  for  services  rendered,  is  in  fact  founded 
on  readiness  to  perform,  and  in  the  nature  of  w^rongful  discharge.  In 
whatever  light  the  matter  may  be  viewed,  it  is  apparent  that  the  com- 
plaint was  properly  dismissed,  and,  as  ^«  necessary  sequence,  the  judg- 
ment must  be  affirmed.  J,^ 
»                   --•  . 

II.  ReS'ocatiqn  by  rut  Principai^^ 


^^^ '  ^      I  jy     '      f  (A)  In  General 


f  BURKE  V.   PRIEST. 

(Kansas  City/  Court  of  Appeals,   Missouri,  1S92.     50  Mo.   App,   310.) 

Smith,  P.  j!vl  The  principle  ^Rudimentary  that  as  between  prin- 
cipal and  agent^he  authority  ofvthe  latter  is  revocable  at  any  time 
if  not  coupled  with  an  interest.*  |The  authority  of  the  agent  to  rep- 
resent the  principal  depends  upon  the  will  and  license  of  the  principal. 

3  An  afireenioiit  made  one  Fischer  /l:he~ageiit  of  plaintiffs  until  October  1, 
1^(57.  Sureties  were  therefore  held/lialile  for  accounting  by  the  agent  for 
transactions  before  that  date,  but  not  for  business  intrusted  to  him  after 
that  time.  Gundlach  v.  Fischer,  Oa/lU.  172  (1871).  Authority  to  an  agent  to 
receive  produce  before  the  first  rise  of  the  Ohio  river  carries  no  authority 
to  receive  it  after  the  first  rise.  Longworth  v.  Conwell,  2  Blackf.  4(J9  (18.)1). 
And  when  the  agency  is  at  will  no  rights  can  grow  out  of  it  after  it  has  been 
terminated  by  either  party.  Willcox  &  Gibbs  .Sewing  Machine  Co.  v.  Ewing, 
141  U.  S.  «27,  12  Sup.  Ct.  94,  a.5  L.  Ed.  882  (1801);  Uhodes  v.  Forwood,  47 
L.  J.  Ex.  .390,  1  App.  Cas.  2.50.  .34  L.  T.  890,  24  AV.  R.  1078  (1876). 

4  Accord:  Rochester  v.  Whitehouse,  15  N.  H.  468  (1844).  quoting  Story  on 
Agency.  §  40-3. 


U/Jm^  ^^'"^ 


its: 

Here  the  defs.,  doctors,  entered  into  a 
rol  contr'^ct  T^lth  ^:)tf.,  ^  Iw^'yer,  wherelDy  it  ws 
rreed  th«=t  their  ^cct.  "books  should  "be  turned  ovea 
I  him  for  the  -nuriDOSe  of  m'^king  collections  there- 
in for  P  cert*^1n  commission.  The  evidence  does  no1 
ow  th^t  the  r)tf's.  employment  w^s  fixed  for  f^ny 
iriod  of  dur'"tion«  Defs.  refused  to  turn  over  the: 
ict.  books;  ptfbrings  this  action* 

Zpys'  do^  the  rule  th«^t  ^s  between  nrinc- 
i«=l  an<l''agt,  the  authority  of  the  letter  m«y  be 
ivoked/at  his  will  at  any  time  pnd  with  or  with- 
.t  re'='Son  therefor,  exce-nt  where  the  ?^gt's.  «uth. 
I  coux»led  with  an  interest.  The  exceritiosn  to  the 
lOve  rule  is  where  the  -oower  is  given  °s  ^   v^t% 
*   a  security  or  for  ^   v^lu«ble  consideration  ,  or 
lere  the  -oower  is  couT>led  with  an  interest,  which 
iterest  must  be  in  the  subject  matter  on  which  th' 
iwer  is  to  be  exercised.  This  c°se  comes  under  thi 
►ner«l  rule  • 

VERDICT  FOK  DEFS. 


Lave    «^-  —-       -      -,  r.^.--.,    —food"   •ioo.r''   ilerfj    tt^^rf^t    fce 
-e-xe  ^0   98oai;jrr   ©r{;t   lol  ml 

^oa  aeoi;   tionocL\e   ©-'1    .noiss.trr'inoo   rif-;tx©o    "^  lol 

-^fl^   TO^    5©xil    8=<w  ;tn©ni'40lq-rn©    .s'l:;t(T   ©a;J    ;t''i{^ 
terf*  xevo  rriu*   o;t    fteaulei   .s^eU.   ^nol^^iDb  ^o   bo 

•  nox;tos  alrf:t   a^nlTcniitcr   ;a2[oocf   . 

acf  Y'^^  ia;J3^I   ajrr;t  Iro  ^^liorf^uB   ©rii    .  ;f3B  \briB 

-il^iw  10  rfoiw   5n^.   ©rnxct   •^^x^B   ;t«  Iliw  alrf  ;^i^  .borrf 

•  rfd-xfpt   .s'lt^f*  ©rfit   eierfw  ;ta©oxa    ,Toleieri;J   noa^tii 

eriif   0*   naoi^rreoxa   ©aiT   •  ;t?3©i©;tr:i   n3  rfiMw  b©Ior?jo 

d'i«q-   -^   3^-  n©vJ:>3   ai   i9Woc>    ©."(;?   ©xarfw  ai   oIjjt   © 

10    .    £xol:t »iab ianoo   elcfoijl'^v    '•  io^  lo  xiliLroee 

"       :8*ni   na  rfctxw  balanoo   8jt  xawoa   erfij    a 

•  la^itBci  ;^osto'ije  &d^  nx   acf  iJaum  ;taai 

•nj   labxuj  sarnoo   aa>''o   alrfT   .beaioiaxa   acf  o^   al  i 


ft^Hc^y^H^^^/'- 


irl 


y 


Ch.  5) 


TERMINATION    OF    THE    RELATION 


211 


It  is  the  act  of  the  principal  which  creates  the  authority;   it  is  for  his 

benefit  and  to  subserve  his  purposes  that  it  is  called  into  being;    and, 

unless  the  agent  has  acquired  with  the  authority  an  interest  in  the 

subject-matter,  it  is\in  the  principal's  interest  alone  that  the  authority 

i$  to  be  exercised.  I  The  agent  has  no  right  to  insist  upon  a  further 

CV^execution  of   the  authority   if  the  principal   desires  it  to  terminate. 

I   It  is  a  general  rule  that  as  betw&^D^rincipal  and  agent  the  authority 

/    of  the  latter  rn^  be  revoked  by  the  former  at  his  will  at  any  time 

/    and  with  or  Without  reason  therefor,   except  wdiere  the  agent's  au- 

/      thofity  is  coupled  with  an  interest.  /Mechem  on  Agency,  §  204 ;   State 

f       ex  rel.  Walker  v.  Walker,  88  Mo.  2^9 ;  Hunt  v.  Rousmanjfer,  8  Wheat 

201,  5  L.  Ed.  589,  post,  p.  274. 

The  exceptions  to  the  general  fule  just  s 
is^  given  as  a  part  of  a  secuptfDv  for  a  v 
where  the  power  is  coupled  ^vith  an  interest 
cases  is  an/interest  in  the 
exercised./  An  interest  in 
the  poweri  is  not  sufficient 


ted  is  wh^e  the  power 
luable  consideration,  or 


est  in  the  ^operty  on 
interest  in  the  money  de 


But  the  interest  in  such 

ect-matter  on  A'hich  the  power  is  to  be 

at  which  is  Deduced  by  the  exercise  of 

e  power  umst  be  engrafted  on  aK  inter- 


the  power  is  to  be  exercised,  and  rtpt  an 
from  the  exercise  of  the  power.     Hunt 
V.  Rousmanier,  supra  i/Barr  v^  Schroeder,  32  Cal.  609;  Coffin  v/Lan- 
dis,  46  Pa.  431 ;    Blatkstone  v.  Buttermore,  53  Pa.  266,  po>r;  p.  214.    \ 
And  so  it  has  been  held  that  a  power  to  collect  mone^f^nd  receive        \ 
property  and  to  sell  and  convey  the  property  of  the  principal,  the  agent  1 

to  receive  one-half  of  the  net  proceeds  as  compensation,  is  not  a  power        / 
coupled  with  an  interest  and  is  revocable.     Hartley's  Appeal,  53  Pa.  y^ 
212,  91  Am.  Dec.  207,  post,  p.  226.  -/ 

In  this  case,  the  defendants  who  had  lately  been  copartners,  en- 
gaged in  the  practice  of  medicine,  entered  into  a  parol  contract  with 
plaintiff  who  was  an  attorney,  whereby  it  was  agreed  that  the  defend- 
ants would  turn  over  to  plaintiff  their  books  of  account  for  collection 
and  adjustment,  and  for  which  the  former  would  pay  the  latter  as 
a  compensation  for  his  services  ten  per  cent,  on  all  sums  collected, 
and  five  per  cent,  on  all  accounts  adjusted  by  note.  The  defendants 
refllised  to  deliver  their  books  of  account  to  plaintiff,  and  so  did  not 
cyrry  out  the  contract.  This  the  dcfenflants  could  do,  and  on  account 
which  the  plaintiff  has  no  legal  ground  of  complaint. 

Of  course,  where  the  principal  has  the  power  to  revoke  theVuthor 
|ty  of  the  agent,  he  may,  nevertheless,  subject  himself  to  a  claiqi  for 
lamages  if  he  exercise  such  power  conlrary  to  liis  agreement. 

The  evidence  does  not  show  that  the  plaintiff's  emi)loyment  wa/  fixed 
f'^any  period  of  duration.  The  written  admission  of  oii^of  the 
defendants  offered  in  evidence  by  plaintiff  showed  no  more  than  that 
plaintiff  was  to  "try  and  have  all  notes  and  accounts  adjusted  in  eight- 
een months."  The  duration  of  the  contract  was  contingent  and  un- 
certain.   It  might  have  been  performed  by  plaintiff'  in  a  week,  a  month 


V 


\yj 


\^ 


^^4 


-12  /  Tin;  i:i;i,ATioN  (Parti 


or  year.?  So  it  has  been  liekl  that  an  appointment  of  an  agent  to  do 
certain  ^ets  during  a  given  period  does  not,  of  itself,  amount  to  an 
agrccmcih  that  he  shoukl  be  permitted  to  continue  to  act  during  that 
period.  Mechem  on  Ag.,  §  211.  In  any  view  which  we  have  been 
able  to  take  of  the  case,  we  are  unable  to  find  that  the  court  below 
erred  in  sustaining  the  demurrer  to  the  plaintiff's  evidence. 

It  follows,  therefore,  that  the  judgment  will  be  anirmed.    All  concur. 


^\   ,. 


/ 

BROOKSHIRE  V.  VONCANNON. 

(Supreme  Court  of  North  Carolina,  1845.    28  N.  C.  [6  Ired.]  231.) 


Defendant  in  right  of  his  wife,  and  plaintiff  in  his  own  right,  were 
entitled  to  a  share  of  the  personal  estate  of  one  Clark  who  had  died 
intestate  in  Alabama.  Defendant  by  power  of  attorney  authorized 
plaintiff  to  receive  his  share  of  the  estate  and  bring  it  home.  Plain- 
tiff' made  one  trip  which  resulted  in  nothing,  whereupon  defendant  re- 
voked his  authority.  He  made  a  second  trip,  and  now  seeks,  accord- 
ing to  the  terms  of  the  power  of  attorney,  to  recover  one-sixth  of 
his  expenses  and  ten  per  cent,  for  his  time  and  trouble.  The  court 
charged  that  such  agreement  to  pay  made  the  power  irrevocable. 
Judgment  for  plaintiff  for  more  than  one-sixth  of  his  expenses  on  the 
first  trip,  and  defendant  appeals. 

Danie;i„  J.  The  charge  of  the  judge  was,  as  we  understand  it,  in 
conformity  to  the  prayer  of  the  plaintiff's  jtounsel ;  and,  received  in 
^^  that  light,  we  think  that  it  was  erroneous.  I A  power  of  attorney,  or 

I  \J  other  authority,  is  in  general  revocable  from  rs  nature ;   and  the  power 

of  revoking  an  authority  may  be  exercised  at  any  moment  before  the 
actual  execution  of  it.J  Paley  on  Agency,  184,  185.  Even  if  it  be  true 
at  law,  that  a  power, /v'hich  is  part  of  a  security  for  money,  or  coupled 
with  an  interest,  cannot  be  revoked,  yet  the  doctrine  has  no  application 
to  this  case.  The  plaintiff,  neither  when  the  power  was  given  to  him, 
nor  when  the  defendant  contended  that  it  was  revoked,  had  any  in- 
terest in  the  distributive  share  of  the  defendant.  If  he  did  the  labor, 
he  was  then  to  be  compensated  as  above  mentioned ;  but  there  was  no 
obligation  on  the  plaintiff  to  go  to  the  West  for  the  property,  and 
when  the  defendant  insisted,  that  he  had  made  the  revocation,  the 
plaintiff  had  never  received  any  of  the  said  property.  We  think  that 
there  must  be  a  new  trial. 

Per  Curiam.    Judgment  reversed,  and  venire  de  novo. 


6l4L^ 


Ch.  5)  TERMINATION    OF    THE    RELATION 


MacGREGOR  v.  GARDNER. 
(Supreme  Court  of  Iowa,  1S62.    14  Iowa,  326.) 

Suit  to  set  aside  certain  deeds  made  by  Alexander  MacGregor,  as 
attorney  of  James  IMacGregor,  to  George  D.  and  Egbert  Gardner. 
James  claimed  that  the  lands  conveyed  were  purchased  with  his  money 
and  for  his  use,  and  the  deeds  were  without  consideration  and  for  a 
fraudulent  purpose.  He  prays  that  the  same  may  be  canceled  and  de- 
clared void.  Alexander  claims  that  the  lands  were  purchased  for  his 
use,  the  titles  being  in  James  because  Alexander  was  then  involved 
and  could  not  hold  property  in  his  own  name,  that  $2,000  of  the  pur- 
chase money  was  a  trust  fund  belonging  to  his  wife  and  children,  and 
that  he  deeded  the  lands  under  an  irrevocable  power  of  attorney  to 
the  Gardners  to  be  held  in  trust  for  these  beneficiaries.  Decree  for 
plaintiff. 

Baldwin,  jb  *  *  *  'V\vt.  mere  fact  that  the  power  of  attorney 
is  itself  declared  irrevocable  does  not  prohibit  its  revocation,  nor  does 
it  establish  the  fact  that  the  person  making  the  same  yields  all  right 
or  claim  to  the  property  authorized  to  be  sold,  or  that  the  person  upon 
whom  such  power  is  conferred  has  the  right  to  sell  and  dispose  of  the 
property  entrusted  to  his  care,  without  oafisideration,  od' without  being 
held  accountable  for  the  faithful  discharge  of  his  trustJ  "The  general 
rule  is,"  says  Story  on  Agency,  par.  47p,  "that  the  principal  may  revoke  j 

the  authority  of  his  agent  at  his  mei^  pleasure.  /But  ihis  is  open  to  y/ 

some  exceptions,  which,  however,  a^e  entirelyVconsistent  with  the/  JV~\ 
reason  upon  which  the  general  rule  is  foundtraV  One  exception  x^^-^r  /^ 
when  the  principal  has  expressly  stipulated  tHat  the  authority  shall  be 
irrevocable  and  the  agent  has  an  interestMn  its  execution.  Both  of 
these  circumstances  must  concur,  for  although  in  its  terms  an  authority 
may  be  expressly  declared  to  be  irrevocable,  yet  if  the  agent  has  no 
interest  in  its  execution,  and  there  is  no  valid  consideration,  it  is  treated 


in  law  to  be  revocable,  upon  the 
las  an  interest  in  the  execution  of 


alone  is  not  evidence  that  the 


as  a  mere  nude  pact  and  is  deeme^ 
genfcral  principle  that  he  who  alone 
ai/act  is  also  entitled  to  control  it." 
«The  use  of  the  word  "irrevocab 
pjbwer  is  coupled  with  an  interest:  if  so,  it  woulB  not  be  necessary 
that  both  of  these  circumstanc^  should  concur.  /The  powers  of  at- 
torney under  which  these  deeds  were  made  reaJjfas  follows:  "Know 
all  men  by  these  presents,  that  I,  James  MaiJ^regor,  Jr.,  &c,  being 
seized  in  fee  of  certain  lands  in  the  county  of  Clayton,  Iowa,  have 
nominated,  constituted  and  appointed  .\lex.  MacGregor  *  *  *  my 
true  and  lawful  attorney,  irrevocable,  for  me,  and  my  name  to  lease, 

6  The  portions  of  the  opinion  dealing  with  the  contention  that  there  was  u 
trust  ;iii-  uniitted.  Lowe,  J.,  dissented.  Accord:  Walker  v.  Denison,  80  111. 
142  (]S77). 


^.^ 


^/ 


c^^ 


h4m)\ 


7uu4a 


;\^ 


•2\i  TiiK  KKi.ATioN       '     /  /  (Parti 

devise  ami  sell  said  lands  *  *  *  to  suoii  person  or  persons,  upon 
sueh  terms.  ^  *  *  anil  lor  sueh  prices  as  he  may  sec  fit." 
■■  The  \Yord  "irrevoeahle"  sijjnities,  not  to  he  recalled  or  revoked. 
Therefore,  when  usetl  in  the  ahove  connection  it  shows,  that  it  was 
the  intention  ol"  the  principal  that  the  authority  therehy  conferred, 
should  not  he  recalled.  It  cannot  however,  he  inferred  from  its  use 
that  the  agent  was  therehy  invested  with  any  greater  power  of  dis- 
position or  authority  in  relation  to  the  property  to  he  sold,  than  if  this 
word  had  heen  omitted.  But  it  is  not  the  policy  of  the  law  to  deny  to 
the  person  making  such  jpowers  irrevoc^le  the  right  to  revoke  such 
authority,  notwithstanding  the  fact  that  it Vas  the  fixed  design  of  the 
parties  so  to  do  when  they  were  made.  If,  however,  the  power  is 
coupled  with  an  interest,  or  the  agent  is  ii/erested  in  its  execution,  it 
shall  not  he  revoked. 

Conceding,  therefore,  that  the  power  j/by  its  terms  made  irrevocable, 
and  when  the  agent  has  an  interest  p  its  execution,  the  law  declares 
that  it  then  cannot  be  revoked,  this  fact  still  does  not  of  itself  give 
the  agent  any  power  to  dispose  of  the  property,  except  in  the  manner 
directed  by  the  principal.     The  ai/"hority  is  continuous,  but  in  other 
respects  the  sarq^  as  if  revocable,  j  If  the  agent  therefore  exceeds  his 
^s  the  trust  repceed,  equity  will  afford  the  principal 
Alexander  had  no  authority  conferred  u])on  him  to 
Is  without  consideration.     He  was  required  to  act 
it  of  the  principal,  and  granting  that  he  had  an  in- 
terest in  the  exec/tion  of  the  authority  conferred,  he  could  not  dispose 
of  the  property  of  which  he  had  the  sale,  in  such  a  manner  as  the  title 
would  inure  to  his  benefit,  for  the  rule  of  equity  is,  that  a  purchase  by 
an  agent  of  the  property  of  which  he  has  the  sale,  or  in  which  he  rep- 
resents another,  whether  he  has  an  interest  in  it  or  not,  per  interpositam 
personam,  carries  fraud  on  the  face  of  it.     *     *     * 
Decree  as  to  the  deeds  affirmed. 


authority  or  abus 
the  proper  relief, 
dispose  of  the  lai 
for  the  best  interi 


(\A 


^K 


/^-^'-  •' 


BLACKSTONE  v.  BUTTERMORE. 

(Supreme  Court  of  Pennsylvauia,  18G7.  53  Pa.  2G6.) 
Ejectment  by  Blackstone.  Buttermore,  being  the  owner  of  the  land 
in  question,  gave  to  one  Davidson  a  power  of  attorney  to  sell  it  for 
$25,000  on  stated  terms,  concluding:  "And  I  hereby  ratify  and  confirm 
whatever  contract  he  may  make  in  accordance  with  the  above  authority, 
and  hereby  bind  myself  for  its  execution.  This  authority  is  irrevocable 
before  the  1st  of  May  next."  Davidson  on  April  19  contracted  with 
Blackstone  for  the  sale  of  the  land.  There  was  evidence  that  Butter- 
more  had  meantime  revoked  the  power,  and  that  Blackstone  had  notice 
of  the  revocation  before  contracting  with  Davidson.  Verdict  for  de- 
fendant, and  plaintiff  brings  error. 

Agnew,  J.     We  have  decided  the  substantial  point  in  this  case  at 


^-^^  /^J^draj:^ 


UimSkA 


'TlA^VM*-^^ 


yi\fuiAA> 


X'l 


c 


Ch.  5)  TiraMixATioN  om  the  relatiok' 

TKA-yf- C^f<  -•  

the  present  term  upon  tne'  appeal  of  Hartley  &  ^Minor  from  the  Or- 
phans' Court  of  Greene  county,  opinion  by  Thompson,  J.  53  Pa.  212, 
^\Am.  Dec.  207,  post,  p.  226. 

ffV  power  of  attorney  constituting  a  mere  agency  is  always  revocable. 
If  is  only  when  coupled  with  an  interest  in  the  thing  itself  or  the  estate 
wnich  is  the  subject  of  the  power,  it  is  deemed  to  be  irrevocable,  as 
where  it  is  a  security  for  money  advanced  or  is  to  be  used  as  a  means 
of  effectuating  a  purpose  necessary  to  protect  the  rights  of  the  agent 
or  others.     A  mere  power  like  a  will  is  in  its  very  nature  revocable 
when  it  concerns  the  interest  of  the  principal  alone,  and  in  such  case  ~>     ^ 
even  arf"  express  declaration  of  irrevocability  will  not  prevent  revoca-      V^ 
tjon.®  /An  interest  in  the  proceeds  to  arise  as  mere  compensation  for^  ^^-^i/i    j 
A\\e  service  of  executing  the  power  will  not  make  the  power  irrevocable^^    ^^^^-^ 
/  Therefore,  it  has  been  held  that  a  mere  employment  to  transact  tire    '^ 
/«    business  of  the  principal  is  not  irrevocable  without  an  express  covenant 
\       founded  on  sufficient  consideration,  notwithstanding  the  compensation 
of  the  agent  is  to  result Vrom  the  business  to  be  perfon-ufed  and  to  be 
measured  by  its  extent.  I  Coffin  v.  Landis,  46  Pa.  426:     In  order  to  -^    -^ 

make  an  agreement  for  irrevocability  contained  in  a  po\\'er  to  transact    t_J 
business  for  the  benefi^^f  the  principal  binding  on  him,  tliere  must  b'^  '  '"^ 

a  consideration  for  it  independent  pf  the  compensation  to  be  rendere 
for  the  services  to  be  performed 

In  this  case  the  object  of  the  principal  was  to  make  sale  solely  for 
his  own  benefit.  The  agreemmr  to  give  his  agent  a  certain  sum  and 
portion  of  the  proceeds  wae^erely  to  carry  out  his  purpose  to  sell. 
But  what  obligation  was  there  upon  him  to  sell,  or  what  other  interest 
beside  his  own  was  to  be  secured  by  the  sale?  Surely  his  determina- 
tion to  sell  for  his  own  ends  alone  was  revocable.  If  the  reasons  ijsfv 
making  a  sale  had  ceased  to  exist,  or  he  should  find  a  sale  injuriou^'to 
his  interest,  who  had  a  right  to  say  he  should  not  change  his  mind  ?  ffhe 
interest  of  the  agent  was  only  V/ his  compensation  for  selling,  (and 
without  a  sale  this  is  not  earned.uA  revocation  could  not  injure  him. 
If  he  had  expended  money,  time  Jr  labor,  or  all,  upon  the  business  in- 
trusted to  him,  the  power  itself  ^^  a  request  to  do  so,  and  on  a  revo- 
cation would  leave  the  principal  lirlble  to  him  on  his  implied  assump- 
sit. But  it  would  be  the  height  of  injustice  if  the  power  should  be 
held  to  be  irrevocable  merely  to  secure  the  agent  for  his  outlay  or  h 
services  rendered  before  a  sale.  The  folhjwing  authorities  are  rcferu<^d 
to:  Hunt  v.  Rousmanier,  8  Wheat.  174,  5  L.  Ed.  589;  Story  on  Agency,'  / 
§§  463,  464,  465,  468,  476,  477;  Paley  on  Agency,  155;  1  Parsons  oi'i^  '^ 
Contracts,  59;  Irwin  v.  Workman,  3  Watts,  357;  Smyth  v.  Craig,  3 
Watts  &  S.  20. 

The  judgment  is  therefore  affirmed. 


y^#C^ 


nsaci  J  ^ 
dere/L^t^^ 


«^x 


■-tC. 


\ 

•That  a  prjwcr  of  attorney  is  in  terms  made  "oxrlnsivo"  or  "irrovoraltlc"' \ 
«lops  n(»t  prevent  tlie  prliiciiial   from  revoUin«  it  at  liis  own  pleasure.     Koll»  v. 
Kennett  I>aiul  Co..  74  .Miss.  .'>«J7,  21  South.  li.'J.'}   (ISOO) ;    Cliamljers  v.  Seay,  73 
Ala.  ?ri1  dJiSL'). 


// 


^^ 


J 


^ 


21G  THE  RELATION  (Parti 

(B)  Power  Ck'oi  for  a  Consideration,  or  as  Security 
WALSH  V.  WIIITCOMB. 

(Nisi  rrius.  Kinu's  HtMioh,  1797.    2  Ksiiinasse,  565.) 

Assumpsit  to  recover  money  for  work  done  by  Walsh,  a  tailor. 
Defense  tliat  Walsh  having  become  insolvent  had  executed  a  power 
of  attorney  to  one  Barker,  together  with  a  general  assignment  by  deed, 
authorizing  him  to  receive  all  debts  due  Walsh  and  give  proper  re- 
ceipts ;  also  to  appoint  a  substitute  to  act  in  his  room  for  the  same 
purposes.  Barker  appointed  Hindlcy,  who  received  from  Whitcomb 
the  debt  in  question,  giving  him  a  receipt.  Plaintiff  claimed  to  have 
revoked  the  power  to  Barker  by  the  appointment  of  another  agent. 

Lord  Kenyon.  There  is  a  difference  in  cases  of  powers  of  attor- 
ney ;  in  general  tMey  are  revocable  from  their  nature ;  but  there  are 
these  exceptions :  VWhere  a  power  of  attorney  is  part  of  a  security  for 
money,  there  it  is  not  revocable;  where  a  power  of  attorney  was  made 

levy  fine,  as  part  of  a  security,  it  w^as  held  not  to  be  revocable;  tlic 
principle  is  applicable  to  every  case  where  a  power  of  atflorney  is  nec- 
essary to  eft"ecluate  any  security;  such  is  not  revocable./  In  the  pres- 
ent case  Walsh  assigned  all  his  effects,  &c.,  over  to  Bai^<er,  to  whom, 
amongst  others,  he  was  indebted ;  the  power  of  atjx^ney  was  made 
to  Barker  to  call  in  the  debts  for  the  benefit  of  ^^ke  creditors;  it  was 
part  of  the  security  for  the  payment  of  the  creditors.  It  was  there-' 
fore  by  law  not  revocable ;   and  the  payment  by  the  detendant  is  good. 

The  jury  found  a  verdict  for  the  defendant 


PARKE  V.  FRANK. 
(Supreme  Court  of  California,  1888.    75  Cal.  364,  17  Pac.  427.) 

Action  for  damages  for  breach  of  a  contract  of  agency.  Berry  and 
Place  were  agents  in  California  for  machinery  manufactured  by 
Frank.  They  sold  the  agency  to  Parke  and  Lacy  on  the  condition 
that  Frank  would  approve.  He  did  approve,  whereupon  Parke  and 
Lacy  paid  Berry  and  Place  $2,400  for  the  agency.  There  was  trouble 
in  drawing  an  agency  agreement  between  Frank  and  plaintiffs,  and 
Frank  took  away  the  California  agency,  giving  it  to  Gregory  &  Co. 
From  judgment  for  plaintiffs  defendant  appeals. 

McKixsTRY,  ].''  The  main  contention  of  the  appellant  in  the 
court  below  was  that  the  contract  of  agency,  not  being  for  any  definite 
term,  was  revocable  at  the  will  of  the  principal.  Appellant  claims 
that  the  rulings  of  the  superior  court  alleged  to  be  erroneous  are 
exemplified  by  the  portion  of  its  charge  to  the  jury  which  reads: 

7  Part  of  the  opiulon  Is  omitted. 


•"^- 


Ch.5) 


TERMINATION    OF    THE    RELATION 


/ 


(^ 


J 


"No  period  of  time  was  mentioned.     *     *     *     Where  employment  is  C^  ^(q  /£aJ^- 
proved,  and  no  time  is  specified,  the  law  presumes  it  shall  last  and     J^  ^^\        j 

endure  for  a  reasonable  time.     What  would  be  a  reasonable  time  is     '     .  .,*V^^  yV^ 
a  question  for  you  to  determine ;"    and  by  the  refusal  of  the  court,  •  '  'T  ^^  -' 

on  request  of  defendant,  to  charge :    "If  the  jury  believe,  from  the    J ^    .         '   , 
evidence,  that  no  definite  time  was  agreed  upon  between  plaintiffs  and"'^    *<  J  y  . 


defendant  for  the  contract  of  agency  to  endure,  then  said  contractV  / 


could  be  terminated  by  either  party  thereto,  at  his  option,  at  any  time 
The  Civil  Code  provides :    "Unless  the  power  of  an  agent  is  cou 
pled  with  an  interest  in  the  subject  of  the  agency,  it  is  terminated,  a 
to  every  person  having  notice  thereof,  by  its  revocation  by  the  prin 
cipal."     Section  2356.     The  interest  which  can  protect  a  power  after 
the  death  of  the  person  who  creates  it  must  be  an  interest  in  the  thing 
itself,  and  not  an  interest  in  that  which  is  produced  by  the  exercise 
of  the  power.    Hunt  v.  Rousmanier,  8  Wheat.  174,  5  L.  Ed.  589.    It 
may  be  conceded  that,  by  the  section  of  the  Civil  Code,  a  revocation 
by  the  principal  terminates  the  agency  in  every  case  where  his  rfeath 
terminates  it,  and  that  the  plaintiffs  herein  had  no  such  interestyfn  the 
subject  of  the  agency   as   rendered  the  agency  irrevocable.     flNever- 
theless,  if,   for  a  valuable  consideration,   the  defendant   agreed  not 
to  revoke  the  agency  for  a  reasonable  time,  and  in  view  of  th^ircum- 
stances  and  nature  of  the  contract  a  reasonable  time  couR^e  ascer- 
tained, he  had  no  legal  right  to  revoke  it  during  such  time.    I'Although 
a  letter  of  attorney  depends,  from  its  nature,  on  the  will  of/ihe  person 
making  it,  and  may,  in  general,  be  recalled  at  his  will,  yet  ii  he  binds 
himself  for  a  consideration,  in  terms,  or  by  the  nature  6i  his  contract 
not   to  change  his  will,  the  law  will  not  permit  him  to  change   it." 
Hunt  V.  Rousmanier,  8  Wheat.  203,  5  L.  Ed.  589.     In  such  case,  i 
he  fails  to  comply  with  his  contract,  he  becomes  liable  to  the  agent 
as  such. 

Even  if,  however,  it  should  be  conceded  that,  under  the  Code,  the 
principal  retains  the  right  to  revoke  a  power,  at  his  option,  in  every'(>t 
case  where  the  agent  is  not  vested  with  an  interest  in  the  subject  . 

of  the   agency,  this  would  not   render  illegal  a  collateral   agreement^-'C^'ytj  fi 
whereby  the  principal  should  agree,  for  a  consideration,  not  to  exer-.     y  Wt-^ 

cisc  the  po/er  for  a  definite  period,  or  for  a  reasonable  time  asccr-^   ^»^  . 
tainable."   iln  case  of  such  an  agreement,  if  the  agency  is  revoked  by 

8  An  agency  created  upon  a  valuable  consideration,  or  as  a  securit.v,  is  uot  \ 
to  b«>  fonfirsed  with  a  power  fr)uplod  with  an  Interest.  Bonney  v.  Smith,  17 
111.  ."..'51  (isrif;i;  lUiffiilo  Land  &  i:xi>l<»nition  Co.  v.  Strong.  1)1  Minn.  S4.  !t7 
N.  VV.  575  (]!)0.'{).  The  former  is  revoi<cd  by  the  death  of  the  prliKijiai,  tin- 
lattfT  is  not.  Hunt  v.  Knusiiiiiiiicr,  s  Wjicjit.  171,  5  L.  VA.  ."iM>  ilsL'.',!.  jiost, 
p.  274.  Th«'  two  are  often  siioUen  of  as  tlioutrii  thcv  were  identical.  <';ir- 
mirhafl's  Case,  (15  L.  J.  (ii.  OOli,  2  Ch.  iVV.\.  75  L.  T.  45  (ISJ)f;),  In  wliich  Llndlcy, 
I>.  .1.,  f|uotes  from  Clerk  v.  Laurie,  2  II.  &  N.  ]0t)  (1S57).  "What  is  meant  liy 
an  authority  coupled  with  an  interest  l»eing  Irrevtjcable  is  this — that  where 
an  agreement  is  ent«'red  into  on  a  sulllclent  consideration,  whereby  an  author- 
ity is  given  for  tiie  jiuriiose  of  reeeiving  some  lienellt  to  thi'  donee  of  the  au- 
thority, such  an  autlmrity  is  irrevo<alile."  In  I'.arr  v.  Sihroeder,  .12  Cal.  (iU!> 
(1*"»;7),  the  court  holds  that,  tliougli  tlie  jxiwer  be  not  (-(tuiiled  with  an  Interest, 


/ 


'^it^^ 


/ 


U/^ 


M- 


/^^         /il'*    -V-    /'-""'-  ^     •.„.  ...vnoN  /    ^     (Parti 

f\   f     lA.y^-^^^   ''^Tie  princ^-^al.  niul  the  >ti;cnt  is  lliorchv  tloprixcd'of  nuthorily  further 
/\  lo  act  as  sudi,   tlio  principal   is  liable  in   damage^  by   reason   of  the 

/^  J  breach  of  his  promise  not  to  recall  the  a.q;ency.     U'hether,  therefore, 

il  be  consiilered  that  the  (lefcndaiU  violated  his  contract  by  refusing 
to  make  consignments  to  the  plaintiiTs,  or  violated  it  by  revoking  the 
agency,  he  would  be  liable  upon  proper  j^deadi/g.  And  in  each  case 
the  rule  of  damages  would  be  the  same,  tha/is.  the  plaintiffs  would 
be  entitled  to  recover  the  direct  or  approximate  damages  sustained 
by  reason  of  defendant's  depriving  them  of  the  benefits  of  the  agency. 
The  court  below  did  not  err  in  refusing  to  give  the  instruction 
asked  by  defendant,  because  that  instruction  ignores  all  evidence  tend- 
ing to  show  that  the  defendant  agreed  not  to  revoke  the  agency.  But 
the  instruction  given,  while  abstractly  correct,  suggests  that,  inde- 
pwident  of  any  express  promise  or  implied  promise  arising  out  of  the 
nature  of  the  contract,  the  defendant  had  no  legal  right  to  put  an  end 
to  the  agency  until  the  expiration  of  a  "reasonable  time."  *  *  * 
[The  court  held  that,  even  though  under  the  California  Code  the 
agency  for  a  consideration  could  be  revoked,  the  principal  is  never- 
theless liable  in  damages  by  reason  of  his  breach  of  his  promise  not 
I  /— /■  I       A"       to  recall  the  agency.]      Reversed  and  remanded  for  a  ij«w  trial  be- 

vAjr^"'^  cause  of  error  in  fixing  the  amount  of  the  damages.     ''/  . 

"■■   ■' ,; •     L'  1  l<J^M^  » '  ^'    '■' ^*- ''  * '-^'^  ^^ 
(C)  ^gfj/^r  jt^f^^^nmwiTnhresf 

.{■       monta6^^^eA^ivIc66ij^ 

/fi(Supreme  Court  of  Utah,  1S97.     15  Uti^,  318,  49  Pac. 

Action  to  quiet  title  to  20  acres  of  land  which  Montague  claimed 
under  a  quitclaim  deed  from  Adolph  Ilankammer,  by  Jos.  C.  Ilemin- 
gray,  attorney  in  fact.     McCarroll  offered  in  evidence  an  earlier  deed 
from  Hankammer  to  one  Ryan,   who  conveyed  to  defendant.     The 
,  deed  contained  a  revocation  of  Hemingray's  power  of  attorney.     The 

land  had  been  patented  by  Hankammer  under  act  of  Congress  grant- 
ing additional  land  to  soldiers  and  sailors.  From  judgment  for  plain- 
tiff defendant  appeals. 

iSIiNER,  J.»     *     *     *     Adolph  Hankammer,  owning  the   right   to 

^^.-"^"^'mfvA.tx  land  under  section  2306,  Rev.  St.,  made  an  irrevocable  power 

'of  attorney  to  Hemingray  to  enter  upon  and  take  possession  of  the 

still,  if  it  is  given  as  security  for  tlie  payment  of  money,  whether  it  be  express- 
ly stated  in  the  agreement,  or  the  intent  be  shown  by  the  nature  of  the  con- 
tVact,  the  principal  will  not  be  permitted  to  revoke  it,  either  directly  or  indi- 
rectly, except  upon  payment  of  the  money  intended  to  be  secured. 

To'  permit  a  party  to  render  ineffectual  a  security  so  created  would  be 
against  the  clearest  principles  of  equity  and  justice.  Evans  v.  Fearne,  16  Ala. 
689,  50  Am.  Dec.  197  (1849),  quoting  Story  on  Agency,  §  477. 

»  Part  of  the  opinion  is  omitted.  . 

ir»U  "  ^  ^'  ^'^-  "^^ 


u./^' 


^^a^N  7lu/l^ 


^(U^ 


Ch.  u)  TERMINATION    OF    THE    RELATION  210 

land  in  question,  and  in  consideration  of  five  dollars,  paid  by  the 
attorney,  he  was  irrevocably  vested  with  power  to  grant,  bargain, 
sell,  lease,  convey,  and  confirm  the  same  to  the  purchaser,  and  deliver 
a  deed  of  conveyance  thereof.  Hankammer  forever  renounced  all 
right  in,  and  to  revoke,  any  of  said  powers,  or  to  appoint  any  other 
person  to  execute  the  same,  and  forever  renounced  all  right  on  his 
part  to  do  what  the  attorney  was  authorized  to  do,  and  released  to  the 
attorney  all  claims  to  any  of  the  proceeds  of  sale,  and  ratified  the 
acts  of  the  attorney  as  absolute,  both  in  conveying  and  retaining  the 
proceeds  of  the  sale  of  the  land.  This  power  of  attorney  not  only 
carried  with  it  an  assignment  of  the  interest  of  Hankammer  in  the  land 
to  Hemingray,  but  vested  in  him  the  legal  right  to  convey  the  title. 
It  was  a  power  coupled  with  an  interest.  It  was  valid  as  against 
Hankammer,  his  heirs,  assigns,  and  grantees.  The  proceeds  of  the 
sale  of  the  land  were  vested  in  the  attorney,  and  renounced  by  the 
principal.  In  consideration  of  five  dollars,  paid  to  Hankammer  by 
Hemingray,  Hankammer  expressly  renounced  not  only  the  proceeds 
of  the  sale  of  the  land,  but  all  power  and  authority  over  the  prop- 
erty, expressly  confirming  what  should  be  done  by  the  attorney,  and 
made  the  act  irrevocable.  This  power  was  irrevocably  vested  in  the 
attorney  until  exercised.  The  power  was  exercised  when  the  convey- 
ance was  made  to  the  plaintiff.  By  that  act  and  deed  all  right,  title, 
and  interest  in  the  property  was  vested  in  Montague.  The  conveyance 
by  Hankammer  to  the  defendant's  predecessor  in  interest,  as  well  as 
the  attempted  revocation  of  the  power  of  attorney  to  Hemingray,  were 
inoperative  and  ineffectual  either  to  pass  the  title  or  revoke  the  power. 
Hankammer  had  parted  with  his  interest  before  he  executed  the  deed 
to  Ryan,  through  whom  the  defendant  obtained  title,  and  he  had  no^ 
power  to  revoke  the  authority  embraced  in  the  power  of  attorney. 

While  a  power  of  attorney,  by  its  terms,  may  be  expressly  declared 
to  be  irrevocable,  yet  if  the  agent  has  no  interest  in  its  execution,  and 
there  is  no  valid  consideration  for  it,  it  is  treated  as  a  mere  nude  pact. 
and  is  deemed  in  law  to  be  revocable,  upon  the  general  principle  that 
he  alone  who  has  an  interest  in  the  execution  of  an  act  is  also  en- 
titled to  control  it.  But,  where  the  power  is  coupled  with  an  interest, 
or  where  it  is  given  for  a  valuable  consideration,  unless  there  is  an 
express  sti[)ulation  that  it  shall  be  revocable,  it  is  from  its  character, 
in  contemplation  of  law,  irrevocable,  whether  terms  expressly  making 
it  so  are  exjjressed  in  it  or  not.  In  this  case  the  power  became  a  part 
of  the  contract,  coupled  with  a  valid  consideration.  It  therefore  be- 
came irrevocable,  and  the  attempted  revocation,  as  well  as  the  deeds 
to  those  through  whom  defendant  derived  his  title,  are  wholly  insuf- 
ficient to  vest  any  title  in  the  defendant.  Mcchem,  Ag.  §§  205,  206; 
vStory,  Ag.  §  477;  Hunt  v.  Rousmanicr's  Adm'rs.  8  Wheat.  174,  5 
L.  Ed.  5.S9;  Barnes  v.  I'oiricr,  12  C.  C.  A.  9,  64  l<c(I.  14;  Webster  v. 
Luther,  16.3  U.  S.  3.31,  16  Suj).  Ct.  963,  41  L.  Ed.  179. 

The  court  below  held  correctly  that  the  legal  title  to  the  properly 


220  THE  KKLATioN  (Part  1 

was  vested  in  the  plaititifT.  This  conclusion  bcincf  reached,  it  is  un- 
necessary to  cHscuss  any  other  errors.  The  judgment  of  the  district 
court  is  allirnied,  with  costs. 


^'" 


\ 


TERWILUGKR  v.  ONTARIO,  C.  &  S.  R.  CO. 

(Court  of  Appeals  of  New  York.  18DG.  149  N.  Y.  86,  43  N.  E.  432.) 
Action  for  the  price  of  1,224  railroad  tics  cut  on  plaintiff's  land  and 
sold  to  defendant.  The  latter  claimed  plaintiff  had  authorized  one 
Wheeler  to  sell  the  ties  and  receive  the  pay  therefor,  and  that  it 
had  jiaid  Wheeler  in  full.  Plaintiff  denied  Wheeler's  authority.  Ap- 
])eal  from  a  judgment  in  favor  of  plaintiff. 

Andrews,  C.  J.^"  The  principal  question  on  this  appeal  arises  on 
the  exception  by  the  defendant  to  the  refusal  of  the  referee  to  make 
any  finding  upon  the  question  whether  the  plaintiff,  in  the  summer 
of  1SS9,  authorized  Wheeler  to  sell  the  ties  to  the  defendant,  and 
apply  the  proceeds  of  the  sale  in  payment  for  the  timber  which  had 
been  cut  by  the  plaintiff,  without  authority,  from  Wheeler's  lands. 
The  evidence  upon  this  question  was  conflicting.  The  defense  rested 
substantially  upon  the  assertion  that  such  authority  was  given ;  that 
it  was  executed  by  a  sale  and  delivery  of  the  ties  thereunder  by 
Wheeler  to  the  defendant ;  and  that,  the  defendant  having  subse- 
quently paid  Wheeler  therefor,  the  debt  was  discharged.  The  re- 
fusal of  the  referee  to  pass  upon  the  question  of  Wheeler's  original 
authority  was  put  upon  the  ground  that,  assuming  it  to  have  been 
given,  it  was  subsequently  revoked  by  the  act  of  the  plaintiff  in 
himself  selling  and  delivering  the  ties  to  the  defendant.  It  became, 
therefore,  as  the  referee  held,  an  immaterial  issue,  which,  if  found 
in  favor  of  the  defendant,  would  not  affect  the  result,  since,  by  the 
general  rule,  an  authority  once  given,  if  revoked  before  execution, 
except  where  an  element  of  estoppel  intervenes,  is  the  same  as  to 
third  persons  as  though  it  had  never  existed. 

The  primary  question  presented  by  this  ruling  of  the  referee  in- 
volves an  inquiry  into  the  nature  of  the  authority  given  by  the  plain- 
tiff to  Wheeler.  It  is  to  be  conceded,  for  the  purpose  of  this  appeal, 
that  Wheeler  possessed  the  authority  which  the  evidence  on  the 
part  of  the  defendant  tended  to  establish,  and  that  it  was  conferred 
for  the  purposes  which,  by  direct  evidence  or  by  fair  inference,  can 
be  collected  from  the  evidence  most  favorable  to  the  defendant.  If 
the  authority  conferred  on  W^heeler  was  a  mere  naked  authority,  by 
which  we  understand  an  authority  in  the  execution  of  which  the 
agent  has  no  other  interest  than  that  which  springs  from  his  em- 
ployment as  agent  and  his  right  to  earn  his  compensation,  then,  ac- 
cording to  the  general  rule,  it  was,  while  executory,  revocable  at  any 

10  Part  of  the  opinion  is  omitted. 


AvO 


'  /' 


Ch.  5) 


TERMINATION    OF    THE    RELATION 


221 


time,  at  the  pleasure  of  the  plaintiff.  In  case  of  a  naked  power,  the 
authority  of  the  agent,  derivative,  and  not  original,  ceases  when  the 
principal,  for  whatever  reason,  withdraws  the  delegation,  and  ter- 
minates  the  agency.  There  is  a  quaUfication  of  the  rule  where  the 
agent  has  entered  upon  the  execution  of  the  authority  before  revo-  ^ 
cation,  and  has  so  bound  himself  that  a  retraction  of  the  authority/ 
would  subject  him  to  liabihty.  In  such  cases  the  principal  cannot 
revoke  the  authority  as  to  the  part  of  the  transaction  remaining 
unexecuted,  at  least  not  without  indemnifying  the  agent.  Gelpcke  v. 
Quentell,  74  N.  Y.  599 ;  Hodgson  v.  Anderson,  3  Barn.  &  C.  842 ; 
Blasco  v.  Fletcher,  14  C.  B.  (N.  S.)  147;  Goodwin  v.  Bowden,  54 
Me.  424. 

/  But  an  authority  may  be  irrevocable  by  reason  of  its  purpose  and 
[the  circumstances  attending  its  creation.  The  cases  of  an  authority 
\coupled  with  an  interest  are  of  this  character.  What  constitutes  an 
authority  coupled  with  an  interest  wa^considered  in  one  of  the  mas- 
terly judgments  of  Chief  Justice  Mar^all,  in  Hunt  v.  Rousmanier, 
8  Wheat.  174,  5  L.  Ed.  589,  post,  p.  274.)  In  that  case  the  owner  of  an 
interest  in  a  certain  vessel,  then  at  sea,  t/6  secure  a  loan  of  money,  exe- 
cuted to  the  lender  contemporaneouslv/vfith  the  loan  a  power  of  attor- 
ney authorizing  him  to  sell  the  borrower's  interest  in  the  vessel,  which 
power,  by  its  terms,  was  to  beceirie  void  on  payment  of  the  loan. 
The  borrower  died  before  payment,  and  the  question  was  presented 
whether  his  death  operated  to  revoke  the  power.  It  wasf  decided  that 
the  power  was  revoked  by  the  death  of  the  grantor,  f  The  general 
doctrine  that  a  power  must  be  exercised  in  the  name  of'vthe  principal, 
and  does  not  survive  his  death,  was  held  to  be  applicable.  But  the 
court,  in  the  decision  of  the  question,  proceeded  to  consider  the  ex- 
ception to  the  rule  in  cases  where  the  power  was  coupled  with  an 
interest,  and  to  define  the  meaning  of  that  phrase.  In  a  luminous 
statement  the  chief  justice  confined  the  scope  of  the  exception  to 
cases  where,  together  with  the  power,  there  was  vested  in  the  donee 
an  estate,  right,  or  interest  in  the  subject  of  the  power,  as  distin- 
guished from  an  interest  in  the  proceeds  of  the  power  when  exer- 
cised. In  the  former  case  he  declared  that  the  power  would  not 
be  extinguished  by  the  death  of  the  creator  of  the  power,  because  it 
attached  to  the  estate  of  the  donee  in  the  subject  of  the  power,  and 
was  capable  of  execution  in  his  own  name  after  the  death  of  the 
principal,  unlike  cases  where  the  power  was  unconnected  with  any 
interest  in  the  thing  itself,  and  the  only  interest  was  in  the  execution 
of  the  power.  The  distinction  between  the  cases  of  a  power  given 
for  the  purpose  of  security  and  a  power  given  for  the  same  purpose, 
but  suppletncnted  by  a  transfer  of  an  interest,  seems  technical ;  but 
in  the  latter  case  it  at  least  preserves  the  substance  and  effectuates 
the  intent,  while  it  obviates  in  the  particular  case  the  general  doctrine 
that  a  power  is  determined  by  the  death  of  the  creator  of  the  jiower. 


/         / 


] 


1:22  TllK    KKLATION  (Parti 

In  Watson  v.  Kini::.  4  Camp.  HI.  \.ox<\  Kllenborou,<;li,  in  a  case 
very  similar  to  that  of  Hunt  v.  Rousnianior,  also  hoUl  that  a  power  of 
attorney  to  a  creditor  to  sell  a  vessel  was  revoked  by  the  death  of 
the  principal,  anil  upon  the  same  _i;ri)uu(l,  namely,  that  it  could  not 
thereafter  be  executed  in  his  name.  The  same  point  was  ruled  in 
equity  in  Lopard  v.  Vernon,  2  Yes.  &  B.  51,  where  it  was  held  that 
a  powder  given  to  a  creditor  to  receive  a  debt,  expressly  for  the  pur- 
pose of  liquidating  the  claim,  unaccompanied,  however,  by  any  as- 
signment of  the  debt,  was  revoked  by  the  death  of  the  principal. 
Knapp  v.  Alvord.  10  Paige,  205,  40  Am.  Dec.  241,  is  an  illustration 
of  a  power  coupled  with  an  interest.  There  a  power  of  attorney  to 
sell  a  stock  of  goods  and  apply  the  proceeds  upon  liabilities  incurred 
and  to  be  incurred  by  the  donee  of  the  power  was  given,  accompanied 
by  the  possession  of  the  goods,  and  it  was  held  that  it  was  not  re- 
voked by  the  death  of  the  principal,  because  it  was  a  power  coupled 
with  an  interest.  The  fact  that  the  possession  of  the  goods  accom- 
panied the  power  was  the  controlling  point  in  the  decision.  Testa- 
mentary pow-ers,  from  their  nature,  necessarily  survive  the  death  of 
the  testator.  They  usually  accompany  some  estate  given  by  the 
will  to  the  donee  of  the  power,  or  are  regarded  as  trusts,  which,  if 
accepted,  the  donee  is  in  conscience  bound  to  execute.  See  Franklin 
k\  Osgood,  14  Johns.  527. 

I  There  are  other  familiar  cases  of  irrevocable  powers,  because 
Voupled  with  an  interest,  such  as  powers  of  sale  accompanying  mort- 
gages, or  powers  to  do  other  acts  affecting  real  or  personak  property, 
to  make  effectual  an  interest  or  right  in  the  subject  of  tl^e  power 
vested  in  the  donee,  and  to  which  the  power  is  auxihary."  j  Powers 
of  this  character  are  neither  revocable  by  the  grantor  of  tj^e  power, 
nor  are  they  revoked  by  his  death.  Bergen  v.  Bennett/ 1  Gaines, 
Cas.  1,  2  Am.  Dec.  281.  Chief  Juytice  Marshall's  definition  of  a 
power  coupled  with  an  interest  has/been  generally  accepted  in  this 
country,  but  in  some  cases  his  classification  has  not  been  accurately 
observed.  See  Hutchins  v.  Hebbard,  34  N.  Y.  24.  Indeed,  the  Eng- 
ish  courts  gave  a  wider  meaning  to  the  phrase  than  in  the  close 
definition  of  Chief  Justice  Marshall.  In  Watson  v.  King,  supra. 
Lord  EUenborough  speaks  of  the  power  in  tKat  case  as  a  power 
coupled  with  an  interest,  and  in  Smart  v.  ^andars,  5  C.  B.  895, 
Wilde,  C.  J.,  referring  to  the  authorities,  said:  "The  result  seems  to 
be  that,  where  an  agreement  is  entered  into  o^i  a  sufficient  considera-* 
tion,  whereby  an  authority  is  given  for  the  pui^ose  of  securing  some 
benefit  to  the  donee  of  the  authority,  such  an  authority  is  irrevocable-' 
This  is  what  is  usually  meant  by  an  authority  coupled  with  an  n 

11  A  power  coupled  with  an  interest  is  created  wlien  a  landlord,  havin/ an 
interest  in  certain  crops,  and  bein^  indebted  to  the  tenant,  author!^  the 
tenant  to  sell  the  crops  and  reimburse  himself.  Such  a  power  cannoT  be  re- 
voked bv  the  landlord.  Big  Four  Wilmington  Coal  Co.  v.  Wren,  11.")  111.  App. 
331  (1004). 


Ch.  5) 


TERMINATION    OF    THE    RELATION 


223 


terest."  The  distinction  between  the  English  and  American  cases  is 
rather  in  words  than  substance.  Upon  the  same  facts  the  decisions 
in  both  judicatures  are  the  same.  Both  in  Hunt  v.  Rousmanier  and 
Watson  V.  King  the  death  of  the  principal  was  held  to  revoke  the 
power,  although  in  one  case  it  was  regarded  as  a  power  coupled  with 
an  interest,  and  in  the  other  that  it  was  not. 

But  there  are  classes  of  powers  which  are  irrevocable  by  the  act 
of  the  principal,  although  they  do  not  come  within  Chief  Justice 
Marshall's  definition  of  powers  coupled  with  an  interest.  This  is 
clearly  recognized  by  that  eminent  judge  in  the  case  to  which  refer- 
ence has  been  made.  After  stating  the  general  rule  that  a  power  may 
at  any  time  be  revoked  by  the  party  conferring  it,  he  says :  "But  this 
general  rule,  which  results  from  the  nature  of  the  act,  has  sustained 
some  modification.  Where  a  letter  of  attorney  forms  part  of  a  con- 
tract, and  is  security  for  money,  or  for  the  performance  of  any  act 
which  is  deemed  valuable,  it  is  generally  made  irrevocable  in  terms, 
or,  if  not  so,  is  deemed  irrevocable  in  law ;"  and  he  proceeds  to  state 
that  the  power  to  sell  the  vessel  by  Rousmanier  in  that  case  could 
not  have  been  revoked  by  him  during  his  life,  but,  not  being  a 
power  coupled  with  an  interest,  it  was  revoked  by  his  death.  Kent 
uses  similar  language.  He  says  (2  Kent,  Comm.  644) :  "But  where 
it  [power  of  attorney]  constitutes  part  of  a  security  for  money,  or  is 
necessary  to  give  efTect  to  such  security,  or  where  it  is  given  for  a 
valuable  consideration,  it  is  not  revocable  by  the  party  himself, 
though  it  is  necessarily  revoked  by  his  death."  And  Story,  in  his 
work  on  Bailment  (section  209),  says :  "But  if  it  is  given  as  part  of 
a  security,  as  if  a  letter  of  attorney  is  given  to  collect  a  debt  as  a 
security  for  money  advanced,  it  is  irrevocable  by  the  party."  This 
doctrine  has  support  in  adjudged  cases.  Hunt  v.  Rousmanier,  supra ; 
Walsh  v.  Whitcomb,  2  Esp.  566;  Gaussen  v.  Morton,  10  Barn.  &  C 
731;  Hutchins  v.  Hebbard,  supra;  Wilde,  C.  J.,  Smart  v.  Sandars, 
supra;    Raymond  v.  Squire,  11  Johns.  47.     *     *     * 

The  oral  authority  given  by  the  plaintiff  to  Wheeler  to  sell  the 
ties  (which  must  here  be  assumed),  if  it  were  a  naked  power,  was 
not  so  far  executed  at  the  time  of  the  alleged  revocation  that  the 
right  to  revoke  it  had  been  lost.  The  verbal  contract,  which  before 
that  time  had  been  entered  into  between  Wheeler  and  the  defendant 
for  the  sale  of  the  ties,  was  not  binding  upon  either  party.  The 
contract  was  for  the  sale  of  chattels  exceeding  $50  in  value,  and,  while 
the  terms  of  the  sale  were  definitely  fixefl,  there  was  neither  writing, 
delivery,  nor  part  payment,  so  as  to  take  the  contract  out  of  the 
statute.  The  plaintiff  was  not  bound  to  complete  the  sale  (Farmer 
v.  Robinson,  2  Camp.  339,  note ;  Reed  v.  Latham,  40  Conn.  452), 
and  as  between  himself  and  Wheeler  he  could  revoke  the  autlKjrity 
of  the  latter  (if  a  mere  naked  power),  since  the  contract  entered  into 
by  the  agreement  had  not  been  so  fnr  cxf-rutofl  a«;  to  subject  him  to 


). 


/■< 


224  TiiK  KKLATioN  (Part  1 

any  liability.  If  the  nntliorily  to  Whoolor  was  irrevocable,  it  was  be- 
cause of  the  nature,  consideration,  and  purpose  for  which  the  a.c^ency 
was  constituted,  l^nless  there  was  a  consideration  for  the  autliority 
conferred  on  Wheeler  to  sell  the  ties  and  apply  the  proceeds  on  his 
claim,  it  is  plain  that  it  was  not  irrevocable.  Raleigh  v.  Atkinson, 
6  I\tees.  &  \V.  670.  Without  going  into  particulars,  it  is  sufficient  to 
say  that  the  evidence  given  on  the  part  of  the  defendant  would,  in 
our  opinion,  justify  an  inference  that  Wheeler  accepted  the  arrange- 
ment proposed  by  the  plaintiff,  and  forbore  the  pursuit  of  his  lumber 
or  its  proceeds,  in  reliance  upon  the  authority  given  him  by  the 
plaintitT  to  sell  the  ties,  and  apply  the  proceeds  on  his  claim. 

The  position  of  an  agent  holding  an  irrevocable  power  for  the  sale 
of  chattels,  not  connected  with  possession  of  the  property  or  any  in- 
terest in  the  nature  of  a  title,  general  or  special,  in  the  subject  of  the 
power,  is  peculiar.  The  power  usually  given  as  a  security  has  some 
analogy  to  a  pledge  or  lien,  although  distinct  from  either.  It  bears  a 
closer  resemblance  to  the  hypothecation  of  the  Roman  law,  where, 
by  force  of  the  contract,  without  any  transfer  of  possession,  a  right 
attaches  to  the  property  in  the  person  to  whom  the  hypothecation 
is  made.  But  unlike  the  case  of  an  hypothecation,  the  attorney, 
where  no  estate  or  possession  passes  with  the  power,  has  only  a 
contract  right.  The  fact  that  possession  does  not  go  with  the  power 
subjects  the  holder  of  the  power  to  the  risk  that  the  purpose  of  the 
power  may  be  frustrated  by  a  transfer  by  the  owner  of  the  chattels 
to  a  purchaser  in  good  faith  for  value  without  notice. 

It  will  be  for  the  court  or  jury  on  a  new  trial  to  determine,  upon 
the  facts  found,  whether  there  was  any  valid  consideration  within 
the  law  applicable  to  executory  contracts  to  uphold  the  authority.  If 
such  consideration  existed,  then  we  are  of  the  opinion  that  the  au- 
thority was  irrevocable,  and  that  the  payment  by  the  defendant  to 
Wheeler,  under  the  contract  made  with  him,  was  binding  upon  the 
plaintiff.  In  our  opinion,  the  referee  erred  in  refusing  to  find  upon 
the  question  of  authority  in  Wheeler  to  sell  the  ties  and  apply  the 
proceeds  on  his  claim.  If  no  such  authority  existed,  there  is  no  de- 
fense to  the  action.  If  it  was  given,  but  was  not  based  upon  any 
consideration  which  the  law  deems  sufficient  to  uphold  an  executory 
contract,  then  we  are  of  opinion  that  it  was  revocable,  and  that  it  was 
a  question  of  fact  upon  the  evidence  whether  there  was  an  actual 
revocation  before  the  defendant  paid  Wheeler. 

The  judgment  should  be  reversed,  and  a  new  trial  ordered. 


Ch.5) 


TERMINATIOX   OF   THE    RELATION 


TAYLOR  V.   BURNS  et  al. 


-^ 


225 


(Supreme  Court  of  Arizona,  1904.     8  Ariz.  463,  76  Pac.  623.) 

Suit  to  quiet  title  to  three  mining  claims  located  by  Burns,  who 
sold  one-fourth  interest  to  one  Duncan.  On  March  9,  1903,  Burns 
and  Duncan  contracted  for  the  sale  of  the  claims  with  Kaufman,  as 
trustee.  Taylor  bases  his  claim  on  an  agreement  made  with  Burns 
March  26,  1901.     Judgment  for  defendants. 

Sloan,  J.^-  [After  stating  the  facts:]  *  *  *  Taking  the  in- 
strument as  a  whole,  it  appears  that  it  was  intended  merely  as  a 
power  of  attorney  authorizing  Taylor  to  efifect  i,  sale  of  the  mines, 
upon  the  terms  mentioned,  as  the  agent  of  Burns. !  Nor  is  this  power 
of  attorney  one  which,  in  legal  effect,  can  be  construed  as  being 
coupled  with  an  interest  in  the  mining  claims,  so  that  it  could  not 
be  revoked.  There  is  ;iothing  in  the  instrument  which  evidences  an 
intention  that  Taylor  a[hould  acquire  an  interest  in  the  premises  pend- 
ing a  sale  of  the  same.'^^  Mention  of  future  labor  as  part  consideration 
is  of  no  avail  as  conferring  an  interest,  for  it  fails  to  bind  Taylor  to 
perform  any  work ;  nor  does  it  state  by  whom  this  labor  was  tp  be 
performed,  when  it  was  to  be  done,  or  of  what  it  should  consist.\  It 
is  not  even  provided  that  Taylor  should  have  any  right  of  possession 
during  the  pendency  of  the  sale,  or  sthould  pay  any  of  the  expense 
of  the  annual  labor  required  by  law.     Manifestly  the  only  interest  f 

which  Taylor  acquired  under  the  agreement  was  the  contingent  one 
of  sharing  in  the  proceeds  of  the  sale  in  case  he  should  effect  it:    The  ^  ^^,^^/yy    /  ' 
interest  which  will  render  the  power  of  attorney  irrevocable  must 
be  in  the  subject  of  the  power,  and  not  pertain  to  the  power  itself.  L/l/l£4rtX4i 

As  we  have  said,  there  is  nothing  in  the  instrument,  taken  as  a/   ")      r 

{>1ik  a  ./ 


/^ 


iVfJ^^ 


whole,  which  gave  Taylor  any  interest  in  the  mining  claims.  He  did 
not  have  the  right  of  possession.  His  sole  interest  related  to  the 
consideration  or  proceeds  to  be  derived  from  the  sale.  His  power 
or  agency  was  not,  therefore,  in  legal  contemplation,  one  coupled 
with  an  interest.  In  the  case  of  Trickey  v.  Crowe,  8  Ariz.  176,  71  Pac. 
96.S,  this  court  declared,  in  speaking  of  a  power  of  attorney  coupled 
with  an  interest,  that  by  "such  interest  is  not  meant  an  interest  in  that 
which  is  ri;-oduccd  by  the  exercise  of  power,  but  it  nuist  be  an  in- 
terest in  tlie  property  onovhich  the  power  is  to  operate";  and  fur- 
ther, thatr'the  authority  t^  sell  on  commission  is  not  an  nufhorit\ 
coupled  w^i  an  interest." 

We  hold,  therefore,  that  Ihe  agreement  clid  not  confer  any  title  to 

12  Anothnr  portion  *)f  tills  (t|fi)lon  Is  found  on  p.  12. 

'•■'.V  plrdL'f  rif  i»ro]M'rt.v,  ncc/iniiianlfd  liy  an  Irrcvnciilili'  aficncy,  l.s  a  pouor 
conplt<l  with  ill!  intcri'st.  Miller  v.  Ilimie  Ins.  Co.,  71  N.  J.  Law,  175,  58  Atl. 
98  (l!)Ol). 

(join). ru.&  \. — i.j 


7}\ 


'-"^1. 


J 


.*  '    <^i^\' U} 


-I'O  Tiiio  iu:i, AXIOM  (Pait  1 

or  estate  in  the  mines  in  ([uestion  upon  'l'a\lor,  and  that  the  liniUni^s 
and  decree  of  tlie  trial  court  are  correct.  The  judgnieni  will  l)e  al- 
lumed. 


Appeal  of  llAR'riJ'.V  et  al. 
(Simronio  Cmirt  of  reinisx  IvMiiia.   lS(i(i.     n:!   Tji.  LM'J.  01    Am.  Dec.  207.) 

Hannah  D.  Gallion  on  Jnne  30,  1S06.  apjjoinlcd  Hartley  and  Minor 
attorneys  to  collect  and  receive  all  money  and  property  coming  to  her 
as  heir  of  John  Douglass.  July  20,  1866,  she  gave  another  power  to 
one  Rowland  in  which  she  revoked  the  former  power.  September  29, 
1866,  Hartley  and  Minor  petitioned  the  Orphans'  Court  for  a  citation 
to  the  administrator  of  Douglass  to  settle  his  account.  The  petition 
was  dismissed,  and  Hartley  and  Minor  appeal. 

Thompson,  J.  There  was  no  error  committed  by  the  court  below 
in  holding  the  power  of  attorney  of  Hannah  Gallion  to  the  appellants 
to  be  revocable.  It  was  an  ordinary  agency,  constituted  by  letter  of 
attorney,  to  act  for  her  to  enforce  a  settlement  of  his  accounts  by  the 
administrator  of  her  father's  estate,  in  which  she  was  interested,  and 
to  collect  any  moneys  or  property  that  might  belong,  or  be  coming  to 
her.  For  these  services  the  attorneys  were  to  have  one-half  of  the  net 
proceeds  of  what  they  might  receive  or  recover  for  her.^*  The  plain- 
tiffs in  error  su])pose  that  this  clause  rendered  the  power  irrevocable 
by  their  principal,  under  the  idea  that  it  was  a  power  coupled  vvith  an 
interest.  This  was  a  mistake,  as  all  the  authorities  show.  To  impart 
an  irrevocable  quality  to  a  power  of  attorney  in  the  absence  of  any 
express  stipulation,  and  as  the  result  of  legal  principles  alone,  there 
must  co-exist  with  the  power  an  interest  in  the  thing  or  estate  to  be 
disposed  of  or  managed  under  the  power. 

An  instance  of  frequent  occurrence  in  practice  may  be  given  of  the 
assignment  of  vessels  at  sea,  with  a  power  to  sell  for  the  benefit  of  the 
holder  of  the  power,  or  of  anybody  else  who  may  have  advanced  money 
and  who  it  was  agreed  should  be  secured  in  that  way.  So  where 
security  has  been  transferred  with  a  power  to  sell,  and  generally,  I 
presume,  in  all  cases  of  property  pledged  for  the  security  of  money 
where  there  is  an  accompanying  authority  to  sell  to  reimburse  the 
lender  or  creditor.  In  Hunt  v.  Rousmanier,  8  Wheat.  174,  5  L.  Ed. 
589,  this  doctrine  is  clearly  and  fully  elucidated  in  the  opinion  of  Mar- 
shall, C.  J.  In  Bancroft  v.  Ashhurst,  2  Grant  Cas.  513,  a  case  tried  at 
Xisi  Prius  before  me,  at  which  my  brethren  sat  as  adsessors,  there  is 
a  pretty  full  examination  of  the  question  herein  involved,  and  all  the 
authorities  referred  to,  and  the  conclusion  is  fully  in  accordance  with 
Hunt  v.  Rousmanier,  and  sustains  the  above  view  of  a  power  coupled 
with  an  interest. 

!-»  Authority  to  sell  property  aiul  take  as  compensation  a  per  cent,  of  (he 
proceeds  is  revocahle.  State  ex  rel.  Walker  v.  Walker,  SS  Mo.  'IV.)  (IsSo) ; 
-Marbury  v.  Barnet,  17  Misc.  Kep.  8S6,  40  N.  Y.  Supp.  76  (189G). 


djiv 


^      f^f^AM^'^^^'^^^r'^l''''    ""^^    RELATION  2-J7 

'       In  the  case  in  hand  the  pOAjjfer  and  the  interest  could  not  co-exist.  , 
The  interest  the  appellants  wduld  have  would  be  in  the  net  proceeds  ,  r 

collected  under  the  power,  and  the  exercise  of  the  power  to  collect  the  y-'-  ■■  - 1-^-'*^-*^^ ' 
proceeds  would  ipso  facto  extinguish  it  entirely,  or  so  far  as  exercised. 
Hence  the  appellants'  interest  would  properly  begin  when  the  power 
ended.  This  distinction  is  noticed  in  Hunt  v.  Rousmanier ;  but  neither 
by  this  test,  nor  any  other,  was  the  power  of  attorney  in  question  ir- 
revocable, and  this.Ju<igment  must  be  affirmed. 


(B)  Pot'.'er  to  Revoke  and  Right  to  Revoke 

SHEAHAX  V.  NATIONAL  S.  S.  CO. 

(Circuit  Court  of  Appeals  of  United  States,  Second  Circuit,  ISOS.    S7  Fed.  1G7. 

30  C.  C.  A.  593.) 

Judgment  for  defendant  and  plaintiff  sued  out  this  writ  of  error. 

Before  Wallace,  Lacombe,  and  Shipmax,  Circuit  Judges. 

Pek  Curiam.  This  is  an  action  to  recover  damages  for  breach 
of  contract.  The  plaintiff  was  the  sole  witness,  and  the  only  contract 
with  defendant  which  his  testimony  tended  to  establish  was  one  made 
in  1867,  whereby  defendant  employed  him  as  its  agent  to  sell  tickets 
on  commission,  with  no  limitation  as  to  time  or  provision  requiring 
notice  of  termination.  After  he  had  continued  in  such  employment 
about  nine  years,  defendant  abru])tly  terminated  the  contract.  In  the 
absence  of  any  provision  requiring  notice  as  a  condition  precedent  to 
termination,  or  of  any  clause  fixing  a  term  of  employment,  defendant 
was  entitled  to  dismiss  its  agent  at  pleasure,  without  thereby  giving 
plaintiff  a  cause  of  action  f(jr  damages  sustained  by  reason  of  such  dis- 
charge.   The  judgment  of  the  circuit  court  is  affirmed. 


/ 


L9-C^ 


HOOVER  v.  PERKINS  \VINDMILL/&  AX^  6o.      "^ 

fSiipn-iiM'  Court  (.f  .Miuiicsota,  ISSO.    41   Miiiii.  1  i::,  \2  'S^.^'.  fifiO.)  / 

Jufjgment  for  defendant.     Plaintiff  appeals.  vUl>')*^ ' 

UiCKi.NSo.v,  J.  In  January,  1SS6,  the  j^laintiff  and  the  dcfcndaiu 
entered  into  a  written  contract,  by  the  terms  of  which  the  plainlilY 
became  the  agent  of  the  defendant,  for  the  sale  of  windnn'Ils  in  the 
state  of  Miimcsota.  It  is  unnecessary  to  state  with  particularity  all 
the  provisions  of  the  contract.  It  may  be  said  generally,  however, 
that  the  mills  were  to  be  shipi)cd  to  the  plaintiff  at  an  agreed  .schedule 
price.  He  was  to  bear  all  the  expense  incident  to  keeping  and  selling 
them,  and  tf)  remit  the  proceeds  of  all  sales  to  the  defendant,  himself 
guarantying  the  payment  of  all  notes  taken  upon  sales.  The  (iefcndant 
was  to  return  to  ihe  plaintiff  all  notes,  cash,  and  drafts  so  remittee, 


-28  Tiiio  KKi.ATioN  (Parti 

after  it  had  realized  therefrom  the  schctUile  jirice  of  the  mills  shipped 
to  the  plaintitY;  and  wlieii  the  dcfemhint  should  have  "eollectcd  for 
all  of  the  goods  as  above,  and  the  aforesaid  notes  shall  be  paid  for 
each  year's  business,  then  they  shall  pay  to  the  party  of  the  second 
part  [plaintiff]  three  dollars  for  each  windmill  sold  that  year,  to  pay 
him  for  the  risk  in  securing  the  payment  of  said  notes  and  accounts." 
There  was  nothing  in  the  contract  relative  to  the  time  during  which 
it  should  continue  in  force,  unless  some  inference  is  to  be  drawn  from 
the  language  which  we  have  recited  and  italicised.  In  June,  1887,  in 
the  course  of  the  settlement  of  some  matters  growing  out  of  the  above 
contract,  the  parties  entered  into  a  further  agreement  in  writing,  in 
which,  among  other  things,  it  was  agreed  that  the  business  between 
them  should  "be  continued"  under  the  previously  executed  contract ; 
it  being  further  agreed  that  the  parties  should  examine,  compare,  and 
check  up  accounts  between  them  "during  the  month  of  January  of  each 
year,  and  as  much  oftener  as  either  of  the  parties  may  desire  during 
the  continuance  of  the  business  under  said  existing  agency  contract." 
On  the  6th  of  August,  1887,  the  defendant  declined  to  further  per- 
form the  contract.  This  action  was  then  commenced  to  recover  dam- 
ages, upon  the  ground  that  the  defendant  had  broken  the  contract. 

The  question  is  thus  presented,  whether  the  defendant  had  a  right 
then  to  terminate  the  contract.  The  answer  to  this  depends  upon 
the  construction  of  the  agreements  of  the  parties.  If  they  made  no 
provision  as  to  the  period  during  which  the  agency  should  continue, 
and  if  no  agreement  in  that  respect  can  be  implied  from  the  nature 
of  the  business,  then  either  party  had  the  right  to  terminate  the  con- 
tract at  will.  We  cannot  construe  the  provisions  which  we  have  re- 
cited from  the  written  instruments  as  being  intended  to  express  the 
agreement  that  the  contract  should  continue  in  force  for  a  year  or 
for  any  definite  time.  That  was  not  the  apparent  purpose  of  the  par- 
ties. It  would  rather  seem  from  the  whole  instruments,  in  which 
there  is  no  express  provision  as  to  how  long  the  agency  should  con- 
tinue, that  the  parties  contemplated  no  definite  period.  It  would 
remain  in  force  until  one  or  both  of  the  parties  should  elect  to  ter- 
minate it.  It  might,  of  course,  continue  in  force  for  years.  However 
long  the  parties  might  maintain  these  relations,  it  was  natural,  and 
in  accordance  with  the  habits  of  business  men,  to  have  at  least  yearly 
accountings  and  settlements.  These  provisions,  upon  which  the  plain- 
tiff relies  as  showing  an  agreement  to  continue  the  business  from  year 
to  year,  we  think,  amount  to  no  more  than  agreements  for  yearly  ac- 
countings so  long  as  the  relation  established  by  the  contract  shall  con- 
tinue. They  do  not  import  an  agreement  that  such  relations  shall  con- 
tinue for  any  definite  period.  There  is  nothing  in  the  nature  of  the 
business  to  which  this  contract  relates  which  can  affect  its  construc- 
tion, in  the  particular  under  consideration.  There  is  no  more  appar- 
ent reason  for  construing  the  agreement  as  one  for  a  yearly  agency, 
to  continue  from  year  to  year,  than  there  would  have  been  if  the  busi- 


Ch.  5)    2)    ^^-^'^-''^r^feNATlON   OF   THE'^EfAT^N^  229 

ness  had  been  the  buying  or  selling  of  horses.  The  defendant  having 
the  legal  right  to  terminate  the  contract  at  will,  it  is  unnecessary 
to  consider  whether  the  circumstances  inducing  its  action  would  oth- 
erwise have  justified  it  or  not. 

The  other  questions  presented  in  the  case  are  immaterial,  in  view 
of  the  decision  above  expressed.     Order  affirmed.^" 


GLOVER  v.  HENDERSON. 

(Supreme  Court  of  Missouri,  1S94.     120  Mo.  367,  25  S.  W.  175,  41  Am.   St. 

Rep.  695.) 

Action  for  services  rendered  and  expenses  incurred  ir.  selling  for 
defendant  lots  adjoining  Kansas  City.  A  plat  of  30  acres  was  divided 
into  lots,  which  plaintiff  was  given  the  exclusive  right  to  sell  on  a 
given  commission.  If  he  sold  out  in  one  year  he  was  to  have  a  $1,500 
bonus.  He  was  to  bear  all  expenses  of  advertising  and  selling,  but 
was  to  be  reimbursed  from  the  sales  for  the  expenses  of  laying  out 
the  plat.  He  entered  upon  the  business  with  zeal,  and  in  five  months 
had  sold  4,000  of  the  7,000  front  feet  for  $44,732!  A  difference  then 
arose  between  plaintiff  and  defendant,  which  led  to  the  discharge  of 
plaintiff.  The  jury  allowed  plaintiff'  $4,000  as  the  reasonable  value  of 
his  services  and  the  reasonable  and  necessary  outlay. 

Black,  P.  J.^®  *  *  *  2.  The  first  question  is  whether  this 
action  is  quantum  meruit,  for  services  rendered  and  reasonable  ex- 
penses incurred,  as  claimed  by  the  plaintiff,  or  whether  it  is  an  ac- 
tion for  damages  for  breach  of  contract.  That  the  petition  declares 
upon  quantum  meruit  we  think  there  can  be  no  doubt.  It  is  true  the 
petition  sets  out  the  contract  of  employment,  and  shows  that  services 
were  rendered  and  moneys  expended  in  the  execution  of  it ;  but  it 
proceeds  to  aver  that  defendant  wrongfully  discharged  the  plaintiff, 
and  then  states  the  value  of  the  services  rendered  and  moneys  ex- 
pended, and  prays  judgment  therefor,  less  the  amount  received.  Had 
the  plaintiff  declared  for  the  value  of  his  services,  saying  nothing 
about  the  contract,  and  to  this  the  defendant  had  answered  by  set- 
ting up  the  special  contract  according  to  his  version  of  it,  and  the 
plaintiff  had  replied  by  setting  out  the  contract  according  to  his  the- 
ory of  it,  and  alleged  that  the  defendant  wrongfully  revoked  the 
agency,  because  of  which  he  demanded  the  value  of  his  services  up 
to  the  date  of  his  discharge,  the  issues  would  have  been,  in  substance, 
the  same  that  they  arc  under  the  present  pleadings.  It  is  the  theory 
of  our  Code  that  the  plaintiff  must  state  the  facts  constituting  his 
cause  of  action.     If  he  proposes  to  treat  the  contract  as  rescinded, 

IB  Acrnrd:  Hradlee  v.  Southern  Const  liUinher  Co.,  VS.)  Mass.  .S78,  79  N.  E. 
777  (1(H)7);  lUiodt^s  v.  ForworMl,  1  Apj).  Ca.s.  250,  47  L.  J.  Exch.  .'J90,  34  L.  T. 
Rep.  N.  S.  SJiO,  LM  Wkly.  Ucp.  HITS  (1S70). 

i«  Part  of  the  opinion  is  omitted. 


-•U)  Tin:  KiM.A'i'K^x  (Part  1 

aiul  rooovor  fi">r  (lio  value  oi  srrx  iecs  rcndcrctl,  as  he  iiiav  do  under 
certain  eireunistaiiees.  there  is  no  reason  why  he  \\\a\  iml  set  out  the 
contract,  the  renthtion  of  services  thereunder,  the  wrongful  termina- 
tion of  the  contract  hy  ihi'  defendant,  and  then  declare  for  the  value 
of  the  services  rendered.  Such  is  the  plaintiff's  i)etition  in  this  case, 
ami  it  is  clearly  a  declaration  upon  quantum  meruit,  l^hrlich  v.  In- 
surance Co..  88  Mo.  249. 

2.  The  contract  in  question  was  one  of  agency,  so  that  we  are 
hrought  to  tiie  question  whether  defendant,  having  revoked  the  agency, 
is  liahle  to  the  i)laintift'  for  the  value  of  services  rendered  and  expenses 
incurred  uji  to  the  date  of  revocation.  There  is  and  can  be  no  claim 
made  in  this  case  that  jilaintiff  had  conferred  upon  him  a  ])Ower  cou- 
pletl  with  an  interest.  And,  as  he  had  no  interest  in  the  subject-matter 
of  the  agency,  the  principal  had  the  power,  and,  in  a  qualified  sense, 
the  right,  to  revoke  the  agencv  at  his  will.  State  v.  Walker,  88  Mo. 
279:  Mechem,  Ag.  §  204. 

But  the  question  of  the  liability  of  the  principal  to  the  agent  for 
services  rendered  is  another  and  a  dififerent  thing  from  the  ])ower,  or 
even  right,  to  terminate  the  agency.  Contracts  of  agency  arc  numer- 
ous, and  widely  variant  in  their  objects,  purposes,  and  terms;  so  that 
the  question  of  compensation  of  the  agent,  when  the  agency  has  been 
revoked  by  the  principal,  will  depend  upon  a  variety  of  circumstances. 
It  is  laid  down  by  a  recent  text  writer  that  "the  mere  fact  that  an  agent 
is  employed  to  perform  a  certain  act  will  not,  of  itself,  amount  to  an 
undertaking  on  the  part  of  the  princi])al  that  the  agent  shall  be  per- 
mitted to  complete  the  act  at  all  events,  and  the  principal  may  fairly, 
and  in  good  faith,  revoke  the  agency,  without  liability,  at  any  time 
before  performance."  But  "where  an  agent  is  employed  to  perform  an 
act  which  involves  expenditure  of  labor  and  money  before  it  is  pos- 
sible to  accomplish  the  desired  object,  after  the  agent  has  in  good 
faith  incurred  expense  and  expended  time  and  labor,  but  before  he  has 
had  a  reasonable  opportunity  to  avail  himself  of  the  results  of  this 
jireliminary  effort,  it  could  not  be  permitted  that  the  principal  should 
then  terminate  the  agency,  and  take  advantage  of  the  agent's  services, 
without  rendering  any  compensation  therefor."  Mechem,  Ag.  §  620. 
This  is  good  sense,  and,  we  believe,  good  law. 

But  there  is  still  another  well-settled  and  more  specific  rule,  which 
will  determine  this  branch  of  this  case,  and  that  is  this :  Where  there 
is  an  employment  for  a  definite  period  of  time,  expressed  or  implied, 
and  the  agent  is  discharged  without  cause  before  the  expiration  of  tliat 
period,  the  principal  will  be  liable  to  the  agent,  the  same  as  in  case  of 
breach  of  any  other  contract ;  and  in  such  cases  the  agent  may  elect 
to  treat  the  contract  as  rescinded,  and  bring  an  action  to  recover  the 
value  of  his  services  and  money  expended.  Mechem,  Ag.  §§  614,  621 ; 
Ehrlich  v.  Insurance  Co.,  88  Mo.  249;    Kirk  v.  Ilartman,  63  Pa.  97. 

The  contract  between  the  plaintiff  and  the  defendant,  as  found  by 
the  jury,  contains  no  express  stipulation  to  the  effect  that  the  agency 


Ch.  5}  TERJIIXATIOX    OF    THE    RELATION  231 

should  continue  for  one  year,  but  it  contains  the  stipulation  that  the 
plaintiff  should  have  an  additional  compensation  of  $1,500,  if  he  sold 
the  lots  within  one  year;  and  the  question,  then,  is  whether  there 
arises  an  implied  agreement  that  he  should  have  one  year  in  which 
to  sell  the  lots.  Although  a  contract,  on  its  face  and  by  its  terms,  ap- 
pears to  be  obligatory  on  one  party  only,  yet,  if  it  was  the  manifest 
intention  of  the  parties  that  there  should  be  a  correlative  obligation 
on  the  other  party,  the  law  will  imply  such  obligation.  Lewis  v.  In- 
surance Co.,  61  Mo.  534.  But  as  said  in  Churchward  v.  Queen,  L. 
R.  1  Q.  B.,  at  page  194,  where  a  contract  is  silent  the  court  or  jury 
called  upon  to  infer  an  obligation  on  the  other  side  which  does  not 
appear  in  the  terms  of  the  contract  must  take  great  care  that  they  do 
not  make  the  contract  speak  contrary  to  what  was  the  intention  of 
the  parties.  The  question,  after  all,  is  one  of  intention,  to  be  gathered 
from  the  tenor  and  all  the  terms  of  the  contract,  considered  in  the  light 
of  the  subject-matter  of  which  the  contract  treats. 

The  subject  of  the  agency  in  question  was  one  whole  addition,  con- 
sisting of  280  lots,  and  the  plaintiff  was  to  have  the  exclusive  right 
to  sell  all  of  them.  It  is  plain  to  be  seen  that  the  $1,500  was  an  in- 
ducement to  plaintiff'  to  accept  the  agency.  It  was  a  part,  and  a  con- 
siderable part,  of  the  compensation  which  he  was  to  receive.  It  is 
true  this  part  of  the  consideration  was  conditional,  that  is  to  say,  upon 
the  fact  that  he  sold  the  lots  within  one  year,  but  the  very  condition 
shows  that  he  was  to  have  a  year  in  which  to  perform  it.  His  right 
to  have  a  year  in  which  to  sell  the  lots  is  clearly  implied,  and  this 
implied  part  of  the  agreement  is  as  certain  and  definite  as  if  it  had 
been  stated  in  so  many  words.  This  conclusion  seems  to  us  irresisti- 
ble. Nor  was  it  necessary  to  submit  this  question  to  the  jury,  for  the 
jury  found  that  the  jjlaintiff  was  to  have  an  additional  compensation 
of  $1,500  if  he  sold  out  the  lots  within  one  year.  The  clear  intend- 
ment and  construction  of  this  language  is  tiiat  he  was  to  have  a  year 
in  which  to  sell  out  the  addition. 

But  it  is  said  the  ])laintiff  testified  that  he  rcser\  cd  the  right  to  (|uit 
the  work  at  any  time,  and  hence  the  defendant  had  the  corresponding 
right  to  terminate  the  agency  at  will,  notwithstanding  the  agreement 
concerning  the  $1,500.  The  i)laintiff  testified  that  he  did  not  bind  him- 
self to  sell  the  additi(jn  for  $<S0,000  within  one  year,  or  to  pay  a  for- 
feiture if  he  failed  to  sell  it.  lie  states  at  one  place  in  the  lengthy 
examination  that  he  did  not  bind  himself  to  devote  tlie  entire  year  to 
the  sale  of  Round  Top,  and  t-ouhi  have  quit  at  any  lime,  but  he  was 
not  that  kind  of  a  man.  At  anotlu-r  place  he  says  he  was  bound  to 
give  his  time  and  atlenlir)n  to  the  sale  of  the  land,  and  to  try  to  sell 
it.  He  evidently  undertook  to  make  a  rcasf)nal)le  eft'ort  to  sell  the 
lots.  'I'his  nuicli  is  implied  in  the  terms  of  the  agreement  fnnnd  by 
the  jury  to  have  Ijcen  made  by  these  ])arties.  it  is  c(|ually  true  that 
he  was  not  bound,  at  all  events,  to  continue  his  efforts  during  the  en- 
tire  year.      I'm    it    does  not    follnw   that   the  defendaiU   had   the  right 


'2'^2  TiiK  KKi.ATioN  (Parti 

to  revoke  the  ag;onov.  uiilunit  cause,  at  any  time  during  the  year.  Says 
Meelieni :  "It  is,  in  many  cases,  dillicult  to  determine  whether  the 
parties  have  made  a  defmite  agreement  for  a  fixed  term  or  not.  It  is 
not  indispensable  that  they  should,  in  the  first  instance,  be  both  bound 
for  the  same  period.  It  may  lawfully  be  made  to  rest  in  either  party 
to  determine,  at  his  oj^tion,  that  the  agreement  shall  be  one  for  a  cer- 
tain time."    Mechem,  Ag.  §  211. 

Such  questions  as  this  must  be  considered  in  the  light  of  the  nature 
and  object  of  the  agency,  and  the  agreement  which  the  parties  have 
made.  The  defendant  was  anxious  to  dispose  of  the  addition,  and 
the  scheme  devised  to  sell  it  Avas  problematical  and  doubtful.  The 
defendant  agreed,  as  we  have  seen,  to  give  the  plaintiff  one  year  in 
which  to  earn,  if  he  could,  the  extra  $1,500;  and  this  agreement  as 
to  time  is  not  void  or  unlawful  because  the  plaintiff  had  the  right,  at 
his  option,  to  abandon  the  contract  before  the  expiration  of  the  year. 
The  fact  that  plaintiff  had  such  right  or  option  gave  the  defendant 
no  right  to  terminate  the  agency  before  the  expiration  of  the  year, 
so  long  as  the  plaintiff  was  making  diligent  efforts  to  sell  the  lots. 

3.  As  the  plaintiff  can  maintain  this  action  to  recover  the  value  of 
his  services  and  the  reasonable  expenses  incurred  by  him,  it  follows 
that  he  had  the  right  to  produce  evidence  showing  the  value  of  such 
services.  Evidence  of  what  is  usually  charged  for  similar  services 
at  the  same  place  w^as  admissible.  And  it  was  also  competent  to  show, 
by  persons  who  were  acquainted  with  the  value  of  like  services,  what, 
in  their  opinion,  the  services  of  the  plaintiff  were  worth.  The  wit- 
nesses called  by  the  plaintiff  for  this  purpose  were  real-estate  agents, 
and  their  evidence  shows  that  they  were  fairly  acquainted  with  the 
value  of  like  services.  The  fact  that  commissions  in  like  cases  are  gen- 
erally regulated  by  contract,  and  the  further  fact  that  these  lots  were 
sold  under  what  is  called  a  "unique  and  unusual  plan,"  did  not  af- 
fect the  competency  of  the  evidence  of  these  witnesses  as  to  the  value 
of  the  services  rendered  by  the  plaintiff.  And  it  was  also  competent 
to  show  what  commissions  had  been  paid  in  the  same  locality  for 
selling  other  additions.  The  differences  between  the  plans  adopted 
in  making  such  other  sales  and  the  sales  in  question  would  be  a  mat- 
ter for  the  jury  to  consider,  but  such  differences  do  not  affect  the  com- 
petency of  the  evidence.  There  was  no  error  in  the  admission  of 
evidence  on  this  subject. 

4.  It  follows,  also,  from  what  has  been  said,  that  the  measure  of 
the  plaintift"s  damages  was  the  reasonable  value  of  the  services  ren- 
dered, and  the  moneys  fairly  expended  in  performing  such  services. 
The  instructions  as  to  damages  proceed  on  this  theory,  and  there  is 
no  error  in  them.     *     *    * 

Judgment  alfirmed. 


J<^^ 


Q 


Ch.  5)  TERMINATION   OF    THE    RELATION  233 

STIER  V.  IMPERIAL  LIFE  INS.  CO. 
(Circuit  Court  of  the  United  States,  W.  D.  Missouri,  1893.    58  Fed.  843.) 

Action  by  Geo.  H.  Stier  against  the  Imperial  Life  Insurance  Com- 
pany, of  Detroit,  Michigan,  to  recover  damages  for  breach  of  contract. 
To  the  report  of  a  referee  both  parties  except. 

Philips,  District  Judge. ^'  [After  stating  the  facts:]  It  is  more 
important  than  usual,  in  the  consideration  of  this  case,  to  keep  in  mind 
the  character  of  the  action  and  the  state  of  the  pleadings.  The  action 
throughout  is  predicated  upon  a  contract,  and  proceeds  for  breaches 
thereof.  The  contract  is  set  out  in  substance,  and  it  is  then  averred 
that  the  plaintiff  kept  and  performed  the  same  on  his  part,  and  that  the 
defendant  broke  and  failed  to  keep  the  same.  The  petition  alleges  that 
the  contract  was  to  continue  in  force  until  the  same  was  terminated  by 
the  neglect  or  refusal  on  the  part  of  plaintiff  to  account  for  moneys 
belonging  to  defendant  by  the  terms  and  conditions  of  the  contract,  or 
until  there  was  dishonesty  or  noncompliance  with  the  rules  and  in- 
structions of  said  contract  on  the  part  of  the  plaintiff.     *     *     * 

The  breaches  of  the  contract  assigned  are  that  in  1891  the  defend- 
ant refused  and  ceased  to  issue  any  natural  renewable  term  policies, 
etc.,  and  refused  to  permit  plaintiff  to  solicit  or  take  any  applications 
for  the  policies  mentioned  in  the  contract,  and  made  an  entire  change 
in  the  kind  of  policies  issued,  and  substituted  new  and  different  poli- 
cies therefor,  which  substituted  policies  were  not  so  advantageous  to 
plaintiff  as  those  provided  for;  and  afterwards  made  no  effort  to  col- 
lect the  renewal  premiums  on  policies  issued  under  applications  taken 
by  defendant,  but  used  every  means  to  discourage,  and  did  discourage, 
parties  holding  such  policies  from  paying  renewal  premiums,  thereby 
depriving  plaintiff  of  his  commissions,  etc.  It  is  to  be  observed  that 
it  is  nowhere  averred  that  defendant  discharged  the  plaintiff  from  his 
agency,  nor  is  it  averred  that  the  plaintiff  secured  an  average  of  $20,- 
000  insurance  per  month  for  three  consecutive  months,  as  provided  by 
the  contract. 

The  answer,  after  tendering  the  general  issue,  avers  that  the  plain- 
tiff discontinued  acting  under  said  contract  long  prior  to  the  institu- 
tion of  the  suit,  without  notice  to  defendant,  and  engaged  in  soliciting 
insurance  for  another  insurance  company,  a  rival  in  business  to  the 
defendant.     ♦     *     * 

If  the  plaintiff  discontinued  acting  under  said  contract,  and  engaged 
in  soliciting  insurance  for  another  rival  insurance  company  of  the  de- 
fendant, and  "he  voluntarily  abandoned  the  further  performance  of 
saifl  contract  on  his  part,  and  i)y  nnitual  consent  said  contract  was 
annulled  and  surrendered,"  it  is  not  perceived  that  there  is  any  founda- 
tion for  the  finding  of  the  referee  that  defendant  could  not  terminate 
the  contract  at  its  pleasure.     Nor  am  I  satisfied,  as  a  matter  of  law, 

»T  Part  of  the  upiiiion  Is  nnilttod. 


l\"U  TUK  ui:i,A'rn)N  (Parti 

that  tlcfcmlant  diil  not  liavc  tlio  power  to  terminate  tlio  a,u;encv.  In  the 
absence  of  an  agreement  of  eniplovinent  for  a  definite  period  of  time, 
the  agency  is  one  at  will,  deterniinahle  at  the  plcasnre  of  the  principal, 
imless  the  agency  is  coupled  with  an  interest  in  the  snbject-matter. 
This  is  fnndamental. 

Mecheni  on  Agency  (section  204)  says:  "The  authority  of  the  agent 
to  represent  the  principal  depends  npon  the  will  and  license  of  the  lat- 
ter. It  is  the  act  of  the  principal  which  creates  the  anthority;  *  *  * 
anil  unless  the  agent  has  acquired,  with  the  authority,  an  interest  in 
the  subject-matter,  it  is  in  the  principal's  interest  alone  that  the  authori- 
ty is  to  be  exercised.  *  *  *  It  is  the  general  rule  of  law,  therefore, 
that  as  between  the 'agent  and  his  principal  the  authority  of  the  agent 
may  be  revoked  by  the  principal  at  his  will  at  any  time,  with  or  without 
giving  reason  therefor,  except  in  those  cases  where  the  authority  is 
coupled  with  a  sufficient  interest  in  the  agent ;  and  this  is  true,  even 
though  the  authority  be  in  express  terms  declared  to  be  exclusive  or 
irrevocable.  But,  though  the  principal  has  the  power  thus  to  revoke 
the  authority,  he  may  subject  himself  to  a  claim  for  damages  if  he  ex- 
ercises it  contrary  to  his  express  or  implied  agreement  in  the  matter." 

Chief  Justice  Marshall,  in  Hunt  v.  Rousmanier,  8  Wheat,  203,  5  L. 
Ed.  589,  with  characteristic  aptness  defines  a  power  coupled  with  an 
interest.  He  says :  "What  is  meant  by  the  expression  'a  power  coupled 
with  an  interest'?  Is  it  an  interest  in  the  sulaject  on  which  the  power 
is  to  be  exercised,  or  is  it  an  interest  in  that  which  is  produced  by  the 
exercise  of  the  power?  We  hold  it  to  be  clear  that  the  interest  which 
can  protect  a  power  *  *  *  must  be  an  interest  in  the  thing  itself. 
In  other  words,  the  power  must  be  ingrafted  on  an  estate  in  the  thing. 
The  words  themselves  seem  to  import  this  meaning.  A  power  coupled 
with  an  interest  is  a  power  which  accompanies  or  is  connected  with  an 
interest.  The  power  and  the  interest  are  united  in  the  same  person. 
Rut,  if  we  are  to  understand,  by  the  word  'interest,'  an  interest  in  that 
which  is  to  be  produced  by  the  exercise  of  the  power,  then  they  are 
never  united." 

Clearly,  therefore,  the  plaintiff  had  no  such  interest  in  the  subject- 
matter  of  the  contract  as  would  take  away  the  customary  option  of  the 
principal  to  terminate  the  agency.  But  it  is  claimed  by  the  plaintiff,  on 
account  of  article  18  of  the  contract  in  question,  that  the  implication 
was  that  the  power  of  dismissal  is  denied,  except  for  the  causes  therein 
specified.  This  article  is  as  follows  :  "This  contract  may  be  terminated 
upon  the  neglect  or  refusal  of  the  said  George  H.  Stier  to  account  for 
all  moneys  belonging  to  the  company  according  to  rule  7,  or  for  dis- 
honesty, or  for  noncompliance  with  any  of  the  foregoing  rules  and 
instructions." 

The  case  of  Xewcomb  against  this  same  company  (51  Fed.  725)  is 
relied  upon  in  support  of  this  construction.  I  should  feel  great  em- 
barrassment to  oppose  my  unsupported  opinion  against  any  considerate 
conclusion  reached  by  the  learned  judge  who  delivered  that  opinion. 


Ch.  5)  TERMINATION    OF    THE    RELATION  2;>5 

It  is  to  be  kept  in  mind,  to  a  proper  understanding  of  the  Xewcomb 
Case,  that  the  action  there  was  for  a  quantum  meruit,  and  that  the 
facts  alleged  were  in  many  respects  quite  ditTerent  from  these  under 
consideration,  and  the  questions  passed  upon  arose  upon  demurrer  to 
the  petition. 

I  am  unable  to  perceive  that  the  provision  that  the  contract  might  be 
terminated  upon  certain  specified  grounds  enforces  the  conclusion  that 
it  was  intended  thereby  to  prolong  the  existence  of  the  agency  in- 
definitely, or  so  long  as  the  agent  did  none  of  the  specified  delicts.  A 
not  dissimilar  question  arose  in  Sewing  Machine  Co.  v.  Ewing,  141 
U.  S.  627.  12  Sup.  Ct.  94,  35  L.  Ed.  882.  where  it  was  held  that  an 
agency  contract  containing  the  provision  that  a  "violation  of  the  spirit 
of  this  agreement  shall  be  sufficient  cause  for  its  abrogation"  does  not 
imply  that  it  could  only  be  abrogated  for  sufficient  cause.  "Sir.  Justice 
Harlan  said  of  this  (page  636,  141  U.  S.,  and  page  97,  12  Sup.  Ct.) : 
"This  clause,  it  may  be  suggested,  was  entirely  unnecessary  if  the 
parties  retained  the  right  to  abrogate  the  contract  after  1875  at  pleas- 
ure, and  implies  that  it  could  be  abrogated  only  for  sufficient  cause,  of 
which,  in  case  of  suit,  the  jury,  under  the  guidance  of  the  court  as  to 
the  law,  must  judge,  in  the  light  of  all  the  circumstances.  We  cannot 
concur  in  this  view.  The  clause  referred  to  is  not  equivalent  to  a 
specific  provision  declaring  affirmatively  that  the  contract  should  con- 
tinue in  force  for  a  given  number  of  years,  or  without  a  limit  as  to 
time,  unless  abrogated  by  one  or  the  other  party  for  sufficient  cause.  It 
was  inserted  by  way  of  caution,  to  indicate  that  the  parties  were  bound 
to  observe  equally  the  spirit  and  letter  of  the  agreement  while  it  was 
in  force." 

It  seems  to  me  that  the  proper  meaning  of  article  18  is  that,  for  any 
of  the  designated  derelicts,  the  right  arose  absolutely  to  the  principal 
to  terminate  the  contract  without  any  liability,  leaving  the  right  un- 
touched to  exercise  the  power  of  discontinuance  subject  to  a  liability 
under  a  quantum  meruit  action.  The  general  rule  of  law  is  that  such 
contracts  are  revocable  at  pleasure  "unless  the  power  to  revoke  is 
restrained  by  express  sti])ulation."  Mechem,  Ag.  §§  209,  210.  This 
rule  is  aptly  put  in  Coffin  v.  Landis.  46  Pa.  431.  432.  The  court  say: 
"The  true  f|uestion  is,  what  was  the  contract?  To  what  did  the  parties 
bind  each  other?  We  are  not  at  liberty  to  make  contracts  for  them,  or  to 
add  any  stipulation  which  they  have  not  seen  fit  to  incorporate.  We 
cannot  give  a  mere  expectation  the  sanction  or  binding  force  of  a  cov- 
enant. *  *  *  'iMicre  is  nothing  said  in  regard  to  the  time  during 
which  the  agreement  should  continue,  and  nothing  in  its  language  to 
define  the  duration  of  the  service  of  plaintiff  or  his  employment  by  the 
defendant.  This  the  contracting  i)artics  appear  to  have  left  out  of 
consideration,  or  at  least  failed  to  make  it  a  subject  of  covenant  ob- 
ligation. It  may  be  that  neither  was  willing  to  bind  himself  for  any 
definite  period.  *  *  *  It  is  evident,  then,  that  were  we  so  to  c<>n- 
<;true  the  agreement  as  to  hold  it  obligatory  u|)on  the  one  party  to  em- 


-•■>G  THE  iJKLATKiN  (Part  1 

ploy,  and  upon  the  other  to  serve,  (hiring  any  period,  we  should  he  in 
ilaiigor  of  inii)osing  liabililics  which  holh  parties  absolutely  avoided 
assuming.  And,  if  it  be  admitted  that  neither  of  the  parties  contem- 
plated a  severance  of  the  relation  atiirmed  by  the  contract  at  the  will 
of  the  other  party,  it  does  not  follow  that  we  are  at  liberty  to  treat  the 
agreement  as  continuing  a  covenant  against  him.  That  would  be  to 
make  an  expectation  of  results  eijuivalent  to  a  binding  acknowledg- 
ment that  they  should  follow." 

The  case  of  Insurance  Co.  v.  Williams,  91  N.  C.  69,  49  Am.  St.  Rep. 
637,  pertinently  illustrates  the  application  of  this  rule,  Williams  was 
appointed  agent  to  solicit  insurance.  On  first-year  payments  he  was 
to  receive  a  given  per  cent.,  and  on  renewals  a  given  per  cent.  The 
agent  prosecuted  his  agency  to  a  considerable  extent,  when  the  com- 
pany, unable  to  successfully  conduct  its  business,  sold  out  and  assigned 
many  policies  to  another  insurance  company,  and  renewals  were  effect- 
ed, through  another  agency,  on  some  of  the  policies  taken  by  Wil- 
liams. For  these  renewals  he  sought  to  recover  compensation.  Al- 
though it  might  have  been  there,  as  in  the  case  here,  that  the  agent  was 
induced  to  accept  the  agency  in  reliance  on  the  expectancy  of  profits 
from  the  renewals,  the  court  held  that  the  company,  in  the  absence  of 
any  express  provision  to  the  contrary  in  the  contract,  had  the  right  to 
terminate  the  contract  in  the  manner  it  did ;  that  the  agent  had  no  such 
interest  associated  with  the  business  as  entitled  him  to  a  continuance  of 
the  agreement  against  the  will  of  the  principal.  "The  right  to  com- 
pensation is  associated  with  a  continuance  of  services,  and  the  com- 
pensation is  the  agreed  measure  of  their  value.  *  *  *  Although 
renewals  are  the  consequence  of  the  original  contract  of  insurance,  and 
in  this  particular  beneficial  to  the  company,  yet  the  full  compensation 
given  and  accepted  for  this  service  is  the  twenty-five  per  centum  on 
the  sum  received,  provided  in  the  contract  which  creates  the  agency  and 
regulates  its  terms." 

^^'hile  the  contract  here  provides  that  the  agent  may  be  entitled  to 
commission  on  renewal  premiums,  notwithstanding  the  termination  of 
the  agency  for  any  cause  save  dishonesty,  yet  it  is  on  the  express  con- 
dition that  the  agent  has  secured  $1,000,000  of  policies  in  force;  but 
there  is  no  claim  made  that  he  had  secured  this  amount.  The  prin- 
cipal difference  between  the  case  supra  and  this  is  that  Williams  sought 
to  recover  his  commission  on  cases  actually  renewed,  but  by  another 
agent,  while  this  plaintiff  seeks  to  recover  damages  on  the  theory  that 
his  interest  would  have  been  equal  to  $1,200  a  year  for  three  years, 
had  the  company  diligently  striven  to  effect  such  renewals.  It  is  a 
difference,  it  seems  to  me,  without  a  legal  distinction. 

There  must  be,  in  the  absence  of  a  clear  provision  to  the  contrary, 
the  element  of  mutuality  in  such  a  contract.  If,  as  against  the  prin- 
cipal, the  agent  had  the  right  to  insist  on  a  continuation  of  the  agency 
so  long  as  he  did  none  of  the  prescribed  acts  in  article  18,  the  correla- 
tive right  of  the  principal  must  obtain  to  hold  the  agent  to  perpetual 


Ch.  5)  TERMINATION    OF    THE    RELATION  237 

service,  or  so  long  as  he  was  faithful ;  and  tlnus  it  would  result  that. 
nolens  volens,  the  employment  could  be  made  perpetual.  It  is  quite 
evident  from  the  second  paragraph  of  the  opinion  in  the  Newcomb 
Case,  supra,  that  the  learned  judge  had  in  mind  the  recognized  dis- 
tinction between  the  reserved  power  to  discharge  and  the  right  and 
wrong  of  a  discharge,  where  the  remedy  is  not  in  an  action  ex  con- 
tractu for  the  discharge,  but  a  quantum  meruit  action  predicated  upon 
its  injurious  exercise.  In  the  latter  instance  the  suit  is  not  founded  on 
the  breach  of  the  contract,  as  such,  but  is  an  action  of  assumpsit  for 
a  quantum  meruit,  in  which  the  contract  may  be  put  in  evidence,  and 
will  control  the  maximum  of  recovery.  Mansur  v.  Botts,  80  Mo.  654, 
655,  and  citations.  Keeping  this  distinction  in  view,  the  vice  is  appar- 
ent in  the  finding  of  the  referee  that  the  defendant  broke  its  contract 
with  the  plaintiff  in  not  permitting  him  to  continue  the  prosecution  of 
his  work  in  taking  insurance  on  the  natural  premium  plan,  or  in  dis- 
couraging the  prosecution  of  that  system  by  its  determination  to 
specially  prosecute  the  level  premium  policies.  *  *  * 
The  motion  for  a  new  trial  is  denied. 


ATKIN  V.  ACTON. 

(Court  of  King's  Bench,  1830.     4  Car.  &  P.  208,  19  E.  C.  L.  478.) 

A  clerk  and  traveller,  hired  by  the  year,  attempted  to  take  improper 
liberties  with  his  employer's  housemaid.  The  employer  discharged 
him.  and  said  he  would  pay  him  the  wages  already  earned.  Plaintiff' 
refused  this,  and  sues  in  assumpsit  for  £130  wages  under  the  contract 
of  hiring.     Plea:   General  issue,  a  set-off,  and  a  tender  of  £14. 

Lord  Tenterden,  C.  J.  Assuming  that  the  effect  of  the  agree- 
ment is  that  it  creates  a  hiring  for  a  year,  yet.  if  the  plaintiff  miscon- 
ducted himself  ^"^  in  the  way  descril^ed,  the  defendant  had  a  right  to 
discharge  him,  and  was  not  compellable,  according  to  my  judgment,  to 
pay  him  any  money  at  all ;  at  all  events,  he  was  not  liable  to  pay  him 
any  more  than  for  the  time  during  which  he  actually  served,  which  will 

i«  Drunkennes.s  on  the  part  of  the  apent  may  bo  a  .suflicient  cause  for  dis- 
chartre  of  the  atrent  If  It  does  or  mlf;ht  have  an  injurious  olToct  on  tlie  luisinoss 
of  the  principal.  thouL'h  not  otherwise.  iM-innan,  ('.  J.,  in  Wise  v.  Wilson, 
Carr  &  Kirwyn,  CC-j.  17  E.  C.  I>.  tJOlJ  (l.s4ri);  (Jonsojis  v.  Ccarliart,  .''.1  .Mo.  r>s."j 
(ISOl).  l)lMrr!i<('ful  conduct  of  an  a;;('nt  in  associating.'  with  a  woman  of  ill 
repute,  which  would  naturally  rctlect  discredit  on  the  iirincipal,  ;ind  lie  in- 
jiirious  to  his  business  iiUcrest,  constilulcs  ample  \^^^i•,\\  ^iround  for  the  dls- 
char;;e  of  the  a^'t-iit.  (iould  v.  Maunolia  .M«'tal  Co.,  207  111.  172,  ()'.)  N.  K.  .S'.Mj 
(1(W)4}.  afflrndnj.'  lOS  111.  App.  20.''.  (1I»0:;). 

Disolicdicnre  of  insfrurtions  Is  ground  for  discharge.  I)nd;:e  v.  Kevnolds, 
1.3.^.  Mich.  (;02,  OS  N.  W.  7:J7  (1004).  And  so  Is  i-nujiKlni;  In  a  rival  business  by 
the  .'iKt'nt,  even  thouKh  it  does  not  cause  his  prlneiiml  any  injury.  Kierin^'er 
V.  Meyer.  12  Wis.  .",11.  24  .\ni.  Uep.  41."  (IS77i.  See,  iilso.  Singer  v.  .McCor- 
mlek,  4  Watts  &  S.  20.')  (1S42),  In  which  an  a^rr-nt  of  a  partnershlii  at  the  direc- 
tion of  one  iiartner  changed  the  hooks  to  the  delrimcut  of  the  oilier.  The 
court  found  this  ju.stifled  his  discharge. 


2;>S  TiiK  KKi.ATioN  (Parti 

briiii^:  it  round  to  llie  dcniaiul  on  the  counts  for  work  and  labour. 
With  respoct  [o  the  temler.  it  appears  to  tne  that  it  has  been  proved. 
The  phiintitV  ret'nsed  to  take  the  money  olVered.  and  as  the  sum  was 
mentioned,  and  he  would  not  acceju  it.  1  think  it  is  quite  suffieient,  be- 
cause his  objection  was  not,  that  the  sum  put  before  him  was  not  the 
precise  amount  oiTered,  but  his  answer  shows  that  he  was  not  willing 
to  take  the  uumicv  at  all.  It  therefore  was  not  necessary  for  the  de- 
femlant  to  get  the  sovereign  changed  so  as  to  olTer  the  precise  sum. 
\'erdict  for  the  defendant. 


a 


(B)  Specific  Pcrfonnancc  of  the  Agency 
,MAIR  V.  HIMALAYA  TEA  CO. 

(Court  of  Cliancery,  1805.     L.  K.  1  Eq.  411,  11  Jur.  N.  S.  1013,  14  W.  R.  165.) 

Mair  &  Co.  had  for  many  years  been  in  business  in  London  and  Cal- 
cutta, and  organized  the  Himalaya  Tea  Company  for  the  cultivation 
of  tea.  A  prospectus  was  issued  stating  the  object  of  the  company 
and  the  appointment  of  Mair  &  Co.  as  agents.  The  latter  took  a  large 
number  of  shares.  The  directors,  three  years  later,  induced  Mair  & 
Co.  to  resign  as  agents  upon  assurance  of  relief  of  all  payments  on 
account  of  the  shares  subscribed.  They  then  appointed  new  agents,  but 
sued  Mair  for  the  amount  due  on  his  shares  and  interest.  He  files  his 
bill  for  relief  by  way  of  an  accounting,  and  by  injunction  to  restrain 
them  from  acting  upon  his  resignation,  or  alternatively  from  suing  for 
payment  upon  the  shares  accepted  by  him. 

Sir  W.  Page  Wooi>,  V.  C.  I  cannot  see  my  way  to  granting  the 
I)laintifif  the  relief  asked,  the  whole  matter  being  one  for  a  court  of 
law  to  deal  with,  so  long  as  care  is  taken  that  the  plaintiff  shall  not 
be  prejudiced  in  the  proceedings  at  law  by  his  voluntary  resignation. 
The  contract  between  the  plaintiff  and  the  company  must  be  regulated 
by  the  articles  of  association  only,  on  the  faith  of  which  other  persons 
have  incurred  their  liability,  and  the  Court  cannot  enter  into  any 
arrangements  antecedent  to  the  articles.  Even  assuming,  in  favour  of 
the  plaintiff,  the  construction  given  by  him  to  the  articles  that  he  was 
to  be  irremovable,  except  by  the  authority  of  a  general  meeting,  or  that 
his  acceptance  of  shares  was  conditional  on  his  being  retained  as 
agent,  the  Court  cannot  act  in  his  favour,  as  the  duties  of  an  agent  are 
in  the  nature  of  personal  service,  and  as  such  incapable  of  being  en- 
forced in  equity.^"    Johnson  v.  The  Shrewsbury  &  Birmingham  Rail- 

10  An  aj,'<'nt  should  lt(?  not  merely  tru.sted.  hut  personally  acceptahle  to  a 
princii'al.  and  the  courts  will  not  force  ujion  the  princiital  an  ohjectionahle 
a^renl  no  matter  how  a  hie  he  may  he.  Pickeriii.;,'  v.  P.ishop  of  lOly,  '2  Y.  &  Coll. 
C.  C.  249,  12  L.  J.  Ch.  271,  7  Jur.  47!)  (184.'}).  When  the  principal  is  a  jiartner- 
ship  the  afe'ent  should  he  acceptahle  to  hoth  partners.  Singer  v.  McCormick, 
4  Watts  &  S.  205  (IS  12).  Nor  will  agency  he  specifically  enforced,  for  that 
would  be  to  assert  that  the  principal  may  not  revoke  the  authority  of  the 


Ch.  5)  TERMIXATIOX    OF    THE    RELATION  239 

way  Company,  3  D.  ]\I.  &  G.  914,  etc.  The  plaintiff  will  have  his  cross 
action  in  respect  of  the  contract ;  and  as  he  cannot  he  relieved  by  this 
Court,  there  will  be  no  order  upon  the  present  motion.  As,  however, 
the  plaintiff  has  some  reason  for  saying  that  his  resignation  was  given 
under  the  impression  that  he  would  be  thereupon  relieved  from  all 
liability,  the  defendants  must  undertake  not  to  set  up  in  any  proceed- 
ings at  law  the  alleged  resignation  of  the  plaintiff. 


(F)  Rccorrry  of  Damages  by  the  Agent 

JACOBS  V.  WARFIELD. 
(Supreme  Court  of  Louisiana,  1871.    23  La.  Ann.  ?>95.) 

Wyly,  J.  The  defendant  has  appealed  from  the  judgment  con- 
demning her  to  pay  the  plaintiff  $2610  for  violating  the  contract  which 
she  made  with  him  on  the  sixth  day  of  October,  1865,  and  for  money 
advanced  by  him  for  her  benefit  under  said  contract. 

In  this  contract  the  plaintiff  was  employed  as  an  agent  to  super- 
intend all  the  business  of  the  defendant  in  the  parish  of  St.  John  the 
baptist,  in  relation  to  certain  wild  lands  which  the  defendant  owned  in 
said  parish ;  and  he  was  specially  authorized  to  take  charge  of  and  ex- 
ercise general  control  over  said  property ;  to  prevent  the  commission  of 
trespass  or  wastes  upon  said  lands,  and  to  appear  in  court  to  prosecute 
and  defend  all  suits  in  reference  thereto,  as  occasion  might  require 
"with  the  distinct  understanding  that  no  other  charge  shall  be  made  bv 
the  said  Jacobs  for  his  services  in  taking  charge  of  the  said  lands  and 
removing  therefrom  all  trespassers,  than  one-fourth  interest  in  the  rev- 
enue derived  from  the  sale  of  wood  and  timber  cut  therefrom  by  said 
Jacobs  and  his  employes,  as  herein  expressed,  which  shall  be  a  full 
and  ade(|uate  remuneration  and  com|)cnsation  for  all  services  that  he, 
said  Jacobs,  may  render  the  said  Mrs.  W'arfield  under  and  by  virtue 
of  this  procuration." 

It  was  further  £iii)ulatcd  that  the  .said  agent  was  not  to  institute  pro- 
ceedings against  any  trespasser  without  first  ojjtaining  the  written  con- 
sent of  the  defendant ;  and.  also,  that  the  said  Jacobs  was  in  no  wise  to 
disturb  or  interfere  with  such  persons  as  might  have  the  written  sanc- 
tion of  Mrs.  Warfield  to  be  on  said  lands  and  cut  and  sell  limber  there- 
from. 

There  was  no  pcri(jd  fixed  in  the  act  as  the  term  for  which  the  said 
Jacobs  was  emplcjyed.     I'nder  this  contract  wc  think  the  defendant  had 

anient.  Klwcll  v.  Crxtn  (\.  .7.  Cli.)  M\  Atl.  .".so  (HKH)).  Morcnvcr  to  s|iccilic;ill.v 
ciifdrcf  the  fontnut  ajiaiii.^t  llii'  ininripMl  wunld  lie  Inciiuiliililc.  liccjiiisc  l:i(U- 
ini:  innttiallty.  Tlic  Courts  eann<it  coiniirl  i«>rr<inii!iiic»>  liy  tlu'  ii^'ciit.  and  llicrc 
fnn-  will  not  decree  Hpecitte  perCnniiance  liy  the  jtrinclpal.  This  remedy  is 
jivjiilalile  (inly  when  the  ennrt  ''iin  ciil'drr-e  flic  cdntraef  im  Imth  sides,  s.i 
tliiit  the  whiile  airreenient  can  he  rairied  intn  efrecf  necoi'dinj;  to  its  ternis. 
-Mwcirth  V.  .Sevniunr.    IL'  .Minn.  '.L'f!,  44  N.   W.  lO.'IO  (IS'.d)). 


240  Tin:  iMM-ATum  (Parti 

the  right  to  discharge  her  agent  aiul  employe  whenever  she  saw  fit  to 
do  so. 

From  the  evidence  we  are  satisfied  that  the  plaintiff  cHd  not  comply 
with  his  contract,  and  the  defendant  had  good  cause  to  discharge  him. 
His  ilemand  for  damages  for  breach  of  contract  must,  therefore,  fail. 
It  appears,  however,  that  the  plaintiiT  paid  ten  dollars  to  an  attorney 
and  twenty-five  dollars  costs  in  a  suit  for  the  benefit  of  the  defendant, 
and  we  think  he  was  justifiable  in  doing  so  under  the  act  of  procura- 
tion. For  these  sums  he  should  have  judgment.^"  The  demand  for 
the  other  sums  which  the  plaintiiT  claims  to  have  paid  for  the  defend- 
ant pursuant  to  the  contract  is  not  supported  by  the  evidence. 

It  is  therefore  ordered  that  the  judgment  herein  be  reduced  to 
thirty-five  dollars,  and  as  thus  amended  that  it  be  affirmed.  It  is  fur- 
ther ordered  that  the  plaintiff  pay  costs  of  this  appeal.  Rehearing 
refused. 


BLUMENTHAL  v.  GOODALU 
(Supreme  Court  of  California,  1891.     89  Cal.  251,  26  Fac.  906.) 

Action  to  recover  commissions  claimed  to  have  been  earned  by  one 
Oesterreicher,  a  real  estate  agent,  under  authority  from  defendant 
to  sell  certain  blocks  for  $1,500  each,  on  which  he  was  to  have  a  com- 
mission of  $100  for  each  block,  "This  contract  to  be  in  force  for  ten 
days  from  date  hereof."  On  the  same  day  the  agent  agreed  orally 
with  one  Fulder  for  the  sale  of  the  blocks  at  the  price  named,  but, 
he  failing  to  put  the  agreement  in  writing,  the  agent  afterward  made 
a  written  agreement  with  Von  Rhein  &  Co.  Next  day  defendant  re- 
voked the  authority,  claiming  it  had  been  procured  by  misstatements 
by  the  agent.  The  court  found  there  had  been  no  fraud  or  misrep- 
resentations by  the  agent.  The  latter  assigned  his  claim  to  plaintiff. 
Judgment  for  defendant.  Motion  for  new  trial  denied.  Plaintiff 
appeals  from  the  judgment  and  order. 

Garoutte,  J.^^  [After  stating  the  facts:]  *  *  *  It  is  a  gen- 
eral principle  of  law  that,  as  between  the  principal  and  the  agent, 
the  authority  of  the  agent  is  revocable  at  any  time,  if  not  coupled  with 
an  interest,  and  this  principle  is  recognized  by  section  2356  of  the 
Civil  Code.  Mechem,  upon  the  Law  of  Agency  (section  209),  says : 
"But  this  power  to  revoke  is  not  to  be  confounded  with  the  right  to 

2  0  If  the  agent  has  in  good  faith  incurred  expenses,  and  expended  time  and 
labor  in  the  matter,  or  agency,  the  principal  will  not  be  permitted  to  terminate 
it  and  appropriate  the  results  of  the  agent's  services  without  compensating 
him  therefor.  Royal  Kemedy  and  Extract  Co.  v.  (iregory  Grocery  Co.,  00  Mo. 
App.  .>J  (1901) ;  Green  v.  Cole,  lO.'i  Mo.  70,  15  S.  W.  317  (1S90) ;  S.  C,  24  S. 
W.  10.")8  Q894).  But  if  his  compensation  depends  upon  success,  and  the  agency 
has  been  rightfully  and  in  good  faith  revoked  before  he  fulfills  the  agreement, 
he  has  no  right  to  compensation.  Milligan  v.  Owen,  123  Iowa,  285,  98  N.  W. 
792  (1904). 

21  Part  of  the  opinion  is  omitted. 


Ch.  5)  TERMINATION    OF    THE    RELATION  241 

revoke.  Much  uncertainty  has  crept  into  the  books  and  decisions  from 
a  failure  to  discriminate  clearly  between  them.  *  *  *  As  has 
been  seen,  the  relation  of  the  agent  to  his  principal  is  founded  in  a 
greater  or  less  degree  upon  trust  and  confidence.  It  is  essentially  a 
personal  relation.  If,  then,  for  any  reason,  the  principal  determines 
that  he  no  longer  desires  or  is  able  to  trust  and  confide  in  the  agent. 
it  is  contrary  to  the  policy  of  the  law  to  undertake  to  compel  him 
to  do  so.  *  *  *  But  it  by  no  means  follows  that,  though  possess- 
ing the  power,  the  principal  has  the  right  to  exercise  it  without  lia- 
bility, regardless  of  his  contracts  in  the  matter.^-  It  is  entirely  con- 
sistent with  the  existence  of  the  power  that  the  principal  may  agree 
that  for  a  definite  period  he  will  not  exercise  it,  and  for  the  violation 
of  such  an  agreement  the  principal  is  as  much  liable  as  for  the  breach 
of  any  other  contract."  In  section  615  the  author  says :  "In  using  the 
expressions  rightfully  and  wrongfully  revoked,  it  will  be  understood 
that  the  question  of  the  principal's  power  to  revoke  is  not  involved, 
but  whether  by  express  or  implied  agreement,  having  undertaken  not 
to  exercise  that  power,  he  has,  nevertheless,  exercised  it  in  violation  of 
the  agreement."  Section  620  reads ;  "  *  *  *  Thus  if,  after  a  bro- 
ker employed  to  sell  property  had  in  good  faith  expended  money  and 
labor  in  advertising  for  and  finding  a  purchaser,  and  was  in  the  midst 
of  negotiations  which  were  evidently  and  plainly  approaching  to  suc- 
cess, the  seller  should  revoke  the  authority  with  the  purpose  of  avail- 
ing himself  of  the  broker's  efforts,  and  avoiding  the  payment  of  his 
commissions,  it  could  not  be  claimed  that  the  agent  had  no  remedy. 
In  these  cases  it  might  well  be  said  that  there  was  an  implied  contract 
on  the  part  of  the  principal  to  allow  the  agent  a  reasonable  time  for 
performance,  that  full  performance  was  wrongfully  prevented  by  the 
principal's  own  acts,  and  that  the  agent  had  earned  his  commission." 
In  the  case  of  Lane  v.  Albright,  49  Ind.  279,  where  the  owner  of 
the  real  estate  sold  it  pending  the  negotiations  of  the  agent  in  making 
a  sale,  and  prior  to  the  expiration  of  the  time  given  by  the  owner  to 
the  agent,  and  where  the  agent  within  the  time  given  did  find  a  pur- 
chaser, the  court  says :  "The  appellant  performed  all  that  he  was  re- 
quired by  the  contract  to  do,  and  was  prevented  by  the  appellee  from 
selling  the  land.  The  appellee  disabled  himself  from  carrying  out 
the  contract  of  sale  made  by  the  appellant."  "The  fact  that  the  ap- 
pellee had  authorized  appellant  to  sell  his  land  did  not  deprive  him- 
self of  the  power  of  selling  it,  but  he  could  not  thereby  avoid  his  lia- 
bility to  appellant."  In  Hawley  v.  Smith,  45  Ind.  183,  upon  full  con- 
sideration tlic  court  decided  that  the  rule  is  that,  where  the  perform- 
ance by  one  party  is  prevented  by  the  act  of  the  other,  the  party  not 
in  fault  should  recover  in  damages  such  sum  as  will  fully  compensate 

22  Tlio   (listliK'tioti  liotwccii   the  power  niid   tho   richt  to  rovoko  Is  emi'liii- 
sl'/.rd   in    Kili.itrick   v.   Wilov.   litT    Mo.   12:5.  OH   S.   W.  'J1.3    (inOfi);    Sinsor   v. 
McforiiiicU.    t   Wjitts  &  S.  IJC.')  (1HV2). 
(;onr).rfi.&  .\.— 10 


-42  TiiK  Ki:i..\ri(>N  (Parti 

him  for  tlie  injury  which  ho  has  suslaiiu'd  hy  reason  of  the  non-per- 
formance of  the  contract.      To  the  same  clYect   is  Story,  Ag.  §  466. 

In  the  case  at  bar  it  may  be  conccdecl  that  the  aj^ent  had  not  en- 
tirely carried  out  his  contract  at  the  time  the  defencUmt  revoked  his 
autliority,  but  upon  tlie  19th  (hiy  of  July,  and  within  the  limit  of  time 
fixed  by  the  contract,  he  did  produce  the  purchaser,  with  his  money 
in  his  hand,  deiuanding  a  deed.  The  court  found  that  the  plaintiff 
entered  into  this  contract  in  good  faith,  and  that  the  writing  was  un- 
tainted with  fraud.  The  record  discloses  that  the  agent  was  most 
active  in  his  efforts  to  find  a  purchaser;  indeed,  the  real  reasons  of 
defendant's  revocation  of  the  agency  appear  to  be  that  the  agent  was 
too  active,  as  he  had  found  two  purchasers  for  the  property  instead 
of  one.  The  case  of  Brow^n  v.  Pforr,  38  Cal.  553,  would  seem  to 
indicate  upon  a  cursory  examination,  views  hostile  to  the  principles 
expressed  in  the  authorities  cited  in  this  opinion,  but,  upon  examina- 
tion of  that  case,  it  can  readily  be  seen  that  no  hostility  exists.  The 
contract  in  that  case  does  not  expressly  stipulate  that  it  shall  remain 
in  force  30  days,  and  the  opinion  of  Justice  Sanderson  clearly  inti- 
mates that,  if  there  had  been  a  provision  in  the  contract  that  it  should 
remain  in  force  for  such  length  of  time,  the  defendant  would  not  have 
been  permitted  to  prevent  performance,  and  escape  without  making 
compensation  to  the  agent. 

The  remaining  cases  cited  by  respondent  upon  this  question  add  no 
merit  to  his  contention.  The  defendant  expressly  agreed  that  his  con- 
tract with  the  agent  should  remain  in  force  for  the  period  of  10  days. 
The  act  of  the  agent  in  finding  a  purchaser  required  time  and  labor 
for  its  completion,  and  within  three  days  of  the  execution  of  the  con- 
tract, and  prior  to  its  revocation,  he  had  placed  the  matter  in  the  posi- 
tion that  success  was  practically  certain  and  immediate,  and  it  would 
be  the  height  of  injustice  to  permit  the  principal  then  to  withdraw  the 
authority  and  terminate  the  agency  as  against  an  express  provision  of 
the  contract,  and  perchance  reap  the  benefit  of  the  agent's  labors, 
without  being  liable  to  him  for  his  commissions.  This  would  be  to 
make  the  contract  an  unconscionable  one,  and  would  offer  a  premium 
for  fraud  by  enabling  one  of  the  parties  to  take  advantage  of  his  own 
wrong,  and  secure  the  labor  of  the  other  without  remuneration. 

Let  the  judgment  and  order  be  reversed,  and  the  cause  remanded, 
with  direction  to  the  court  below  to  enter  judgment  for  the  plaintiff 
as  prayed  for. 


Ch.  5)  TERMINATION  OF  THE  RELATION  243 


J^iUu^ 


(G)  Manner  of  Revocation 
CLARK  V.  MULLENIX. 

(Supreme  Court  of  .Judicature  of  Indiana,  ISoS.     11  Tnd.   532.) 

WoRDEN,  J.^^  Bill  in  chancery,  filed  under  the  old  practice,  by  the 
appellee  against  the  appellant,  for  the  specific  performance  of  a  con- 
tract for  the  sale  of  land.  The  cause  was  tried  since  the  code  took 
effect,  but  there  was  a  motion  for  a  new  trial,  on  the  finding  of  the 
Court  for  the  plaintiff  below,  which  was  overruled,  and  exception 
taken,  the  bill  of  exceptions  setting  out  the  evidence. 

The  bill  avers  that  in  May,  1848,  the  plaintiff'  purchased  of  the 
defendant,  Nancy  Clark,  a  certain  piece  of  land  therein  described  for 
the  sum  of  $400,  to  be  paid  in  four  equal  payments,  on  the  25th  of 
December,  of  the  years  1848,  1849,  1850,  and  1851,  with  interest  from 
the  1st  of  May,  1848;  that  he  executed  to  the  defendant  four  notes 
for  the  purchase-money,  as  above  specified,  and  was  put,  by  her,  in 
possession  of  the  land,  and  has  made  valuable  and  lasting  improve- 
ments thereon ;  that  he  has  paid  to  the  defendant  the  purchase-money, 
and  demanded  a  deed,  which  she  refuses  to  execute. 

The  facts  charged  in  the  bill  are  denied  under  oath. 

The  Court,  on  its  finding,  decreed  specific  performance. 

It  appears  from  the  evidence  that  the  defendant,  who  resided  in 
Kentucky,  by  her  letters  to  one  John  Allee,  of  Indiana,  authorized  him 
to  sell  the  land  in  controversy;  and  that  in  pursuance  of  such  au- 
thority, said  Allee,  as  agent  of  the  defendant,  sold  the  land  to  the 
plaintiff,  and  put  him  in  possession  thereof,  and  also  took  from  the 
plaintiff  the  notes  above  specified  for  the  purchase-money,  which  notes 
were  retained  in  the  possession  of  Allee  until  they  were  paid  to  him 
by  the  plaintiff,  and  taken  up.  Soon  after  the  land  was  sold,  Allee 
received  letters  from  the  defendant  ratifying  and  confirming  the  sale. 
This  was  in  1848. 

Afterwards,  the  defendant  became  dissatisfied  witii  the  sale  thus 
made,  on  the  alleged  ground  that  it  had  been  sold  for  less  than  its 
value,  and  sought  to  repudiate  it.  On  the  24th  of  September,  1850, 
she  executed  U)  Henry  i\.  Clark,  a  power  of  attorney,  whereby  she 
authorized  and  empowered  him  to  sell  and  convey  the  land  in  con- 
troversy, and  to  receive  the  purchase-money,  and  all  rents  or  claims 
due  her  in  the  state  of  Indiana.  About  the  1st  of  October,  1850, 
said  Henry  II.  Clark,  having  with  him  the  power  of  attorney,  came  to 
the  county  of  Putnam,  and  had  an  interview  with  the  plaiiUiff  in 
relation  to  the  land.  The  jjlainliff  and  said  Henry  II.  Clark  went 
to  see  said  Allee.     In  the  language  of  said  Allee  the  plaintiff's  witness. 

23  I'iirt  f»f  the  ri|>liiii»n  is  «)iiiitt«.'<l. 


244  THE  iiFj.ATioN  (Part  1 

"Henry  IT.  Clark  came  to  my  house  in  company  witli  the  complain- 
ant, and  said  his  sister  (the  defendant)  was  dissatisfied  with  the  trade, 
and  gave  notice  to  the  complainant  that  she  wanted  the  land,  and  ex- 
hihited  his  power  of  attorney  from  defendant."  It  appears  that  after 
some  consultation  between  the  plaintiff  and  Allee,  it  was  agreed  that 
the  power  of  attorney  should  be  submitted  to  some  lawyer  of  Green- 
castle,  and  accordingly  the  whole  matter  was  submitted  to  Judge  Far- 
ley for  his  opinion.  On  the  same  evening  after  consulting  Judge  Far- 
ley, the  complainant  agreed  to  set  aside  the  contract,  and  give  $500 
for  the  land. 

At  the  time  of  this  transaction  none  of  the  principal  had  been  pail 
on  the  notes  for  the  purchase-money,  and  perhaps  but  a  portion  of 
the  interest.  The  principal  and  interest  due  on  the  notes  were  after- 
wards paid  by  complainant  to  said  Allee,  but  no  part  of  it  appears 
ever  to  have  been  paid  to  the  defendant,  nor  does  it  appear  that  she 
has  ever  received  anything  upon  the  land. 

The  question  arises  whether,  upon  the  foregoing  facts  (admitting 
the  original  contract  to  be  valid  and  binding,  and  not  set  aside  and 
canceled  by  the  subsequent  agreement  betw^ecn  the  plaintiff  and  said 
Henry,  as  the  agent  of  the  defendant),  the  payment  of  the  purchase- 
money  by  the  plaintiff  to  said  Allee,  was  a  payment  to  the  defendant? 

We  are  clearly  of  opinion  that  it  was  not.  The  authority  of  Allee 
in  the  matter  was  clearly  revoked  and  ended,  and  a  payment  to  him 
after  the  plaintiff  had  notice  that  he  was  not  authorized  to  receive  it, 
was  a  nulhty,  so  far  as  the  defendant  was  concerned. 

In  Story  on  Agency,  §  474,  it  is  said  that  an  authority  may  be 
revoked  by  a  "direct  and  formal  declaration  publicly  made  known,  or 
by  an  informal  writing,  or  by  parol ;  or  it  may  be  implied  from  cir- 
cumstances. What  circumstances  will  or  will  not  amount  to  a  revoca- 
tion, or  to  notice  of  a  revocation  by  implication,  cannot  be  stated  with 
any  definite  certainty.  But  there  are  some  acts  which  admit  of  little 
or  no  doubt.  Thus,  for  example,  if  the  principal  appoints  another 
person  to  do  the  same  act,  this  will  ordinarily  be  construed  to  be  a 
revocation  of  the  power  of  the  former  agent." 

Here,  before  the  purchase-money  was  paid  to  Allee,  the  defendant 
had  executed  a  power  to  Henry  H.  Clark,  by  which  she  not  only  au- 
thorized him  to  sell  and  convey  the  land,  but  to  receive  the  purchase- 
money  and  all  claims  due  her  in  the  state  of  Indiana,  and  of  this  fact 
the  plaintiff'  had  full  notice.  It  is  useless  to  say  that  the  defendant's 
leaving  of  the  notes  in  the  possession  of  Allee,  impliedly  gave  the 
plaintiff  the  right  to  pay  the  money  to  him.  The  plaintiff  knew  that 
the  defendant  wished  to  avoid  the  contract,  and  did  not  wish  to  receive 
the  money  upon  it  at  all.  There  could  be  no  implied  authority,  under 
such  circumstances,  for  Allee  to  receive  the  money,  and  his  express 
authority,  if  he  had  previously  had  any,  was  revoked.  The  revoca- 
tion of  Alice's  authority  would  not,  of  course,  affect  the  validity  of 
a  sale  made  by  him  previous  to  the  revocation,  but  it  took  away  his 


Ch.  5)  TERMINATION    OF    THE    RELATION  245 

right  to  act  further  as  the  agent  of  the  defendant,  either  in  receiving 
the  purchase-money,  or  otherwise  executing  the  contract. 

The  payment  of  the  purchase-money  to  Allee,  under  the  circum- 
stances, not  being  a  payment  to  the  defendant,  and  this  being  all  the 
payment  made,  there  was  a  failure  to  make  out  the  case  so  far  as  this 
essential  particular  is  concerned,  and  on  this  ground  a  new  trial  should 
have  been  granted.     *     *     * 

Judgment  reversed,  with  costs.    Cause  remanded  for  a  new  trial. 


BROOKSHIRE  v.  BROOKSHIRE. 

(Supreme  Court  of  North  Carolina,  1847.     30  N.  C.  [8  Ired.]  74,  47  Am. 

Dec.  341.) 

Plaintiff  was  appointed  by  deed  of  defendant  and  others  as  agent 
to  go  to  Alabama  to  settle  the  estate  of  their  brother  and  bring 
back  to  each  his  share.  After  one  trip  the  defendant  by  parol  revoked 
the  authority.  Plaintiff  made  a  second  trip  and  now  sues  defendant 
for  his  share  of  the  expenses. 

Nash,  J.^*  It  is  not  denied  by  the  plaintiff,  that,  in  this  case,  it 
was  within  the  power  of  the  defendant  to  put  an  end  to  his  agency, 
by  revoking  his  authority.  Indeed,  this  is  a  doctrine,  so  consonant 
with  justice  and  common  sense,  that  it  requires  no  reasoning  to 
prove  it.  But  he  contends,  that  it  is  a  maxim  of  the  common  law, 
that  every  instrument  must  be  revoked  by  one  of  equal  dignity.  It 
is  true  an  instrument  under  seal  cannot  be  released  or  discharged 
by  an  instrument  not  under  seal  or  by  parol,  but  we  do  not  consider 
the  rule  as  applicable  to  the  revocation  of  powers  of  attorney,  es- 
pecially to  such  an  one  as  we  are  now  considering.  The  authority  of 
an  agent  is  conferred  at  the  mere  will  of  his  principal  and  is  to  be 
executed  for  his  benefit ;  the  principal,  therefore,  has  the  right  to 
put  an  end  to  the  agency  whenever  he  pleases,  and  the  agent  has 
no  right  to  insist  upon  acting,  when  the  confidence  at  first  reposed  in 
him  is  withdrawn. 

In  this  case,  it  was  not  necessary  to  enable  the  plaintiff  to  execute 
his  agency,  that  his  power  should  be  under  seal ;  one  by  parol,  or  by 
writing  of  any  kind,  would  have  been  sufficient ;  it  certainly  cannot 
require  more  form  to  revoke  the  power  than  to  create  it.  Mr.  Story, 
in  his  treatise  on  Agency  (page  606J,  lays  it  down  that  the  revoca- 
tion of  a  power  may  be,  by  a  direct  and  formal  declaration  publicly 
made  known,  or  by  an  informal  writing,  or  by  parol ;  or  it  may  be 
implied  from  circumstances,  and  he  nowhere  intimates,  nor  do  any 
of  the  authorities  we  have  looked  into,  that  when  the  power  is  cre- 
ated by  deed,  it  must  be  revoked  by  deed.     And,  as  was  before  re- 

2*  I'art  of  the  ophiiuu  Is  oinllted. 


lM()  TiiK  kklation  (Parti 

ninrkod.  the  nature  of  the  eiMiueelion  between  the  iiriueipal  and  the 
agent  seems  to  be  at  war  with  such  a  principle.  It  is  slateil,  by  Mr. 
Story,  in  the  same  pas;e.  that  an  a.gency  may  be  revoked  by  implica- 
tion, and  all  the  text-writers  lay  down  the  same  doctrine.  Thus,  if 
another  agent  is  appointed  to  execute  powers,  previously  entrusted 
to  some  other  person,  it  is  a  revocation,  in  general,  of  the  power  of 
the  latter.  For  this  proposition,  Mr.  Story  cites  Copeland  v.  The 
Mercantile  Insurance  Company,  6  Pick.  198.  In  that  case,  it  was 
decided  that  a  power,  given  to  one  Pedrick  to  sell  the  interest  of 
his  principal  in  a  vessel,  was  revoked  by  a  subsequent  letter  of  in- 
struction to  him  and  the  master,  to  sell. 

As  then,  an  agent  may  be  appointed  by  parol,  and  as  the  appoint- 
ment of  a  subsequent  agent  supersedes  and  revokes  the  powers  pre- 
viouslv  granted  to  another,  it  follows,  that  the  power  of  the  latter, 
though  created  by  deed,  may  be  revoked  by  the  principal,  by  parol. 
But  the  case  in  Pickering  goes  further.  The  case  does  not  state,  in 
so  many  words,  that  the  power  granted  to  Pedrick,  was  under  seal, 
but  the  facts  set  forth  in  the  case,  show,  that  was  the  fact;  and,  if 
so,  is  a  direct  authority  in  this  case.  This  is  the  only  point  raised, 
in  the  plaintiff's  bill  of  exceptions,  as  to  the  Judge's  charge.    *    *    * 

Judgment  alarmed. 


DAVOL  V.  QUIMBY. 
(Supreme  Tudicial  Coiu't  of  Massachusetts,  18G5.    OH  Mass.  [11  Allen]  20S.) 

Contract,  to  recover  wages.  The  defence  was  payment  to  the  plain- 
tiff's agent ;    whose  agency  was  denied  by  the  plaintiff. 

At  the  trial  in  the  superior  court,  before  Wilkinson,  J.,  it  appeared 
that  the  plaintifif  ordered  one  Keach  to  collect  the  debt  of  the  defend- 
ant, and,  after  paying  to  one  Howe  a  sum  due  to  him  from  the  plain- 
tifif, to  remit  the  balance  to  the  plaintiff.  A  creditor  of  Keach,  ascer- 
taining that  the  latter  had  demanded  the  money  of  the  defendant, 
and  supposing  it  to  be  his  own  debt,  commenced  a  trustee  process 
against  Keach,  summoning  the  defendant  as  trustee.  The  plaintiff 
then  authorized  Howe  to  settle  the  trustee  process  "the  best  way 
he  could,"  receive  the  money  due  from  the  defendant,  apply  so  much 
thereof  as  was  necessary  in  payment  of  the  sum  due  from  the  plain- 
tiff to  How^e,  and  pay  the  balance  to  the  plaintifif.  Afterwards  the 
defendant  received  notice  from  an  attorney  at  law,  demanding  the 
money  for  and  on  account  of  the  plaintifif.  After  this,  the  defendant 
l)aid  the  money  to  Howe.  The  plaintifif  did  not  notify  Howe  of  any 
withdrawal  of  his  authority. 

The  plaintifif's  counsel  requested  the  court  to  instruct  the  jury  that 
if  the  defendant  had  notice  to  pay  the  attorney  of  the  plaintifif,  he 
could  not  be  justified  in  paying  the  money  to  How^e  after  such  notice 


Ch.  5)  TERMINATION    OF    THE    RELATION  247 

from  the  plaintiff,  and  if  he  did  so  he  did  it  at  his  own  risk,  and  did 
not  discharge  himself  from  liability  to  the  plaintiff.  The  judge  re- 
fused SO  to  rule,  and  the  jury  returned  a  verdict  for  the  defendant; 
and  the  plaintiff  alleged  exceptions. 

BiGELOW,  C.  J.  The  instruction  asked  for  by  the  defendant  was 
rightly  refused.  It  appeared  distinctly  from  the  evidence  that  the 
plaintiff  authorized  Howe  to  receive  the  money  from  the  defendant ; 
but  it  was  not  shown  that  this  authority  was  subsequently  revoked. 
The  mere  fact  that  the  plaintiff  also  authorized  another  person  to 
receive  the  same  money  did  not  prove  a  revocation.  There  may  be 
two  persons  appointed  to  exercise  the  same  power  as  agents  for 
a  principal.-^  If  there  is  nothing  in  the  nature  of  the  agency  to  ren- 
der an  authority  in  one  person  inconsistent  with  a  like  authority  in 
another,  both  may  w^ell  be  authorized,  and  the  acts  of  either  or  both, 
within  the  scope  of  the  agency,  will  be  valid  and  binding  on  the  prin- 
cipal. So  it  was  in  the  case  at  bar.  The  defendant  paid  to  one  agent 
of  whose  authority  he  had  had  notice.  This  authority  was  not  re- 
voked by  the  notice  given  to  the  defendant  that  the  plaintiff  had  also 
appointed  another  agent  with  similar  authority.  There  was  no  other 
evidence  of  revocation. 

Exceptions  overruled. 


KELLY  V.  BRENNAN. 
(Court  of  Chancery  of  New  Jersey,  1897.     55  N.  J.  Eq.  423,  37  Atl.  137.) 

Bill  for  specific  performance  of  a  contract  claimed  to  have  been 
made  by  defendant  by  her  agent  David  Giltinan. 

Grey,  V.  C.-**  There  are  two  questions  of  fact  in  this  case  on  which 
the  several  parties  are  at  variance,  the  settlement  of  which  will  deter- 
mine their  rights.  The  complainant  asserts  that  she  became  the  equit- 
able purchaser  of  the  lot  in  question  by  a  memorandum  of  sale  ob- 
tained  from    Mr.   Giltinan,    the   authorized    agent  of   the   defendant, 

25  The  iipiiiiiiitiucnt  of  a  srcond  iiRont  to  iKM-forin  the  sanio  dntios  as  to  the 
fianie  contract  may,  howtn-rr,  supcrscdi'  tlie  previous  apiioiotnuMit  and  revoke 
the  authority  of  the  first  a^i'iit.  Williamson  v.  llichardsou.  Fed.  Cas.  No.  17,- 
754  (lS(;7l. 

If  two  aKPnts  are  employed  separately  to  sell  the  same  property.  flmnL'li  ci- 
ther may  disfiosc  of  it  until  a  sale,  yet  if  a  sale  is  effected  liy  on<\  tiiat  will, 
of  course,  terminate  the  jiower  of  llie  otlier.  Hatch  v.  ('oddinj;ton,  ',).">  l'. 
S.  48,  L'4  L.  Kd.  .'!:;!)  (1S77) ;  Aliern  v.  I'.aker,  :'A  Minn.  OS.  24  X.  W.  .". H  (lss.-,i; 
post,  p.  274.  The  apjiointment  of  two  joint  aRonts  revokes  a  previous  jip- 
polntment  of  one  of  tliem  as  a  .several  a«ent.  Copeland  v.  M(M-cantile  Ins. 
Co.,  0  Tick.  IDS  (ISUS).  A  j)ower  of  attorney  will  not  be  revoked  by  tlie  f;iv- 
ing  of  some  otlier  instrument  (a  deed  of  trust)  which  is  not  inconsistent  with 
the  continuance  of  tlie  jiower.  French  v.  Townes,  10  (Jrat.  rt]:\  (IS.".'!).  Nor 
by  oilier  acts  of  tlie  priiicip.il  fbrin;,'in;:  suit  to  colle<'t  a  deiiti  whicii  are  en- 
tirely consistent  with  an  intent  to  continue  the  agency.  Walker  v.  I'.arring- 
ton.  28  Vt.  781  ris.-.Ci. 

-■"  I'art  of  the  ojiinion  is  omitted. 


248  TiiK  RELATION  (Parti 

Mrs.  Rronnnn.  She  also  alleges  that  the  defendant  Croshy  knew  she 
had  obtained  this  contract,  and,  in  order  to  cheat  her  of  her  bargain, 
afterwards  entered  into  a  snbsequent  contract  with  Mrs.  Brcnnan 
herself.  The  complainant  prays  that  the  specific  performance  of  her 
contract  obtained  through  the  agent  may  be  decreed. 

As  to  the  first  point,  the  dispute  turns  upon  the  assertion  on  the 
part  of  the  complainant  of  Mr.  Giltinan's  authority  to  bind  Mrs. 
Brennan  by  a  contract  of  sale,  and  a  denial  by  the  defendant  Mrs. 
Brennan  that  he  had  any  such  power.  The  original  employment  of 
]Mr.  Giltinan  was  in  writing,  and  made  him  Mrs.  Brennan's  agent 
to  sell  the  property,  fixing  his  commission.  She  subsequently,  as 
Mr.  Giltinan  testifies,  became  disquieted  (whether  reasonably  or  not 
is  of  no  consequence),  and  caused  the  words,  "subject  to  my  ap- 
proval," to  be  inserted  in  the  written  memorandum  employing  him. 
Mr.  Ferris,  Mrs.  Brennan's  attorney,  who  attended  to  this  change, 
says  it  was  done  about  the  middle  of  July.  Shortly  after  this,  about 
the  middle  of  August,  she,  by  her  attorney,  withdrew  this  paper  alto- 
gether from  Mr.  Giltinan.  Mr.  Giltinan  continued  to  receive  offers 
and  to  discuss  the  sale  of  the  property  with  Mrs.  Brennan  for  some 
time  after  the  withdrawal,  reporting  offers,  which  were  not  accepted. 

But,  if  it  be  assumed  that  Mrs.  Brennan  allowed  Mr.  Giltinan  to 
retain  any  authority  to  sell,  the  real  question  on  this  branch  of  the 
case  is,  what  was  the  character  of  that  authority  at  the  time  he  con- 
tracted with  Kelly?  That  it  was  originally  in  writing  and  unlimited 
all  agree.  That  it  was  modified  is  also  undisputed.  The  reason  for 
the  insertion  of  the  words,  "subject  to  my  approval,"  was  stated  by 
Mr.  Giltinan  himself  to  be  the  annoyance  which  Mrs.  Brennan  suf- 
fered because  of  the  representations  of  parties  in  Atlantic  City  "as 
to  the  danger  she  was  in  by  my  having  full  power  of  attorney  to- do 
as  I  pleased  with  her  property."  This  makes  it  obvious  that  Mrs. 
Brennan  was  unwilling  to  allow  Mr.  Giltinan  an  absolute  power  to 
make  a  sale  of  her  lands,  and  that  the  limitation  requiring  her  ap- 
proval was  necessary  to  satisfy  her  mind.  By  the  change,  this  writ- 
ten authority  was  so  restrained  that  if  Mr.  Giltinan  undertook  to  sell 
as  Mrs.  Brennan's  agent  he  was  thereafter  obliged  to  subject  his  ac- 
tion to  her  approval.  After  this-  he  testified  that  the  same  reasons 
led  to  the  second  call  of  Mr.  Ferris  (Mrs.  Brennan's  attorney),  when 
the  latter  took  away  the  paper,  now  one  of  limited  authority  only. 

Mrs.  Brennan  is  thus  shown  to  have  been  unwilling  that  Mr.  Gilti- 
nan should  exercise  the  authority  of  an  agent,  even  subject  to  her 
approval.  Mr.  Giltinan  claims  that  the  taking  away  of  the  paper  au- 
thority was  a  withdrawal  only  of  the  Atlantic  and  Iowa  avenue  lot, 
and  not  of  the  California  and  Pacific  avenue  lot,  now  in  question. 
But  the  paper,  as  charged  by  Mrs.  Brennan,  authorized  him  to  sell 
both  these  tracts  subject  to  Mrs,  Brennan's  approval,  one  no  more 
and  no  less  than  the  other.    When  it  was  taken  away  by  Mr.  Ferris 


Ch.  5)  TERMINATION    OF    THE    RELATION  249 

CMrs.  Brennan's  representative),  Mr.  Giltinan  testifies  that  Ferris 
"made  no  comments  and  no  remarks,  and  told  me  nothing  in  regard 
to  any  change  of  sentiments  or  instructions."  I  think  it  must  be 
taken  that  the  withdrawal  of  this  paper,  which  Mr.  Giltinan  defines 
in  its  original  form  to  have  been  a  full  power  of  attorney,  made  an 
end  of  Mr.  Giltinan's  authority  to  sell  any  of  the  land  described  in 
it.  The  demand  by  the  principal  for  the  absolute  delivery  of  her  let- 
ter of  attorney,  and  its  surrender  by  the  agent,  must  be  held  to  be 
a  revocation.  But  even  if  this  taking  away  of  the  written  authority 
is  held  not  to  have  removed  the  California  and  Pacific  avenue  lot 
from  Mr.  Giltinan's  control,  whatever  power  he  retained  under  it 
must  certainly  have  been  subject  to  her  approval  under  the  previous 
modification.     *     *     * 

There  is  no  dispute  between  the  parties  as  to  the  order  of  time 
in  which  the  events  narrated  happened.  Irrespective  of  questions  as 
to  the  existence  or  extent  of  Mr.  Giltinan's  authority  to  act  as  agent 
of  Mrs.  Brennan  in  the  premises,  and  to  bind  her,  without  her  pre- 
vious approval,  by  a  contract  to  sell,  it  appears  that  Mrs.  Brennan 
had  herself  entered  into  a  contract  with  Crosby  to  sell  him  the 
property,  and  had  accepted  $500  payment  on  account  of  the  purchase 
money,  before  Giltinan,  acting  as  her  agent,  had  made  any  agree- 
ment whatever  with  Mr.  Kelly,  or  had  even  heard  from  him  that  he 
was  willing  to  pay  the  full  price.  The  letters  and  telegrams  and 
checks  produced  support  the  statement  that  the  sale  by  Mrs.  Brennan 
to  Crosby's  agent  preceded  the  sale  by  Giltinan  to  Kelly  beyond  any 
doubt  whatever. 

When  Mrs.  Brennan,  the  principal,  contracted  with  Crosby,  that 
act  of  itself  stripped  her  agent,  if  she  had  one,  of  all  power  to  make 
another  contract  in  derogation  of  that  entered  into  by  his  principal. 
The  agent  could  have  no  greater  authority  than  the  principal,  and, 
the  latter  having  disposed  of  the  subject-matter  of  the  agency,  the 
power  of  the  agent  to  act  any  further  in  the  premises  was  at  once 
ended.  When  Giltinan,  as  agent  for  Mrs.  Brennan,  undertook  to  deal 
with  Kelly,  the  lot  had  already  been  sold  by  Mrs.  Brennan,  and  partly 
paid  for,  and  consequently  this  later  transaction  was  of  no  force. 

The  complainant's  charge  against  the  defendant  Crosby  is  that  he, 
knowing  of  the  complainant's  previous  purchase,  entered  into  a  pre- 
tended contract  on  the  following  day  to  buy  the  property  from  Mrs. 
Brennan ;  and  her  prayer  is  that  her  contract  with  Mrs.  Brennan, 
obtained  as  set  out  in  the  bill  from  Mr.  Giltinan,  may  be  specifically 
enforced  by  a  conveyance,  etc.,  upon  payment  of  price,  etc.,  mort- 
gage made,  etc.  Crosby  denies  this  charge  by  his  answer,  and  sets 
up  his  own  agreement  made  with  Mrs.  Brennan  by  his  agent  Devine 
as  prior  in  point  of  time,  and  without  notice  of  any  agreement  of 
complainant. 


-">0  TiiK  itin.A'iioN  (Parti 

The  issue  presented  betwei'u  these  ]>arlies  is,  (hen,  siiiiplv  and  only 
whether  Crosby,  alter  coniphiinant  had  obtained  her  ai;reenient,  an;l 
haviui;-  kiiowledj^e  of  this  faet,  secured  another  from  Mrs.  Tirennan 
in  favor  of  himself.  Tlie  complainant  thus  bases  her  whole  complaint 
against  Crosby  solely  ujion  her  alleged  priority  in  securing  her  own 
contract.  The  review  of  the  evidence  above  given  shows  that  the 
agreement  which  Devine,  Crosby's  agent,  procured  for  him  in  Phila- 
delphia was  in  fact  made  before  the  contract  l)etween  Kelly  and  Mr. 
Giltinan  in  Atlantic  City,  though  on  the  same  day.  The  supplemental 
and  fuller  agreement  with  Crosby  was  signed  by  him  on  the  same 
day  in  Atlantic  City,  and  perfected  on  the  following  Monday  in  Phila- 
ilelphia  by  Mrs.  Brennan.  It  is  also  shown  that  the  Kelly  contract, 
by  reason  of  the  lack  of  authority  of  Mr.  Giltinan  at  the  time  of 
making  it  to  bind  Mrs.  Brennan,  is  of  no  force  to  enable  the  com- 
plainant to  maintain  her  bill  and  entitle  her  to  the  relief  she  asks 
against  either  defendant. 

I  will  advise  a  decree  dismissing  the  complainant's  bill,  with  costs. 


GILBERT  V.  HOLMES. 

(Supreme  Court  of  Illinois,  1871.     04  111.  548.) 

Bill  by  Holmes  to  foreclose  an  instrument  in  the  nature  of  a  mort- 
gage on  account  of  a  condition  broken  and  forfeiture  of  the  estate,  and 
to  redeem  w^hat  was  alleged  to  be  a  senior  mortgage.  One  Presch- 
baker,  the  owaier  of  the  lands  in  question,  in  1850  gave  an  absolute 
deed  of  them  to  Feaman  and  Gilbert,  and  received  back  a  bond  for 
the  reconveyance  of  the  land  upon  his  paying  to  them,  within  2  years, 
$3,000.  The  deed  and  bond  were  at  once  recorded.  Preschbaker 
abandoned  the  lands  and  went  to  California.  In  1858  Holmes  se- 
cured from  Preschbaker  a  letter  of  attorney  authorizing  him  to  redeem 
the  lands,  by  suit  or  otherwise,  in  Preschbaker's  name,  the  latter  giving 
bond  in  penalty  of  $5,000  to  convey  to  Holmes  one-half  of  all  lands 
he  might  recover.  These  instruments  were  not  recorded.  The  same 
year  Holmes  began  suit,  which  w^as  decided  adversely  to  him  in  the 
Circuit  Court.  Holmes  said  nothing  as  to  an  appeal  or  suing  out  a 
writ  of  error.  In  1861  one  Morrison  bought  the  lands,  and  in  1863 
Holmes  prosecuted  a  writ  of  error  to  the  above  decree  out  of  the 
Supreme  Court,  wherein  the  decree  of  the  Circuit  Court  was  reversed 
on  the  ground  that  Preschbaker's  deed,  being  intended  as  security, 
must  be  regarded  as  a  mortgage.  In  January,  1864,  Plolmes  pro- 
cured from  Preschbaker  the  instrument  on  which  this  suit  is  brought, 
viz.,  a  conveyance  of  the  lands  subject  to  become  void  if  Preschbaker 
should  keep  his  original  agreement  with  Holmes.  In  September,  1864, 
Preschbaker  for  $2,500  quitclaimed  the  lands  to  Gilbert,  and  authorized 
Gilbert  to  dismiss  the  suit  instituted  by  Holmes  in  Preschbaker's  name. 


Ch.  5)  TERMINATION    OF    THE    RELATION  251 

The  suit  was  dismissed,  and  Holmes  now  files  this  suit  in  his  own  name. 

McAllister,  J.-"  [After  stating  the  facts  and  holding  that 
Holmes's  power  of  attorney  and  mortgage  so  called  were  merely  cham- 
pertous  contracts:]  *  *  *  But  there  is  still  another  view,  which, 
if  we  are  correct  in  regard  to  it,  will  show  that,  upon  strict  principles 
of  law,  there  is  no  foundation  for  his  suit. 

It  is  an  indispensable  prerequisite  to  the  right  of  Holmes  to  a  fore- 
closure under  his  deed  in  the  nature  of  a  mortgage,  as  his  counsel 
characterizes  the  instrument,  that  there  should  be  a  breach  of  condi- 
tion, which  would  operate  to  w^ork  a  forfeiture  and  make  the  estate 
absolute. 

This  proposition,  we  apprehend,  cannot  be  successfully  controverted. 
Then,  upon  any  fair  construction  of  the  terms  contained  in  the  con- 
dition, what  would  constitute  such  a  breach? 

The  covenant,  the  performance  of  wdiich  that  instrument  was  in- 
tended to  secure,  was,  that  Preschbaker  would  convey  by  valid  deed  to 
Holmes  one-half  of  all  of  said  lands,  which  Holmes  might  redeem  or 
recover  to  Preschbaker  by  virtue  of  the  power  of  attorney,  when  the 
same  should  be  so  redeemed  or  recovered. 

Until  Holmes  e.xercised  the  power  given  by  the  letter  of  attorney, 
and  by  its  exercise  redeemed  or  recovered  some  portion  of  the  lands 
to  Preschbaker,  the  latter  was  under  no  duty  or  obligation  to  convey 
to  the  former,  for,  until  then,  Holmes  was  entitled  to  no  interest  in 
the  lands. 

There  is  no  ground  for  the  pretense  that  Holmes,  at  the  time  he  com- 
menced suit  for  foreclosure,  had  redeemed  or  recovered  any  portion 
of  the  land  by  virtue  of  the  power  of  attorney  or  otherwise. 

There  was  no  covenant  or  stipulation  contained  in  any  of  the  in- 
struments given  by  Preschbaker  to  Holmes  that  the  power  should  be 
irrevocable.  H,  therefore,  there  was  nothing  in  its  nature  which 
would  render  it  irrevocable,  Preschbaker  was  at  liberty  to  revoke  it 
at  his  will  and  pleasure,  and  if  so,  the  exercise  of  that  right  could  not 
constitute  a  breach  of  the  condition  contained  in  the  deed  of  January 
6,  1864. 

The  letter  of  attorney  was  not  given  to  secure  money  loaned,  and 
was  not,  by  its  terms,  irrevocable,  or  made  so  by  the  terms  of  either 
of  the  other  writings.  It  was  not  a  power  coupled  with  an  interest ; 
because,  by  it,  and  the  contemporaneous  agreement.  Holmes  was  simply 
to  have  an  interest  in  the  proceeds  arising  from  the  execution  of  the 
jiower. 

The  case  of  Bonney  v.  Smith,  17  111.  531,  is  a  direct  authority  for 
holding  the  power,  in  the  case  at  bar,  to  be  revocable  at  the  will  of  the 
princi[)al.  Xor  was  this  quality  changed  by  the  deed  of  January  6, 
1864.  That  was  given  merely  to  secure  the  performance  by  Presch- 
baker  of   the   original   bargain    to  convey   one-half   the   lands   which 

-"  r.'irt  of  flic  ii|iiiii(in  is  nniitfcd. 


252  Tin:  KKi.A'iMON  (Parti 

Holmes  might  redeem  or  recover,  to  the  former,  by  viiluo  of  the  let- 
ter of  attorney,  leaving  it  to  the  volition  of  Holmes  to  act  under  the 
jiower,  and  of  Preschbaker  to  continue  it.  By  this  writing  no  new 
terms  were  added  to  the  original  bargain ;  the  power  was  not  annexed 
to  the  estate,  nor  was  the  estate  auxiliary  to  its  exercise.  It  was  not 
a  power  coupled  with  an  interest  before,  and  it  remained  the  same 
after  that  deed  was  UKule. 

It  was  originally  a  mere  common  law  authority  in  Holmes  to  do 
certain  acts  for  and  in  the  name  of  his  principal,  and  the  deed,  with- 
out superadding  any  new  terms,  is  given  solely  with  reference  to  this 
pre-existing  transaction,  and  to  secure  to  Holmes  the  fruits  arising 
from  the  exercise  of  the  power,  if  he  should  choose  to  exercise  it. 
The  exercise  of  the  power  by  him  was  an  indispensable  condition 
precedent  to  the  estate  ever  becoming  absolute  in  him. 

With  these  several  instruments  before  him,  would  any  good  lawyer 
contend  that  Holmes  could  exercise  the  power  conferred  by  that 
letter  of  attorney  in  his  own  name,  or  that  he  had  an  interest  which 
he  could  convey  to  a  third  person,  and  the  assignee  exercise  the  power 
in  his  own  name?  Yet  all  these  consequences  would  follow,  if  Holmes 
had  a  power  coupled  with  an  interest,  as  that  term  is  understood  from 
the  books.    Strother  v.  Law,  54  111.  413. 

"A  power,  coupled  with  an  interest,  must  create  an  interest  in  the 
thing  itself  upon  which  the  power  is  to  operate.  The  power  and  estate 
must  be  united,  or  be  co-existent,  and  this  class  of  powers  survive  the 
principal,  and  may  be  executed  in  the  name  of  the  attorney."  Bonney 
V.  Smith,  supra,  and  authorities  there  cited. 

By  the  express  terms  of  the  condition,  the  lands  must  have  been 
recovered  to  Preschbaker  before  he  was  under  any  obligation  to  con- 
vey any  part  to  Holmes,  and  everything  was  to  be  done  in  Presch- 
baker's  name. 

What  is  there  in  the  terms,  or  legal  effect  of  these  writings,  between 
Preschbaker,  the  principal,  and  Holmes,  the  agent,  to  tie  the  hands  of 
the  principal  so  as  to  prevent  him  from  parting  with  the  subject-mat- 
ter of  the  agency  ? 

Counsel  for  Holmes  has  failed  to  point  out  anything,  and  we  can 
perceive  nothing  of  the  kind.  That  being  the  case,  then,  when  Presch- 
baker, as  principal,  assumed  to  act  in  that  behalf,  and  sold  and  con- 
veyed his  equity  of  redemption  to  Gilbert  for  a  valuable  consideration, 
thus  parting  with  all  his  right  in  or  control  over  the  subject-matter  of 
the  agency,  this  was  such  a  termination  of  his  own  authority,  as,  by 
operation  of  law,  terminated  that  of  the  agent  also. 

This  doctrine  is  also  forcibly  stated  by  Story,  in  his  work  on  Agency, 
§  481 :  "A  revocation,  by  operation  of  law,  may  be,  by  a  change  of  con- 
dition, or  of  state,  producing  an  incapacity  of  either  party.  This  pro- 
ceeds upon  a  general  rule  of  law,  that  the  derivative  authority  expires 
with  the  original  authority  from  which  it  proceeds.  The  power  of 
constituting  an  agent  is  founded  upon  the  right  of  the  principal  to  do 


Ch.  5)  TERMINATION    OF    THE    RELATION  253 

the  business  himself;  and  when  that  right  ceases,  the  right  of  creat- 
ing an  appointment,  or  continuing  the  appointment  of  an  agent  already 
made,  for  the  same  purpose,  must  cease  also.  In  short,  the  derivative 
authority  can  not,  generally,  mount  higher,  or  exist  longer,  than  the 
original  authority." 

A  summary  of  this  view  is,  that  the  conveyance  in  the  nature  of  a 
mortgage  is  the  foundation  of  this  suit,  and  it  is  virtually  a  suit  to 
foreclose  that  mortgage  and  redeem  from  an  alleged  prior  one;  that, 
in  order  to  such  foreclosure,  there  must  be  a  breach  of  the  condition — 
a  forfeiture  of  the  estate  to  the  mortgagee ;  that  such  a  breach  could 
only  occur  after  the  mortgagee  had  redeemed,  or,  by  action  in  mort- 
gagor's name,  recovered  the  lands,  or  some  portion  thereof,  to  the 
mortgagor  by  virtue  of  the  power  of  attorney ;  that  the  power  thereby 
given  was  not  coupled  with  an  interest,  nor  was  the  principal  re- 
strained, by  anything  in  the  writings,  from  doing  the  business  himself, 
or  disposing  of  the  subject-matter  of  the  agency,  or,  in  other  words, 
from  revoking  the  power;  that,  by  the  sale  and  conveyance  of  the 
lands,  the  subject-matter  of  the  agency,  the  principal  terminated  his 
own  authority  or  control  over  it;  that  such  exercise  and  termination 
of  his  own  authority  being  but  the  exercise  of  a  legal  right  in  the  prin- 
cipal, it  gave  a  good  title  to  Gilbert  as  against  Holmes,  the  agent,  and 
operated  as  a  revocation  of  the  derivative  authority  of  the  latter,  so 
that  there  was  no  breach  of  the  condition  contained  in  the  so-called 
mortgage,  and  consequently,  no  forfeiture  of  the  estate  to  Holmes. 

W'e  are,  therefore,  of  opinion  that  the  decree  of  the  circuit  court 
should  be  reversed  and  the  bill  dismissed. 

Decree  reversed. 


(H)  Notice  of  the  Revocation 

. V.  HARRISON.28 

(Court  of  King's  Bench  at  Nisi  Prius,  IflOO.    12  Modern,  34G.) 

A  servant  had  power  to  draw  bills  of  exchange  in  his  master's 
name,  and  afterwards  is  turned  out  of  the  service. 

Holt,  Chief  Justice.  If  he  draw  a  bill  in  so  little  time  after  that 
the  world  cannot  take  notice  of  his  being  out  of  service,  or  if  he 
were  a  long  time  out  of  his  service,  but  that  kept  so  secret  that  the 
world  cannot  take  notice  of  it,  the  bill  in  those  cases  shall  bind  the 
master. 

2«  Tills  niso  w.MM  quotfd  with  iiiiproviil  in  MitiTini  v.  Sicli,  H  I'.iii.  .".Or)  (isl'J) 
in  wliifii  it  »vns  licld  fiiiit  fiio  sunn-  nih>  ;is  to  niilifo  Mpplios  to  s.ilcs  of  l:iiid 
by  an  nuciit  tiiiit  Ixu'd  Holt  and  flic  civil  law  (I'othifi-  on  Obligations,  Is'os. 
79,  80,  81,  448)  applied  to  the  sale  of  personal  effects. 


25i  TiiK  UKLATioN  (Part  1 


LOOI^nS  ads. 


(Supremo  Court  of  Judicature  of  New  York,  l.s:50.    10  Wend.  G41.) 

Motion  by  defonclant  to  set  aside  report  of  referees,  on  the  ground 
that  neither  a  rcf^licaiioii  to  a  jilea  of  payment,  or  a  notice  of  hearing 
had  been  served.  The  defeiulant,  who  is  an  attorney,  defends  in  per- 
son. Pending  the  suit  lie  appointed  a  new  law  agent  in  Albany,  with- 
out notiee  to  the  tirst  agent  that  his  services  were  no  longer  required. 
The  plaintiff's  attorney  not  being  informed  of  the  change,  continued 
to  serve  papers  on  the  old  agent,  who  being  also  ignorant  of  the 
change,  received  and  forwarded  papers  as  usual,  and  among  others, 
leceived  the  replication  and  notice  of  hearing  in  question.  These  pa- 
pers, though  forwarded  did  not  reach  the  defendant. 

Broxson,  J.  Parties  are  not  bound  to  search  the  agency  book 
efcr\  time  they  serve  a  paper.  When  these  proceedings  were  com- 
menced, Mr.  Dean  was  the  defendant's  law  agent,  and  the  plaintiff's 
attorney  was  regular  in  continuing  to  serve  papers  upon  him,  so  long 
as  he  acted  as  agent.  If  the  defendant  had  advised  Mr.  Dean  that 
he  had  appointed  a  new  agent  and  no  longer  desired  his  services,  Mr. 
Dean  would  not  have  received  the  papers,  and  would  have  told  the 
plaintiff's  attorney  of  the  change.  The  accident  which  has  happened 
is  chargeable  to  the  defendant's  own  neglect.  But  he  swears  to  merits, 
and  must  be  relieved  on  payment  of  costs. 

Ordered  accordingly. 


'      y  BURCH  V.  AMERICUS  GROCERY  CO. 

(Supreme  Court  of  Georgia,  1906.     125  Ga.  153,  53  S.   E.  1008.) 

Evans,  J.^°  The  Americus  Grocery  Company  sued  J.  B.  Burch 
for  a  balance  alleged  to  be  due  on  open  account.  The  only  item  in 
dispute  was  one  of  May  8,  1903,  for  a  certain  quantity  of  tobacco. 
The  defendant  contended  that  this  item  was  purchased  by  his  clerk, 
Mike  Burch,  after  he  had  left  his  employment,  and  that  he  neither 
authorized  nor  ratified  the  purchase  nor  received  the  tobacco.  On 
the  other  hand,  the  plaintiff  insisted  that  Mike  Burch  was  the  general 
agent  of  the  defendant  in  the  management  of  his  store,  and  as  such, 
on  previous  occasions,  had  ordered  goods  of  plaintiff  on  defendant's 
account,  and  that  the  plaintiff,  without  notice  that  Mike  Burch  was 
no  longer  employed  by  the  defendant,  took  the  order  in  the  defend- 
ant's name  and  shipped  the  goods  to  the  defendant,  as  was  usual  in 
the  past  transactions.  On  the  trial  it  appeared  that  the  defendant  op- 
erated a  sawmill  and  in  connection  therewith  conducted  a  store  or  com- 
missary. The  commissary  was  in  the  charge  of  Mike  Burch,  who 
purchased  all  the  merchandise  therein  sold  and  managed  the  business. 

2  9  Part  of  the  opinion  i.s  omitted. 


Ch.  5)  TERMINATION    OF   THE    RELATION  255 

On  former  occasions,  the  plaintiff  had  sold  merchandise  to  the  de- 
fendant upon  the  order  of  his  agent,  Mike  Burch. 

When  the  merchandise,  to  recover  the  price  of  which  the  present 
action  was  brought,  was  ordered  of  the  plaintiff  by  Mike  Burch,  he 
was  not  in  the  employment  of  the  defendant,  and  had  not  been  for 
two  months  past.  Neither  the  plaintiff  company  nor  its  "drummer" 
was  aware  at  the  time  of  receiving  the  order  that  Mike  Burch  was  no 
longer  in  the  service  of  the  defendant.  The  plaintiff's  salesman  called 
at  the  commissary  of  the  defendant  and  asked  for  Mike  Burch,  as 
he  had  always  done,  and  was  informed  that  i\Iikc  Burch  was  about 
three  miles  away,  superintending  the  putting  down  of  a  sawmill. 
There  he  found  him  and  took  the  order  for  the  merchandise.  It  was 
shipped  to  the  defendant  and  the  bill  of  lading  was  mailed  to  him. 
The  defendant  testified  that  the  goods  were  never  received  by  him,  but 
were  taken  possession  of  by  Mike  Burch  without  his  knowledge,  and 
that  he  never  received  the  bill  of  lading  for  the  goods.  Upon  these 
facts  the  jury  returned  a  verdict  in  favor  of  the  plaintiff  for  the  value 
of  the  goods,  which  verdict  the  trial  judge  refused  to  set  aside  on 
motion  for  a  new  trial. 

1.  In  the  management  of  the  business  of  the  commissary,  the  agent, 
Mike  Burch,  had  general  powers.  Relatively  to  this  business,  he  was 
the  general  agent  of  the  defendant  in  the  purchase  of  merchandise. 
"Whenever  a  general  agency  has  been  established  for  any  purpose,  all 
persons  who  have  dealt  with  such  agent,  or  who  have  known  of  the 
agency  and  are  apt  to  deal  with  him,  have  a  right  to  presume  that  such 
authority  will  continue  until  it  is  shown  to  have  been  terminated  in 
one  way  or  another ;  and  they  also  have  a  right  to  anticipate  that 
if  the  principal  revokes  such  authority,  they  will  be  given  due  notice 
thereof.  It  is  a  general  rule  of  law,  therefore,  upon  which  there  seems 
to  be  no  conflict  of  authorities,  that  all  acts  of  a  general  agent  within 
the  scope  of  his  authority,  as  respects  third  persons,  will  be  binding 
on  the  princii)al,  even  though  done  after  revocation,  unless  notice 
of  such  revocation  has  been  given  to  those  persons  who  have  had  deal- 
ings with  and  who  are  apt  to  have  other  dealings  with  the  agent  upon 
the  strength  of  his  former  authority."  ^°     1  Clark  &  Skyles  on  Agency, 

•■!"  Accord  :  Insurance  Co.  v.  .McCiiin,  !)(!  V.  S.  S4,  L'4  L.  Kd.  (io;?  (1S77); 
("liillin  V.  Lcnlifiin,  (H!  X.  Y.  .".Ol  (1S7<i);  M<-.\cill.v  v.  (V)ntinL'ntal  Life  Ins. 
<'o.,  (;<!  .v.  y.  I.'.'!  (lS7<)j.  cited  in  Stevens  v.  Sciii-oeder,  40  App.  Div.  .V.)(»,  ijS 
N.  Y.  Supii.  r»2  (IMJit);    liricii  v.  Mc(  "oi  ndcli,  <i(i  Ind.  l.'4:{  (IS7<)). 

Xotif.vin;;  tlie  iijicnt,  l)Ut  le:ivin>^  in  liis  iiiinds  a  written  power,  will  not 
protect  the  principal  as  to  tliird  jiersons  relyinj.;  on  tlie  i>o\ver  and  liavinK  no 
notice  of  the  revocation.  Heard  v.  Kirlv.  II  N.  II.  :{07  (ISJO).  And  the  same 
result  follows  when  the  a^ent  has  had  gnu  ml  <  Diiilityinctit.  Tier  v.  liMnip- 
son.  ;',;"  Vt.  179.  Sli  Am.  I)<'c.  (;;!4  (ISd'J).  In  WillianiH  v.  Hiriiecl.,  HolTman, 
("li.  .'',.'0  (IK-JOi,  may  he  found  a  useful  survey  of  the  early  cases,  esiieciaily 
as  to  what  constitutes  a  sullicieiit  notice,  from  whicli  tlie  Court  <leduces  tin' 
rule  that  every  case  miist  stand  on  its  peculiar  facts  to  show  whether  the 
third  i)erson  knew  of  tin'  revocation,  and  "whatever  is  sullicient  t(^  put  him 
upon  iiKiuiry  is  e<|ulvalent  to  actiuil  notice." 

In   rerrin.'  v.   .I.-rmyn.    !<;.'!    I'a.   4;t7,  :;(»   Atl.  'JO'J  nsn4),  It   Is   s:iid    th:\t    no- 


L'r>()  Tino  uKi.A'ritiN  (Parti 

§  17o  (li\    This  rule  was  slalcil  and  applied  in  Thompson  v.  Douglass, 
04  Ga.  57. 

The  obligation  resting  upon  the  principal  of  giving  notice  of  the 
revocation  of  the  authority  conferred  upon  his  agent  has  been  analo- 
gized to  the  duty  which  the  law  imposes  upon  the  members  of  a  part- 
nership to  give  due  notice  of  its  dissolution  to  creditors  and  the  pub- 
lic at  large.    Claflin  v.  Lenheim,  66  N.  Y.  301 ;  1  Parsons  on  Contracts 
(9th  Ed.)  72,  and  citations.    Where  there  is  no  attempt  at  all  to  com- 
ply with  this  duty,  a  retiring  partner  is  to  be  held  liable  for  the  debts 
of'  the  partnership,  created  after  he  ceased  to  be  a  member  thereof, 
unless  he  shows  that  notice  of  his  retirement  had  been  brought  home 
to  the  persons  who   subsequently   became   its  creditors.      Ewing  v. 
Trippe,  73  Ga.  776 ;  Pyron  v.  Ruohs,  120  Ga.  1064,  48  S.  E.  434,  and 
cit.    Actual  notice  alone  will  affect  creditors  of  the  firm.    Askew  v.  Sil- 
man,  95  Ga.  678,  22  S.  E.  573 ;   Camp  v.  Southern  Banking  Co.,  97 
Ga.  582,  25  S.  E.  362.     And  like  notice  must  be  shown  before  one 
who  has  revoked  the  authority  conferred  upon  his  general  agent  will 
be  at  liberty,  relatively  to  persons  who  have  dealt  with  such  agent  upon 
the  faith  of  his  authority  as  recognized  by  his  principal  in  the  past, 
to  repudiate  a  contract  made  in  behalf  of  the  principal  by  the  agent 
after  his  authority  has  been  revoked.     Braswell  v.  Insurance  Co.,  75 
N.  C.  8;    1  Parsons  on  Contracts  (9th  Ed.)  71.    The  term  "actual  no- 
tice" is  intended  to  be  understood  in  its  strictly  legal,  technical  sense, 
and  is  not  to  be  confounded  with  actual  knowledge,  which,  as  was 
pointed  out  in  Clarke  v.  Ingram,  107  Ga.  570,  33  S.  E.  802,  is  by  no 
means  a  synonymous  or  interchangeable  term.    "Notice  is  actual  when 
one  either  has  knowledge  of  a  fact  or  is  conscious  of  having  the  means 
of  knowledge,  although  he  may  not  use  them."     It  may  be  either  "ex- 
press  notice,"  or  simply  "implied  notice";    notice  communicated  by 
direct  and  positive  information  from  persons  cognizant  of  the  fact,  or 
notice  such  as  "arises  when  the  party  to  be  charged  is  shown  to  have 
had  knowledge  of  such  facts  and  circumstances  as  would  lead  him, 
by  the  exercise  of  due  diligence,  to  a  knowledge  of  the  principal  fact." 
Id.  571. 

In  the  present  case  no  express  notice  was  shown,  and  the  controlling 
issue  was  whether  or  not  the  plaintiff  had  "implied  notice"  that  there 
had  been  a  revocation  of  the  agency,  within  the  meaning  of  Civ.  Code 
1895,  §  3933,  which  declares  that:  "Notice  sufficient  to  excite  atten- 
tion and  put  a  party  on  inquiry  is  notice  of  everything  to  which  it  is 
afterwards  found  such  inquiry  might  have  led.     Ignorance  of  a  fact, 

tice  of  the  revocation  of  an  agency  may  be  shown  by  written  or  oral  com- 
luunication  to  the  agent,  or  by  circumstances  and  a  course  of  dealing  incom- 
patible with  the  want  of  it.  If  the  evidence  is  conflicting  the  jury  must  de- 
cide. 

In  a  special  agency,  under  authority  to  do  a  single  act,  no  notice  of  revoca- 
tion is  necessary,  and  a  revocation  will  be  implied  from  a  disposition  of  the 
subject-matter  of  the  agency.  Donnan  v.  Adams,  30  Tex.  Civ.  App.  G15,  71 
S.  W.  580  (1902). 


Ch,  5)  TERMINATION    OF    THE    RELATION  257 

due  to  negligence,  is  equivalent  to  knowledge  in  fixing  the  rights  of 
parties."  The  only  circumstance  upon  which  the  defendant  could  rely 
as  suggesting  the  necessity  of  making  inquiry  whether  the  agency  had 
been  terminated  was  that  the  order  for  the  goods  was  given  to  the 
plaintiff's  salesman  three  miles  from  the  defendant's  store,  where  the 
agent  had  been  employed.  The  defendant  was  engaged  in  the  saw- 
mill business,  and  his  "commissary"  was  run  in  connection  with  that 
business,  as  an  adjunct  to  it,  and  not  as  a  wholly  independent  enter- 
prise. When  the  order  for  the  goods  was  taken,  Mike  Burch,  who 
still  assumed  to  act  as  the  defendant's  agent,  was  superintending  the 
erection  of  a  sawmill.  That  it  did  not  belong  to  the  defendant  or  was 
not  to  be  used  in  connection  with  his  business  was  not  self-apparent, 
nor  was  the  fact  that  Mike  Burch  was  not  at  the  time  engaged  in 
his  customary  duties  at  the  commissary  calculated  to  put  the  plaintiff's 
salesman  on  notice  that  he  had  left  the  service  of  the  defendant. 

Moreover,  the  salesman  had  first  driven  by  the  store  of  the  de- 
fendant and  inquired  for  Mike  Burch,  who  had  theretofore  been  in 
charge  of  it.  Instead  of  being  notified  that  Mike  Burch  was  no  longer 
in  the  defendant's  employ,  the  salesman  was  told  where  Mike  Burch 
could  be  found.  Under  these  circumstances  it  is  not  strange  that  the 
salesman  should  assume  that  the  employes  at  the  store  of  the  de- 
fendant understood  that  he  had  called  on  business,  as  theretofore,  and 
wished  to  see  the  defendant's  representative,  nor  is  it  remarkable  that, 
after  being  informed  as  to  his  whereabouts  but  given  no  intimation 
that  he  was  no  longer  the  defendant's  agent,  the  drummer  should  en- 
tertain no  doubt  as  to  the  continuance  of  the  general  agency.  The 
jury,  after  considering  all  the  facts  and  circumstances  brought  to 
light  at  the  trial,  found  against  the  contention  of  the  defendant  that 
due  caution  and  prudence  on  the  part  of  the  plaintiff's  drummer  ought 
to  have  suggested  to  him  the  propriety  of  making  inquiry,  if  he  did 
not  divine  the  truth. 

The  burden  of  proof  was  upon  the  defendant  to  establish  his  de- 
fense that  the  plaintiff  was  affected  with  implied  notice.  McLean  v. 
Camak,  97  Ga.  812,  813,  25  S.  E.  493 ;  English-Am.  Loan  Co.  v.  Hiers, 
112  Ga.  823,  38  S.  E.  103.  The  plaintiff  being  a  creditor  of  the  de- 
fendant and  having  had  numerous  business  transactions  with  his  ac- 
credited agent  was  entitled  to  receive  a  formal  notification  from  him 
of  the  termination  of  the  agency,  or  the  legal  equivalent  of  such  a 
notification.  The  plaintiff  could  not  in  good  faith  remain  passive,  so 
long  as  the  defendant  failed  in  his  legal  duty  to  take  active  measures 
to  impart  notice.  Camp  v.  Banking  Co.,  97  Ga.  586,  25  S.  E.  362. 
"If  one  of  two  innocent  parties  must  suffer  by  the  act  of  a  third 
party"  assuming  to  act  as  an  agent  of  one  of  them,  "he  who  put  it  in 
the  power  of  such  third  party  to  do  the  wrongful  act  must  suffer  the 
loss,  rather  than  the  otlier  innocent  prirty  who  would  be  a  victim  with- 
out any  fault  on  his  part."  BlaisdcU  v.  Bohr,  71  Ga.  382.  The  de- 
<;or)i).rn.v*i  .\. — 17 


-~)S  THK    KKI.ATION  (Parti 

fendant  was  admittedly  at  fault,  haviiii;  failed  to  take  any  steps  to 
give  Motiee  to  the  plaiiititY,  whereas  the  plaintiff  had  not  omitted  to 
perform  any  legal  duty  owing  to  the  defendant,  and  the  i)laintiff's 
drumnur  admittedly  acted  in  entire  good  faith. 

The  jury  took  the  view  that  the  plaintilT  should  not  be  called  on 
to  suffer  the  loss.  "In  this  there  is  no  hardship  upon  the  defendant," 
as  was  pointed  out  by  Ranallo,  J.,  in  Claflin  v.  Lenheim,  supra,  who 
added  that  it  was  the  defendant's  duty,  "after  he  had  accredited  his 
brother  for  a  series  of  years  as  authorized  to  deal  in  his  name  and  on 
his  responsibility,  when  he  terminated  that  authority,  to  notify  all 
parties  who  had  been  in  the  habit  of  dealing  with  his  agent,  as  the 
plaintitTs  had  been  to  his  knowledge.  This  was  an  act  easily  per- 
formed, and  would  have  been  a  perfect  protection  to  him  and  pre- 
vented the  plaintiffs  from  being  deceived.  Justice  to  parties  dealing 
with  agents  requires  that  the  rule  requiring  notice  in  such  cases  should 
not  be  departed  from  on  slight  grounds,  or  dubious  or  equivocal  cir- 
cumstances substituted  in  place  of  notice.  If  notice  was  not  in  fact 
given,  and  loss  happens  to  the  defendant,  it  is  attributable  to  his  neg- 
lect of  a  most  usual  and  necessary  precaution."  The  verdict  of  the 
jury  appears  to  be  in  accord  both  with  the  strict  law  and  the  common 
justice  of  the  case,  and  it  should  not  be  set  aside  unless  the  court 
below  committed  some  error  which  was  obviously  calculated  to  bring 
about  a  result  which  would  not  otherwise  have  been  probable.    *    *    * 

Judgment  affirmed. 

KELLY  v.   PHELPS. 

_  (Supreme  Court  of  Wisconsin,  1SS3.     57  Wis.  42.5,  1.5  N.  W.  385.) 

Action  by  an  agent  for  commissions  on  sales  of  wood  for  the  prin- 
cipal. The  first  commission  to  the  agent  was  modified  by  later  let- 
ters, and  defendant  testified  that  on  March  31st  he  revoked  the  au- 
thority. This  plaintiff  denies.  On  April  11th  he  made  a  written  con- 
tract for  the  sale  of  the  last  of  the  wood. 

Lyon,  J.  The  authority  to  the  plaintiff  to  sell  the  defendant's 
wood  is  found  in  the  letter  of  the  defendant  of  February  13th,  the 
price  being  modified  by  the  letter  of  March  2d.  The  testimony  tends 
to  show  that  plaintiff  made  contracts  for  the  sale  of  500  cords  before 
any  further  modification  of  plaintiff's  authority  was  attempted.  It  is 
contended  on  behalf  of  the  defendant  that  the  letter  of  March  26th 
required  the  plaintiff  to  sell  all  of  the  wood  in  one  lot,  and  conse- 
quently deprived  him  of  authority  to  dispose  of  the  same  in  parcels. 
If  that  is  so,  it  could  have  no  effect  upon  sales  made  before  that  let- 
ter was  received.  The  previous  letters,  under  which  it  is  claimed  that 
the  500  cords  were  sold  to  Case  &  Co.  and  Billings,  contained  no  such 
restriction  upon  the  power  of  the  plaintiff,  and  if  he  made  those  sales, 
as  he  claims,  he  is  entitled  to  his  commission  thereon.     But  we  do  not 


Ch.  5)  TERMINATION    OF    THE    RELATION  250 

think  the  letter  of  March  26th  admits  of  the  construction  contended 
for.  \\'e  think  the  fair  and  reasonable  construction  of  it  is  that  the 
dry  and  green  wood  should  be  sold  together  in  such  proportions  that 
the  whole  of  the  wood  should  be  sold  at  the  specified  prices.  The  dry 
wood  being  the  most  valuable  and  finding  a  readier  sale,  would,  if 
sold  with  it,  facilitate  the  sale  of  the  green  wood.  This,  we  think,  is 
the  plain  and  obvious  meaning  of  the  letter  of  ]\larch  26th. 

If  the  plaintiff  produced  customers  ready  and  willing  to  purchase 
the  wood  at  the  specified  prices  before  revocation  of  his  authority,  he 
is  entitled  to  his  commissions  on  the  amount  those  customers  would 
have  taken,  although  the  defendant  refused  to  deliver  the  wood.  To 
entitle  him  to  his  commission  we  do  not  think  it  essential  that  the 
plaintiff  should  have  entered  into  written  contracts  for  the  defendant 
with  such  customers  in  order  to  bind  them  under  the  statute  of  frauds. 
It  is  sufficient  if  the  customers  were  ready  and  willing  to  perform  their 
verbal  contract  with  the  plaintiff  to  purchase  the  wood.  It  was  sub- 
stantially so  held  in  the  late  case  of  O'Connor  v.  Semple,  57  Wis. 
243,  15  N.  W.  136. 

Thus  far  our  views  seem  to  accord  with  those  of  the  learned  circuit 
judge,  expressed  in  his  instructions  to  the  jury.  But  he  gave  one  in- 
struction which  we  think  erroneous.  It  is  in  these  words:  "If  the 
defendant  revoked  the  agency  of  the  plaintiff,  and  the  plaintiff,  not- 
withstanding such  revocation,  went  on  and  completed  the  sale  of  the 
wood,  and  immediately  thereafter  notified  the  defendant  thereof,  the 
defendant  was  bound  to  give  the  plaintiff  notice  of  his  dissent  within 
a  reasonable  time  thereafter;  otherwise  he  must  be  held  to  have  ac- 
quiesced in  and  ratified  the  acts  of  the  plaintiff,  and  will  be  liable  for 
his  commissions.  Such  dissent  on  the  part  of  the  defendant  must 
have  been  clear  and  positive."  This  instruction  applies  the  rule  of 
law  which  binds  the  principal,  in  certain  cases,  to  a  third  person  for 
the  acts  of  a  former  agent,  whose  agency  has  been  revoked,  to  a  con- 
troversy between  the  principal  and  such  former  agent. ^^  If,  after 
revocation,  the  former  agent  enter  into  a  contract  for  the  principal, 
within  the  scope  of  his  original  authority,  with  one  who  had  dealt  with 
the  agent  as  such  before  the  revocation,  and  who  makes  the  contract 
in  good  faith,  without  notice  of  the  revocation,  the  principal  will  be 
bound  to  such  third  party,  or  at  least  he  will  be  bound  unless  he 
promptly  repudiates  the  act  of  his  former  agent.  The  rule  rests  en- 
s' In  JdiK'S  V.  Ilodukins,  (Jl  Me.  4st  (ISTL'),  Story  on  Af,M^iicy,  §  470,  is 
quoted  to  tlif  cfTcft  tliat  as  to  tlic  a;,'fiit  flic  rcvoratloii  takes  ('(Tect  I'lom  tlic 
time  wlicii  it  is  made  known  to  iiini:  as  to  lliird  persons  wlien  it  is  made 
known  (i>  tliein.  If  known  to  tiie  a;;<'nl.  as  a;:ainst  Ins  piinciiial  liis  riu'lit^- 
are  k""*'.  tiiouKli  lie  may  still  as  to  third  persons  who  an-  i;:norant  of  tlu' 
revocation  hind  lioth  himself  nnd  his  ]irineipal.  Tliis  statement  is  approved 
In  Capen  v.  Taeilic  Mntual  Ins.  Co.,  'JH  N.  J.  Law.  <!7,  «i4  Am.  Dee.  411.' 
^1H^^^^),  an<l  Lamothe  v.  St.  Louis  Marine  Hy.  &  I  >oek  Co.,  17  Mo.  l.'()4  <1S.V_'). 
The  revocatifui  is  operative  from  tlie  time  wl:en  if  I  oeonies  known  to  the 
HRent;  If  notice  Is  sent  hy  m.-iil,  not  from  the  time  of  the  dispat<h  of  the  let- 
ter, i)ut  frrun  its  receipt  Ity  the  a^ent.    Holiertson  v.  f'loud.  47  Miss.  20S  (is7'ji. 


L't>0  THE  nin^ATioN  (Pari  1 

tircly  upon  the  good  faith  of  the  person  so  dcalhig  with  the  former 
agent,  and  holds  the  principal  to  liability  or  to  the  duty  of  prompt 
action,  because  he  had  given  credit  to  his  agent  by  appointing  him,  and 
thus  put  it  in  the  power  of  the  latter  to  commit  the  fraud. 

But  when  it  comes  to  a  transaction  between  the  principal  and  the 
former  agent,  the  reason  of  the  rule  utterly  fails,  and  the  rule  has 
no  application.  Should  a  stranger,  without  authority,  assume  to  act 
as  the  agent  of  another,  it  would  be  intolerable  if  such  other  would 
be  bound  to  compensate  the  interloper  for  his  services  unless  he  gave 
the  latter  "notice  of  his  dissent  within  a  reasonable  time  thereafter." 
The  law  imposes  no  such  obligation  upon  business  men  in  respect  to 
those  who,  without  authority,  interfere  in  their  affairs.  If  the  de- 
fendant revoke  the  authority  of  the  plaintiff  to  sell  wood  for  him,  such 
revocation  was  a  perpetual  notice  to  the  plaintiff  that  he  dissented 
from  each  and  every  act  of  assumed  agency,  and  as  to  him  no  other 
notice  of  dissent  is  required.  The  jury  may  have  found  the  revoca- 
tion, and  still,  under  the  instruction,  the  plaintiff  would  be  entitled 
to  recover  commissions  on  the  wood  thereafter  sold,  because  the  de- 
fendant did  not  dissent  when  notified  of  the  sale.    This  is  error. 

We  think  the  record  discloses  another  error,  also  fatal  to  the  judg- 
ment. The  plaintiff  testified  to  an  express  contract  that  his  commis- 
sion on  sales  should  be  5  per  cent.  This  was  substantially  denied  by 
the  defendant.  If  the  jury  believed  the  testimony  of  defendant,  the 
recovery  would  be  quantum  meruit.  In  this  aspect  of  the  case  the  de- 
fendant offered  competent  testimony  of  the  customary  commissions  in 
procuring  sales  of  wood.  The  testimony  was  rejected.  It  should  have 
been  admitted,  to  enable  the  jury  to  determine  the  amount  of  the 
recovery  in  case  they  found  there  was  no  express  agreement  as  to 
commissions. 

Other  errors  are  assigned  and  have  been  argued  by  the  respective 
counsel.  It  is  not  deemed  necessary  to  consider  them.  The  judgment 
of  the  circuit  court  is  reversed,  and  the  cause  will  be  remanded  for 
a  new  trial. 


III.  Abandonment  by  the  Agent 
(A)  Power  to  Renounce 
ELSEE  V.  GATWARD. 

(Court  of  King's  Bench,  1793.     5  Term  R.  14.3,  101  Eng.  Repr.  82.) 

This  was  an  action  upon  the  case.  The  first  count  in  the  declaration 
stated  that  the  plaintiffs  on  the  29th  of  August  1791  were  about  to 
build  a  warehouse  &c.  and  to  rebuild  and  repair  certain  parts  of  a 
dwelling  house  and  stables  &c.  and  were  desirous  of  having  the  ware- 
house completely  tiled  and  covered  in,  and  the  front  of  the  dwelling 


Ch.  5)  TERMINATION    OF    THE    RELATION  261 

house  rebuilt,  on  or  before  the  first  of  November  then  next,  and  also 
of  having  the  bricklayers'  and  carpenters'  works  of  the  warehouse 
completely  finished  on  or  before  the  first  of  December,  and  the  whole 
of  the  remaining-  repairs  finished  on  or  before  the  25tli  December 
then  next,  and  thereupon  the  plaintiffs  on  the  29th  of  August  1791  at 
the  special  instance  and  request  of  the  defendant,  who  was  a  builder, 
and  had  full  notice  of  the  premises,  retained  and  employed  the  de- 
fendant to  do  and  perform  all  and  singular  the  bricklayers'  and  car- 
penters' works  which  should  be  requisite  on  the  occasion  aforesaid 
within  the  several  times  herein  before  mentioned  for  the  completion 
thereof  respectively ;  and  although  the  defendant  afterwards  accepted 
of  such  retainer  and  employment  upon  the  terms  aforesaid,  and  could 
and  ought  to  have  completed  all  such  bricklayers'  and  carpenters' 
works  within  the  said  respective  times,  yet  the  defendant  contriving  to 
injure  the  plaintiffs  &c.  did  not,  nor  would,  completely  tile  or  otherwise 
cover  in  the  said  warehouse  &c.  on  or  before  the  said  first  of  Novem- 
ber, nor  did  nor  would  finish  the  bricklayers'  and  carpenters'  works 
of  the  warehouse  on  or  before  the  said  1st  day  of  December,  and  the 
whole  of  the  remaining  repairs  on  or  before  the  said  25th  of  December 
&c.  but  on  the  contrary  permitted  the  said  warehouse  to  continue  un- 
tiled and  uncovered  &c.  in  consequence  of  which  said  neglect  of  the  de- 
fendant the  walls  of  the  said  premises  were  greatly  sapped  and  rotted, 
and  the  ceilings  damaged  and  spoiled,  and  the  plaintiffs  were  obliged  to 
continue  tenants  of  another  warehouse  and  stables  &c.  and  were  there- 
by put  to  additional  expence  &c.  The  second  count  stated  that  the 
plaintiffs  on  the  29th  of  August  1791,  being  possessed  of  divers  old 
materials  of  buildings,  retained  and  employed  the  defendant  at  his 
instance  and  request  to  do  and  perform  certain  bricklayers'  and  car- 
penters' works  upon  divers  buildings  and  premises  of  them  the  plain- 
tiffs, and  to  use  and  apply  in  and  about  those  works  all  such  parts  of 
the  old  materials  as  were  fit  and  proper  for  that  purpose,  and  that 
although  divers  parts  of  the  said  old  materials  were  fit  and  proper  to 
have  been  used  and  applied  in  and  about  the  said  works,  yet  the  de- 
fendant, contriving  to  injure  the  plaintiffs  in  this  behalf,  and  to  en- 
hance the  expence  of  the  bricklayers'  and  carpenters'  works,  did  not 
nor  would  use  and  apply  in  and  about  the  said  works  such  parts  of 
the  old  materials  as  were  fit  &c.  but  refused  so  to  do,  and  wrongfully 
and  injuriously  used  and  applied  in  and  about  the  same  works  other 
new  and  expensive  materials  in  the  stead  of  such  old  materials  as  were 
fit  and  proper  for  the  same  purposes;  whereby  the  i)laintiffs  were  put 
to  an  unnecessary  expence  &c.  and  the  old  materials  became  wholly 
useless  <S:c.  There  was  a  third  count  in  trover  for  the  old  materials. 
The  defendant  demurred  to  the  two  first  counts ;  alleging  for  causes 
that,  notwithstanding  the  whole  of  the  supposed  causes  of  action  in 
those  counts  were  in  the  nature  of  a  nonfeazance,  and  consisted  in  the 
non-performance  of  certain  matters  and  things  in  those  counts  men- 
tioned as  having  been  omitted  to  be  done  by  the  defendant,  it  was  not 


2<!2  TUK  KKi-Aii(»\  (Parti 

stated  in  cither  of  those  counts,  nor  ditl  it  ihorchy  n]>iH\-u-  that  the  de- 
fendant by  any  promise  undertakin};  contract  or  aj^rccnient  was  bound 
to  the  performance  of  those  several  matters  or  thin.y;s  t^c.  Tliat,  al- 
though the  several  supposed  causes  of  action  in  those  counts  were 
founded  upon  implied  contracts  in  law,  no  suflicient  ground  or  consid- 
eration to  raise  or  support  such  implied  contracts  was  stated.  That 
there  was  not  stated,  nor  did  it  appear,  in  those  counts  that  there  was 
any  promise  or  contract  on  the  part  of  the  defendant,  upon  which  the 
breaches  in  those  counts  could  operate.  And  that  those  counts  did  not 
contain  any  cause  of  action  against  the  defendant  &c.  The  parties 
went  to  trial,  when  a  verdict  was  given  for  the  defendant  on  the  count 
in  trover,  and  conditional  damages  assessed  for  the  plaintiffs  on  the 
two  counts  demurred  to. 

Lord  Kkxvox.  Ch.  J.  If  this  had  been  an  action  of  assumpsit,  it 
could  not  have  been  supported  for  want  of  a  consideration;  it  would 
have  been  nudum  pactum.  And  if  both  the  counts  be  not  good,  the 
defendant  is  entitled  to  judgment.  Now  1  do  not  think  that  the  first 
count  in  the  declaration  is  good  in  law.  It  states  that  the  defendant, 
who  is  a  carpenter,  was  retained  by  the  plaintiffs  to  build  and  to  re- 
pair certain  houses ;  but  it  is  not  stated  that  he  was  to  receive  any 
consideration,  or  that  he  entered  upon  his  work.  No  consideration  re- 
suits  from  his  situation  as  a  carpenter,  nor  from  the  undertaking :  nor 
is  he  bound  to  perform  all  the  work  that  is  tendered  to  him ;  and  there- 
fore the  amount  of  this  is,  that  the  defendant  has  merely  told  a  false- 
hood, and  has  not  performed  his  promise;  but  for  his  non-performance 
of  it  no  action  can  be  supported.  This  is  warranted  by  Lord  Holt's 
opinion  in  Coggs  v.  Bernard,  2  Ld.  Raym.  919,  where  recognizing  the 
case  in  11  H.  4,  33,  he  said — "There  the  action  was  brought  against  a 
carpenter,  for  that  he  had  undertaken  to  build  the  plaintiff  a  house  with- 
in such  a  time,  and  had  not  done  it,  and  it  was  adjudged  the  action 
v.-ould  not  lie."  And  on  this  opinion  I  think  I  may  safely  rely,  especial- 
ly as  the  justice  of  the  case  will  not  be  altered  by  the  form  of  the  ac- 
tion ;  for  if  assumpsit  will  not  lie  in  such  a  case,  there  is  no  technical 
reasoning  that  will  support  such  an  action  as  for  a  tort.  In  that  case 
Powell.  J.,  said — "An  action  will  not  lie  for  not  doing  the  thing  for  want 
of  a  sufficient  consideration ;  but  if  the  bailee  will  take  the  goods  into 
his  custody,  he  shall  be  answerable  for  them ;  for  the  taking  of  the  goods 
into  his  custody  is  his  own  act."  Lord  Holt  there  put  several  cases 
to  establish  this  position,  which  will  reconcile  the  cases  now  cited  on  the 
part  of  the  plaintiffs.  In  Brown  v.  Dixon,  1  T.  R.  274,  the  defendant 
had  received  the  dog  into  his  possession.  This  case  is  very  distinguish- 
able from  those  of  common  carriers  and  porters,  from  whose  situations 
certain  duties  result ;  they  are  bound  by  law  to  carry  goods  delivered 
to  them,  and  are  by  law  entitled  to  a  recompence;  but  no  such  duty 
results  from  the  situation  of  a  carpenter ;  he  is  not  bound,  as  such,  to 
perform  all  the  work  that  is  brought  to  him.  It  appears  to  me,  there- 
fore, that  the  first  count  cannot  be  supported,  there  bein'^^  no  consid- 


Ch.  5)  TERMINATION    OF    THE    RELATION  263 

eration  expressly  stated,  nor  any  consideration  resulting  from  the  de- 
fendant's employment  as  a  carpenter;  though,  had  the  defendant  per- 
formed the  work,  he  might  have  recovered  a  satisfaction  on  a  quantum 
meruit.  Upon  the  authority  of  Coggs  v.  Bernard,  and  the  cases  there 
noticed,  not  contradicted  by  any  other  decision,  I  think  that  the  first 
count  for  nonfeazance  is  bad,  but  that  the  second  count  may  be  sup- 
ported. It  is  there  stated  that  the  defendant  entered  upon  his  employ- 
ment, and  that  he  did  not  do  that  which  he  ought  to  have  performed 
according  to  his  retainer.  In  that  count  it  is  stated  that  he  under- 
took to  use  the  old  materials,  that  in  fact  he  did  not  use  those,  but  sub- 
stituted new  ones  in  their  stead,  thereby  enhancing  the  expence  to  the 
plaintiffs.  This  comes  within  the  case  mentioned  by  Lord  Holt  in 
Coggs  v.  Bernard,  speaking  of  the  same  case  in  the  year-books,  "but 
there  the  question  is  put  to  the  Court,  what  if  he  had  built  the  house 
unskillfully ;  and  it  was  agreed  in  that  case  an  action  would  have  lain :" 
for  though  the  defendant  could  not  have  been  compelled  to  build  this 
house,  and  to  use  the  old  materials,  yet  having  entered  upon  the  con- 
tract, he  was  bound  to  perform  it ;  and  not  having  performed  it  in  the 
manner  proposed,  an  action  lies  against  hini.^^ 


SECURITY  TRUST  &  LIFE  INS.  CO.  v.  ELLSWORTH. 

(Supreme  Court  of  Wisconsin,  190C.     120  Wis.  349,  109  N.   W.  125.) 

Action  to  foreclose  a  mortgage  given  to  secure  a  note,  made  as  part 
of  a  contract  between  plaintiff  company  and  defendant,  by  which  de- 
fendant became  the  general  agent  of  plaintiff  company.  The  note  was 
to  be  paid  out  of  commissions  and  renewals  to  be  earned  by  the  agents, 
and  represented  money  advanced  to  the  agent  and  used  by  him  to 
build  up  the  business.  Not  being  successful  he  resigned,  and  this  suit 
is  now  brought  to  collect  the  note.  Judgment  for  plaintiff"  and  defend- 
ant appeals. 

Kkrwix,  J. ^2  [After  holding  that  the  agreement  was  that  the 
mortgage  debt  should  be  paid  out  of  renewals  only,  and  that  no  de- 
mand was  to  be  made  in  excess  of  renewals:]  *  *  *  2.  It  is  fur- 
ther contended  by  counsel  for  respondent  that  the  withdrawal  from  the 
agency  of  Henry  Ellsworth  and  his  son  put  it  out  of  their  power  to 
pay  the  debt  provided  in  the  contract,  hence  the  debt  became  payable 
in  the  usual  way.  This  involves  the  question  of  the  right  of  the  agent 
to  resign,  and  whether  or  not  if  such  right  existed  it  was  rcas()nal)ly 
exercised.  Iloth  contracts  of  agency  are  silent  as  to  the  time  they 
should  remain  in  force,  and  both  recognize  the  right  of  resignation  by 
provifling,  "in  case  of  the  resignation  or  removal  of  the  said  agents, 
the  said  company  may,  and  it  is  hereby  authorized  and  empowered  to 

32  The  ojiinlons  of  Aslilnirst  iind   rirose,  J.I.,  are  oniittccL 
a*!  I'art  of  flic  ojiinion   i-^  o-nitlcfl. 


'2C>4:  TiiK  iiKi.ATioN  (Parti 

pav  such  subordinate  nj^ents  any  commissions  or  other  rcnumcralion 
wliich  said  agents  shall  have  agreed  to  pay  such  subordinate  agents 
and  to  otTset  against  all  claims  under  this  contract  such  commissions  or 
other  remuneration  so  paid."  The  general  rule  is  that  where  there  is 
no  express  or  implied  covenant  to  the  contrary,  the  agent  may  resign 
at  any  tinie.^*    Mecheni  on  Agency,  §  233. 

3*  In  Duffield  v.  Michaels  (C.  C.)  97  Fed.  S25  (1899)  Jackson,  J.,  summarized 
tlie  rule:  "It  is  a  well  settled  in-incii)le  of  law  that  au  agent  may  withdraw 
from  the  service  of  his  principal  at  his  pleasure,  though  he  might  be  liable 
in  some  instances  to  damages  for  the  violation  of  a  contract,  if  any  existed. 
Bish.  Cout.  par.  1050.  *  *  *  But  it  is  au  equally  well  settled  principle  of 
law  that  an  agent  may  on  account  of  the  principal's  wrongful  couduct  be 
justified  in  abandoning  his  contract  and  repudiating  the  agency."  Cody  v. 
Raynaud,  1  Colo.  2712  (1871) ;  Bishop  v.  Ranuey,  59  Vt.  31G,  7  Atl.  820  (1887) ; 
1  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  1110;  Newcomb  v.  Insurance  Co.  (C.  C.) 
r.l  Fed.  725  (1892).  _ 

In  U.  S.  V.  Jarvis,  2  Ware  (Dav.  274)  278,  Fed.  Cas.  No.  15,468  (1846),  Ware, 
District  Judge,  thus  puts  the  law:  "There  is  no  doubt,  as  a  general  rule, 
that  the  appointment  of  an  agent  may  at  any  time  be  revoked  by  the  prin- 
cipal without  giving  a  reason  for  it.  because  it  is  the  right  of  every  man  to 
employ  such  agents  as  he  sees  fit.  The  agent  also  has  the  same  general  right 
to  renounce  the  agency  at  his  own  will;  for  it  is  an  engagement  at  the  will 
of  both  parties.  But  the  contract  of  agency,  or  mandate,  involves  mutual 
oblisations  between  the  parties;  and  these  commence,  if  not  as  soon  as  the 
appointment  is  made,  at  least  as  soon  as  the  agent  or  mandatary  commences 
the  execution  of  the  agency.  If  he  has  entered  on  the  business,  even  if  he 
does  not  accomplish  prosperously  what  he  has  undertaken,  he  will  be  en- 
titled, from  his  principal,  to  an  indemnity  for  his  expenses  and  services,  if 
the  failure  does  not  arise  from  his  own  fault.  Dom.  Lois  Civiles,  liv.  1,  tit. 
15,  §  2,  Nos.  1,  2.  After  he  has  engaged  in  the  business  of  the  agency,  the 
principal  may  at  any  time  revoke  his  powers  and  dismiss  him  from  his  serv- 
ice. But  if  his  power  is  thus  revoked,  the  principal  will  bo  responsible  to 
him  for  any  engagements  he  may  have  entered  into,  and  any  lialnlities  he 
may  have  incurred  in  good  faith,  in  the  proper  business  of  the  agency,  before 
he  had  notice  of  the  revocation.  Id.  §  4,  No.  1.  And  so  the  agent,  after 
entering  on  the  business,  may  renounce  the  agency.  But  then  this  must  be 
done  in  good  faith,  and  be  preceded  by  reasonable  notice,  or  the  agent  will 
be  liable  to  the  principal  for  any  loss  that  may  result  to  him  from  this  cause. 
The  agent  cannot  withdraw  himself  from  his  engagement  wantonly,  and  with- 
out reasonable  cause,  without  rendering  himself  responsible  for  the  conse- 
quences. Id.  Nos.  3,  4;  Poth.  Mandat.  No.  44;  Dig.  17,  1,  22,  §  11,  Id.  1, 
27,  §  2.  And  when  a  man  has  undertaken  an  agency,  he  will  not  merely  ren- 
der himself  liable  for  damages  to  his  principal,  if  he  renounces  the  agency 
without  notice  and  without  just  cause,  but  a  court  of  equity  will  go  further. 
If  an  agent  is  employed  to  make  a  purchase,  and,  finding  the  speculation 
likely  to  prove  profitable,  he  renounces  the  agency  and  purchases  for  himself, 
equity  will  hold  him  a  trustee  for  the  principal,  and  give  him  the  benefit  of 
the  purchase  directly,  without  putting  him  to  an  action  for  damages.  1 
Story,  Eq.  Jur.  §  316.  It  may  be  true  that  in  our  jurisprudence  a  precise 
authority  may  not  be  found  for  all  these  propositions  among  the  adjudged 
eases.  But  they  rest  on  such  clear  grounds  of  justice  and  good  faith,  that 
they  may  be  well  taken  for  granted  without  the  authority  of  a  direct  de- 
cision (Slory,  Ag.  §  467),  and  they  all  stand  approved  by  the  authorities  of 
the  Roman  law.  They  all  fiow  from  a  great  principle  of  social  justice.  A 
man  cannot,  wantonly  and  without  reasonable  cause,  retract  or  annul  his 
own  acts  and  change  his  purpose,  when  others,  in  the  ordinary  course  of 
business  and  in  good  faith,  have  acquired  an  interest  in  them,  to  the  injury 
of  such  persons,  without  rendering  himself  liable  to  repair  such  injury.  The 
greatest  of  the  Roman  jurisconsults  reduced  the  rule  to  a  short  and  pithy 
maxim :  No  man  can  change  his  will  to  the  injury  of  another.  Dig.  .50,  17, 
75.    'Nemo  potest  mutari  consilium  suum  in  alterius  injuriam.'    It  is  applied 


Ch.  5)  TERMINATION   OF   THE    RELATION  265 

It  is  claimed,  however,  by  counsel  for  respondent  that  there  was  an 
implied  covenant  on  the  part  of  the  agents  that  they  should  not  resign, 
and  it  is  insisted  that  this  covenant  arises  not  only  out  of  the  fact  of 
the  existence  of  the  indebtedness  and  the  obligation  to  pay  it,  but  as 
well  out  of  the  agreement  on  the  part  of  the  debtor  implied  in  all  such 
cases  not  to  voluntarily  put  an  end  to  the  conditions  upon  which  his 
agreement  is  of  value  to  the  creditor.  This  branch  of  counsel's  con- 
tention, therefore,  rests  upon  the  assumption  of  implied  covenant. 
Conceding  for  the  sake  of  argument  that  the  law  would  impose  some 
obligation  upon  the  agents  not  to  unreasonably  abandon  their  imder- 
taking,  still  such  rule  must  have  a  reasonable  construction.  If  the  law 
implied  a  covenant  for  the  continuance  of  the  agency,  it  would  not 
extend  beyond  such  time  as  was  reasonably  necessary  to  make  an  effort 
to  successfully  accomplish  the  purpose  of  the  agency.  Clearly,  there 
was  no  implied  covenant  that  the  agency  should  be  continued  indefinite- 
ly when  the  continuance  of  it  proved  fruitless.  If  it  were  otherwise, 
the  agents  might  be  compelled  to  indefinitely  continue  the  agency  with- 
out profit  to  themselves  or  their  principal.     *     *     * 

Reversed  and  remanded. 


CANNON  COAL  CO.  v.  TAGGART. 
(Court  of  Appeals  of  Colorado,  1S91.     1  Colo.  App.  60.  27  Pac.  238.) 

Action  by  Taggart  for  $272.80,  loaned  the  company.  Defense  of 
denials,  and  counterclaim  for  damages  due  to  Taggart's  breach  of  the 
contract  to  sell  appellant's  coal.  Exceptions  to  instructions  of  the 
trial  court. 

in  some  cases  where  no  previous  engagements  exist  between  the  parties,  but 
its  application  is  peculiarly  stringent  when  mutual  obligations  by  contract  do 
exist.  'If  I  agree  with  a  mechanic,"  says  I'othier,  'to  build  me  a  house,  and 
after  the  agreement  I  change  mj'  purpose  and  determine  not  to  build,  I  may 
dissolve  the  engagement  by  giving  him  notice  of  the  change  of  my  will;  Imt 
if  before  the  notice  he  has  purchased  materi.ils  for  the  work  and  engaged  work- 
men, I  shall  be  bound  to  indemnify  him  for  the  loss  he  sustains  by  the  change 
of  my  jiurioso.'  Contrat  de  I.ouage,  No.  440;  19  Duvergier,  Droit  Civil 
Francais.  S  .'iiO.  If  this  was  a  case  between  two  private  persons,  the  case 
I)Ut  by  I'otliier  would  differ  in  no  essential  particulars  from  the  present. 
I'.oth  are  contracts  of  hiring;  for  the  contract  with  a  salaried  agent  or  manda- 
tary is  essentially  a  contract  of  hiring,  though  in  some  respects  distinguisha- 
ble from  the  common  contract  for  the  hire  of  lal'or.  Id.  tit.  8,  c.  3.  The 
defendant  was  a  salaried  agent,  and  he  had.  for  the  solo  purpose  of  the 
agency  and  for  the  sole  benelit  of  his  principal,  hired  an  ollice.  He  held,  as 
all  agents  do.  the  appointment  at  the  will  of  the  principal,  and  he  is  dis- 
missed witliout  notice,  while  under  this  liability  for  rent.  If  the  engage- 
ment of  his  oflice  was,  as  to  the  terms,  reasonable  and  proper  and  in  good 
faith,  under  the  circumstances,  the  justice  of  the  case  appears  to  me  so  clear, 
that  the  very  statement  <>t  the  facts  carries  with  it  the  answer,  and  that  con- 
forms to  the  well-established  [irincijiles  of  law." 

«ee.  also,  Hitchcock  v.  Kelley,  18  Ohio  Clr.  Ct.  R.  808,  at  page  813,  4  O. 
C.  D.  180. 


'2{'i(]  TiiK  KKi.AiioN  (Tart  1 

BlSSKi.T.,  T."  The  rii^ht  ct)nsliiKti()ii  of  the  CDulract  inU»  which 
the  parties  enteretl  will  iletermiiie  this  appeal.  The  interpreta- 
tions pnt  on  it  by  the  trial  conrt  led  to  the  giving  of  the  instruc- 
tions which  are  complained  of.  If  it  was  a  contract  for  the  sale 
of  persc>nal  property  not  in  existence  at  the  time  of  the  bargain, 
and  to  be  producctl  by  the  vendor,  it  would  be  necessary  to 
decide  whether  such  a  sale  carried  with  it  an  implied  warranty  that 
the  goods  sold  were  merchantable.  The  nisi  prius  court  so  regarded 
it,  and  told  the  jury  that  the  coal  must  be  of  a  merchantable  quality, 
and.  should  they  find  otherwise,  it  would  justify  the  defendant  in 
refusing  to  receive  the  coal  tendered.  The  matter  was  not  put  on  the 
basis  of  a  right  to  terminate  the  agency,  which  was  created  by  the 
agreement,  because  of  a  breach  of  its  terms  by  the  principal,  but  on 
the  theory  of  a  sale,  and  a  rejection  of  the  goods.  This  was  wholly 
unwarranted  by  the  legal  obligations  which  the  parties  were  under, 
and  bv  the  case  as  it  was  made,  and  it  must  have  misled  the  jury. 

In  no  sense  which  permits  the  application  of  that  rule  can  it  be  said 
that  the  contract  was  one  of  purchase  and  sale.  There  was  no  sale 
of  a  specific  quantity  of  coal,  or  of  the  output  of  the  mine.  Taggart 
was  not  bound  to  buy  a  ton  of  coal.  He  might  buy  a  thousand  tons 
a  month,  all  that  the  mine  produced,  or  none.  What  he  ordered  he 
was  bound  to  receive,  and  pay  for  at  the  price  agreed  on.  In  some 
respects,  chiefly  relating  to  the  obligation  to  pay  for  what  he  might 
order,  it  was  like  a  contract  of  sale.  In  the  absence  of  an  obligation 
to  order,  take,  or  purchase  any  amount,  definite  or  indefinite,  it  lacked 
an  element  which  always  accompanies  a  contract  of  sale.  The  com- 
pany was  obliged  to  fill  any  orders  which  Taggart  might  send,  to  the 
extent  of  their  output,  at  so  much  per  ton.  The  correlative  promise 
by  Taggart  was  in  reality  the  assumption  of  an  agency  to  dispose, 
as  far  as  he  might  be  able,  of  what  the  company  might  produce.  The 
pith  of  the  agreement,  which  \vas  of  advantage  to  the  coal  company, 
was  the  contract  to  work  up  a  trade  for  their  coal,  which  Taggart 
assumed.  His  compensation  was  in  the  price  at  which  he  was  per- 
mitted to  buy.  Any  breach  of  this  agreement  by  Taggart  without  a 
legal  excuse  would  necessarily  subject  him  to  a  liability  enforceable 
by  action. 

The  time  specified  in  the  contract  for  the  duration  of  the  agency 
is  not  essential  to  the  liability.  As  a  general  thing,  an  agent  may  at 
any  time  renounce  his  employment,  but  he  must  do  it  in  good  faith, 
and  in  such  fashion  as  not  to  injure  his  principal.  When  once  he  has 
entered  on  his  employment,  he  may  not  renounce  it  without  reasonable 
cause;  and,  failing  in  this,  he  will  render  himself  liable  for  the  con- 
sequences. Story,  Ag.  §  478 ;  White  v.  Smith,  6  Lans.  5 ;  U.  S.  v. 
Jarvis,  2  Ware  (Dav.,  274)  278,  Fed.  Cas.  No.  15,468;  Elsee  v.  Gat- 
ward,  5  Term  R.  143.    When  the  agreement  is  that  he  shall  continue 

3  5  Part  of  the  opinion  is  omitted. 


Cb.  5)  TERMIXATION    OF    THE    RELATION  2G7 

for  a  definite  period,  and  he  commences  to  do  what  he  has  promised, 
a  fortiori  will  he  be  liable  to  respond  in  damages  if  he  break  his  en- 
gagement without  legal  excuse.     *     *     * 

Reversed.  ^  i 


y^L 


(B)  Remedies  for  Abandonment  by  the  Agent 
WM.  ROGERS  MFG.  CO.  v.  ROGERS. 

(Supreme  Court  of  Errors  of  Connecticut,   1890.     58  Conn.  356,  20  Atl.  467, 
7  L.  R.  A.  779,  IS  Am.   St.  Rep.  278.) 

Injunction  to  restrain  defendant  from  leaving  employment  of  plain- 
tiffs, or  engaging  in  other  business  in  violation  of  a  contract  to  act 
for  25  years  as  agent  and  manager  of  plaintiff's  business.  It  is  aver- 
red that  defendant  is  now,  after  14  years,  negotiating  with  other  per- 
sons, competitors  of  plaintiffs,  to  leave  the  employ  of  plaintiffs,  and 
to  give  to  these  rivals  his  services,  and  the  use  of  his  name  on  the 
stamp  of  silver  plated  ware  to  be  made  by  such  rivals. 

Andrews,  C.  J.  Contracts  for  personal  service  are  matters  for 
courts  of  law,  and  equity  will  not  undertake  a  specific  performance. 
2  Kent,  Comm.  258,  note  b ;  Hamblin  v.  Dinnef ord,  2  Edw.  Ch.  529 ; 
Sanquirico  v.  Benedetti,  1  Barb.  315;  Haight  v.  Badgeley,  15  Barb. 
499;  De  Rivafinoli  v.  Corsetti,  4  Paige,  264.  A  specific  performance 
in  such  cases  is  said  to  be  impossible  because  obedience  to  the  decree 
cannot  be  compelled  by  the  ordinary  processes  of  the  court. ^"^  Con- 
tracts for  personal  acts  have  been  regarded  as  the  most  familiar  illus- 
trations of  this  doctrine,  since  the  court  cannot  in  any  direct  manner 
compel  the  party  to  render  the  service.     The  courts  in  this  country 

36  Contracts  involving  tlie  perforuiance  of  a  continuous  and  protracted  se- 
ries of  acts,  or  of  acts  demanding  tlie  exercise  of  individual  skUl,  taste,  talent 
or  discretion,  are  of  necessity  incapable  of  judicial  supervision.  For  breach 
of  such  agreements  the  remedy  is  to  be  sought  in  an  action  at  law.  Thiebaud 
v.  Union  Furniture  Co.,  14:;  Ind.  .'540.  42  N.  E.  741  (1895);  Arthur  v.  Oakes, 
f«  Fed.  ;J1S,  11  C.  C.  A.  209,  25  L.  R.  A.  414  (1894).  To  enforce  a  contract 
for  personal  services  would  result  in  a  state  of  slavery.  In  re  Mary  (!lark, 
]  F.lackf.  122,  12  Am.  Dec.  2]:{  (isijl).  To  attiMiipt  to  enforce  a  contract  de- 
manding personal  conlidcnc'e  would  make  that  conlidence  impossible,  llourget 
V.  .Monroe,  S.'S  Mich.  ')*'>'.',.  25  N.  W.  514  (18S,")).  An  early  and  interesting  case 
in  this  country  is  De  Klvalinoli  v.  Corsetti,  4  I'aige,  Ch.  201,  25  Am.  I  >ec. 
5.'i2  (18.'{.'i),  in  which  Chancellor  Wolworth  has  humorously  set  forth  the  pow- 
erlessness  of  the  law  to  realize  the  old  adage  that  a  bird  that  can  sing  and 
will  not  must  be  made  to  sing.  1I(?  doubled  that  any  ollicer  of  the  court 
had  that  perfect  knowledge;  of  the  Italian  lang\iage,  or  (h.it  exquisite  sensi- 
bility in  the  a\irlcular  nerve,  reipiisile  to  enjoy  with  a  jirojier  zest  the  jie- 
(•uliar  beauties  of  the  Italian  opera.  He  also  doubled  the  elTect  of  coercion 
upon  defi-ndant's  singing  e^^pecially  in  the  livelier  airs,  though  ;idmit)irig  that 
fear  of  that  dismal  caue.  (be  debtor's  jirison.  wonid  deciicn  bis  seriousness  in 
the  graver  jiarts  of  the  dnima.  See.  also,  Ilamblin  v.  hinnel'ord.  2  i:dw.  Ch. 
.529  (1S.''.5».  In  Rofpieniore  v.  Mltcliell,  107  Ala.  475,  ,52  South.  42.'!,  as  re- 
ported in  140  Am.  St.  Re|».  52  (19101,  \n  an  extended  note  ou  the  whole  sub- 


2GS  THE  RELATION  (Parti 

ami  in  England  formerly  luKl  that  tlioy  could  not  negatively  enforce 
the  specific  performance  of  sucli  contracts  by  means  of  an  injunction 
restraining  their  violation.  3  Wait.  Act.  &  Dcf.  754;  Marble  Co.  v. 
Ripley,  10  Wall.  340,  19  L.  Ed.  955 ;  Burton  v.  Marshall,  4  Gill,  487, 
45  Am.  Dec.  171 ;  De  Pol  v.  Solilkc,  30  N.  Y.  Super.  Ct.  280;  Kem- 
ble  V.  Kean,  6  Sim.  333 ;  Baldwin  v.  Society,  9  Sim.  393 ;  Fothergill 
V.  Rowland,  L.  R.  17  Eq.  132. 

The  courts  in  both  countries  have,  however,  receded  somewhat  from 
the  latter  conclusion,  and  it  is  now  held  that  where  a  contract  stipu- 
lates for  special,  unique,  or  extraordinary  personal  services  or  acts, 
or  where  the  services  to  be  rendered  are  purely  intellectual,  or  are 
peculiar  and  individual  in  their  character,  the  court  will  grant  an 
injunction  in  aid  of  a  specific  performance.  But  where  the  services 
are  material  or  mechanical,  or  are  not  peculiar  or  individual,  the 
party  will  be  left  to  his  action  for  damages.  The  reason  seems  to 
be  that  services  of  the  former  class  are  of  such  a  nature  as  to  pre- 
clude the  possibility  of  giving  the  injured  party  adequate  compensa- 
tion in  damages,  while  the  loss  of  services  of  the  latter  class  can  be 
adequately  compensated  by  an  action  for  damages.  2  Story,  Eq.  Jur. 
§  958a;  3  Wait,  Act.  &  Def.  754;  3  Pom.  Eq.  Jur.  §  1343;  Cali- 
fornia Bank  v.  Fresno  Canal,  etc.,  Co.,  53  Cal.  201 ;  Singer  Sewing 
Machine  Co.  v.  Union  Button  Hole  Co.,  Holmes,  253,  Fed.  Cas.  No. 
12,904;  Lumley  v.  Wagner,  1  De  Gex,  M.  &  G.  604;  Railroad  Co. 
V.  Wythes,  5  De  Gex,  M.  &  G.  880;  Montague  v.  Flockton,  L.  R. 
16  Eq.  189. 

The  contract  between  the  defendant  and  the  plaintiffs  is  made  a 
part  of  the  complaint.  The  services  which  the  defendant  was  to  per- 
form for  the  plaintiffs  are  not  specified  therein,  otherwise  than  that 
they  were  to  be  such  as  should  be  devolved  upon  him  by  the  general 
manager;  "it  being  understood  that  such  duties  may  include  travehng 
for  said  companies  whenever,  in  the  judgment  of  said  general  agent, 
the  interests  of  the  business  will  be  thereby  promoted;"  and  also 
"including  such  duties  as  traveling  for  said  companies  as  said  general 
agent  may  devolve  upon  him,  including  also  any  duties  as  secretary 
or  other  officer  of  either  or  both  of  said  companies  as  said  companies 
may  desire  to  have  him  perform."  These  services,  while  they  may 
not  be  material  and  mechanical,  are  certainly  not  purely  intellectual, 
nor  are  they  special,  or  unique,  or  extraordinary;  nor  are  they  so 
peculiar  or  individual  that  they  could  not  be  performed  by  any  person 
of  ordinary  intelligence  and  fair  learning.  If  this  was  all  there  was 
in  the  contract  it  would  be  almost  too  plain  for  argument  that  the 
plaintiffs  should  not  have  an  injunction. 

The  plaintiffs,  however,  insist  that  the  negative  part  of  the  con- 
tract, by  which  the  defendant  stipulated  and  agreed  that  he  would  not 
be  engaged  in  or  allow  his  name  to  be  employed  in  any  manner  in  any 
other  hardware,  cutlery,  flatware  or  hollow-ware  business,  either  as 
a  manufacturer  or  seller,  fully  entitles  them  to  an  injunction  against 


Ch.  5)  TERMINATION    OF    THE    RELATION  269 

its  violation.  They  aver  in  the  complaint,  on  information  and  belief, 
that  the  defendant  is  planning  with  certain  of  their  competitors  to 
engage  with  them  in  business,  with  the  intent  and  purpose  of  allowing 
his  name  to  be  used  or  employed  in  connection  with  such  business 
as  a  stamp  on  the  ware  manufactured ;  and  they  say  such  use  would 
do  them  great  and  irreparable  injury.  If  the  plaintiffs  owned  the 
name  of  the  defendant  as  a  trade-mark,  they  could  have  no  difficulty 
in  protecting  their  ownership;  but  they  make  no  such  claim,  and  all 
arguments  or  analogies  drawn  from  the  law  of  trade-marks  may  be 
laid  wholly  out  of  the  case. 

There  is  no  averment  in  the  complaint  that  the  plaintiffs  are  enti- 
tled to  use,  or  that  in  fact  they  do  use,  the  name  of  the  defendant  as 
a  stamp  on  the  goods  of  their  own  manufacture,  nor  any  averment 
that  such  use,  if  it  exists,  is  of  any  value  to  them.  So  far  as  the  court 
is  informed,  the  defendant's  name  on  such  goods  as  the  plaintiffs 
manufacture  is  of  no  more  value  than  the  names  of  Smith  or  Stiles 
or  John  Doe.  There  is  nothing  from  which  the  court  can  see  that 
the  use  of  the  defendant's  name  by  the  plaintiffs  is  of  any  value  to 
them,  or  that  its  use  as  a  stamp  by  their  competitors  would  do  them 
any  injury  other  than  such  as  might  grow  out  of  a  lawful  business 
rivalry.  If  by  reason  of  extraneous  facts  the  name  of  the  defendant 
does  have  some  special  and  peculiar  value  as  a  stamp  on  their  goods, 
or  its  use  as  a  stamp  on  goods  manufactured  by  their  rivals  would 
do  them  some  special  injury,  such  facts  ought  to  have  been  set  out 
so  that  the  court  might  pass  upon  them.  In  the  absence  of  any  alle- 
gation of  such  facts  we  must  assume  that  none  exist. 

The  plaintiffs  also  aver  that  the  defendant  intends  to  make  known 
to  their  rivals  the  knowledge  of  their  business,  of  their  customers,  etc.. 
which  he  has  obtained  while,  in  their  employ.  But  here  they  have  not 
shown  facts  which  bring  the  case  within  any  rule  that  would  require 
an  employe  to  be  enjoined  from  disclosing  business  secrets  which  he 
has  learned  in  the  course  of  his  employment,  and  which  he  has  con- 
tracted not  to  divulge.  Peabody  v.  Norfolk,  98  Mass.  452,  96  Am. 
Dec.  664. 

There  is  no  error  in  the  judgment  of  the  superior  court.  The  other 
judges  concurred. 


,X^ 


HARLOW  V.  OREGONIAN  PUB.  CO. 
(Supreme  Court  of  Oregon,  1904.     45  Or.  IjL'O,  78  Tac.  737.) 

Action  by  Harlow,  as  successor  to  the  rights  of  one  Southworth, 
by  injunction  to  restrain  defendants  from  refusing  to  carry  out  a 
contract,  making  Southworth  the  subscription  agent  in  certain  ter- 
ritory of  the  defendant's  paper.     Suit  dismissed. 

Br.AN,  J.  1.  Assuming,  for  the  purposes  of  the  opinion,  that  the 
plaintiffs  have  legally  succeeded  to  the  rights  of  Southworth  under  the 

t 


^■' 


JMAAlJut 


-70  Tin:  KKi.ATiON  (Parti 

original  contracl,  aiul  staiul  in  his  jihux'  aiul  slead,  ciililkHl  lo  all  the 
rii^hts  and  priviloi^^cs  given  him  by  its  terms,  and  that  it  embraces  all  the 
territory  claimed  by  them,  there  are  two  reasons  why  this  suit  could  not 
be  maintained  after  the  repudiation  of  the  entire  contract  by  the  de- 
fendants, and  the  service  on  the  jilaintift's  of  notice  to  that  elTect  in 
June.  1902:  I-'irst,  the  plaintitTs.  if  they  are  entitled  to  any  relief  at  all, 
have  a  full  and  comi)lete  remedy  at  law  ;  and,  second,  the  remedy  by  in- 
junction or  specific  performance  is  not  mutual.  It  could  not  be  invoked 
by  the  defendants  against  the  plaintiffs,  as  the  contract  is  not,  and  nev- 
er was,  capable  of  being  specifically  enforced  or  enjoined  at  the  suit  of 
IMttock  or  the  defcntlant  publishing  company.  The  contract  between 
Pittock  and  Southworth  created  substantially  the  relation  of  employer 
and  employe,  and  this  relation  continued  as  to  those  who  succeeded 
to  Southworth's  interest.  By  its  terms,  Southworth  (whom  we  shall 
hereafter  assume  includes  parties  who  have  legally  succeeded  to  his 
rights),  was  to  carry  and  deliver  the  paper  to  all  paying  subscribers 
within  the  designated  territory,  to  endeavor  to  increase  its  circula- 
tion, to  collect  subscriptions  therefor,  and  to  pay  weekly  for  all  papers 
he  took  from  the  office,  receiving  as  a  compensation  for  "his  labor" 
a  certain  proportion  of  the  subscription  price  of  the  paper.  This  re- 
lationship was  to  continue  until  one  party  or  the  other  considered  a 
"separation  necessary."  In  that  event,  if  the  parties  were  unable 
to  agree  upon  "a  proper  method  of  doing  so,"  each  was  to  appoint 
one  arbitrator,  who,  if  they  could  not  agree,  should  choose  another, 
whose  decision  should  be  final. 

There  may  be  room  for  controversy  as  to  the  intent  and  meaning 
of  the  arbitration  clause,  but  it  seems  to  us  that  it  was  intended,  in 
case  either  party  should  desire  to  terminate  the  contract,  to  provide 
a  simple  and  inexpensive  method  or  means  by  which  its  value  to  the 
other  could  be  determined,  and  the  amount  to  be  paid,  if  any,  by  the 
one  desiring  the  separation,  ascertained.  The  contract  was  undoubt- 
edly thought  to  be  advantageous  to  both  parties  at  the  time  it  was 
made.  Southworth  paid  $350  for  the  sole  right  to  carry  and  deliver 
the  papers,  and  to  receive  as  a  compensation  therefor  a  certain  por- 
tion of  the  subscription  price.  This  he  supposed  to  be  a  valuable 
right,  and  one  which  would  increase  largely  in  value,  according  to 
his  industry  and  diligence  in  extending  the  circulation  of  the  paper, 
and  the  character  of  the  services  which  he  should  render  to  its  pa- 
trons. Pittock,  on  the  other  hand,  was  contracting  for  the  future 
circulation  of  his  paper,  and  the  collection  of  sul)scriptions  therefor 
in  the  given  territory,  and  this  he  undoubtedly  believed  to  be  of  value 
to  the  paper.  It  was  to  protect  these  rights,  and  to  prevent  the  ter- 
mination of  the  contract  by  either  without  making  compensation  to 
the  other,  that  the  arbitration  clause  was  inserted.  This,  it  appears 
to  us,  is  its  true  intent  and  meaning. 

We  cannot  think,  however,  that  the  agreement  contemplated  that 


Ch.  5)  TERMINATION    OF    THE    RELATION  271 

the  personal  relationship  between  the  parties  should  necessarily  con- 
tinue, against  the  will  of  either,  until  the  amount  of  compensation 
should  be  ascertained  in  the  manner  therein  provided.  Either  party 
could  terminate  the  contract  when  he  considered  it  necessary,  but,  if 
the  parties  were  unable  to  agree  as  to  the  amount  of  compensation 
to  be  paid  by  one  to  the  other  on  account  of  such  separation,  they 
were  to  submit  that  matter  to  arbitration,  but  not  the  right  to  ter- 
minate the  contract.  The  provision  as  to  the  duration  of  the  con- 
tract, and  the  method  to  be  employed  in  separation,  or  for  determin- 
ing the  value  in  case  separation  should  be  deemed  necessary,  did  not 
prevent  either  party  from  dissolving  the  relation  between  them  at  any 
time,  subject  to  liability  to  the  other  for  such  damages  as  he  may 
have  sustained  if  it  was  not  done  in  the  manner  provided.  The  con- 
tract created  such  a  relationship  of  trust  and  confidence  between  the 
parties  that  a  court  of  equity  will  not  compel  a  continuation  thereof 
against  the  will  of  either,  but  will  leave  the  injured  party  to  his  relief 
at  law.  The  contract,  by  its  terms,  was  subject  to  termination  at  any 
time ;  the  party  desiring  the  termination,  however,  to  pay  its  value  to 
the  other.  If  the  termination  or  separation  took  place  in  the  manner 
provided,  the  value  or  amount  to  be  paid  would  be  ascertained  and 
determined  by  arbitrators.  If  not,  the  party  guilty  of  the  breach 
would  be  liable  in  an  action  at  law  for  damages,  the  same  as  for 
the  breach  of  any  other  contract. 

2.  It  follows,  therefore,  that  whether  the  action  of  the  defendant  cor- 
poration in  repudiating  the  contract  and  notifying  the  plaintiffs  that 
it  would  no  longer  be  bound  thereby  be  deemed  a  separation  within 
its  terms,  or  a  breach  thereof,  the  effect  was  to  terminate  the  con- 
tract ;  and  the  only  question  between  the  parties  remaining  for  ad- 
justment is  the  amount,  if  any,  to  be  paid  by  the  defendants  to  the 
plaintiffs  on  account  of  such  separation  or  breach.  That  question 
is  not  cognizable  by  a  court  of  equity.  An  injunction  to  restrain  the 
breach  of  a  personal  contract,  or  one  relating  to  personal  property, 
or  a  mandatory  injunction  to  compel  specific  performance  of  such  a 
contract,  will  not  be  granted  when  the  recovery  of  damages  at  law 
would  adequately  redress  the  impending  injury.  Chicago  &  A.  R. 
Co.  v.  New  York,  Lake  Erie  &  W.  R.  Co.  (C.  C.)  24  Fed.  516; 
Richmond  v.  Dubuque  &  Si(3ux  City  R,  Co.,  33  Iowa,  423 ;  Port 
Clinton  R.  Co.  v.  Cleveland  &  Toledo  R.  Co.,  13  Ohio  St.  545 ;  26 
Am.  &  I'2ng.  Enc.  Law  (2d  Ed.)  17.  Indeed,  the  basis  of  equitable 
interference  in  cases  of  s])ecific  performance  is  a  want  of  an  adequate 
remedy  at  law.  Mr.  Waterman  says:  "A  court  of  equity  will  not 
grant  relief  where  the  complaining  party  will  not  be  deprived  of  any 
legal  right  by  withholding  it,  unless  he  can  show  clearly  that  he  is 
entitled  to  the  relief  sought.  If  the  plaintiff  has  an  a(le(|uate  remedy 
.'It  law,  he  must  seek  his  redress  there."  Waterman,  v^pec.  Per.  §  9. 
The  same  rule  is  laid  flown  by  Judge  Story,  Mr.  I*Vv.  and  Mr.  Pome- 


•_»7J  THE  UKLATION  (Parti 

rov.     1  Storv,  Equity  (lOtli  lul.)  §  716;  Fry,  Spec.  Per.  §  12;  Pome- 
roy,  Spec.  Per.  (2d  Ed.)  §  24. 

It  is  admitted,  as  we  uiulorstaml  it,  that  a  court  of  cijuity  will  not 
decree  a  specific  performance  of  the  contract  in  suit  because  it  re- 
quires varied  and  continuous  acts  on  the  part  of  the  defendants,  but  it 
is  argued  that  it  will  enjoin  the  defendants  from  violatino;  the  contract 
by  delivering  papers,  or  causing  them  to  be  sold  and  delivered,  with- 
in the  territory  embraced  in  plaintiffs'  contract,  until  such  time  as  the 
defendants  take  the  proper  steps  provided  in  the  contract  for  its 
termination.  Although  the  remedy  suggested  is  negative  rather 
than  aftirmative,  it  is,  in  etifect,  a  decree  for  the  performance  of  the 
contract.  Enjoining  the  defendants  from  delivering  papers  or  caus- 
ing them  to  be  sold  and  delivered  in  the  disputed  territory  would 
practically  enforce  the  contract,  and  require  them  to  furnish  the 
papers  to  the  plaintififs  to  be  so  delivered.  A  prohibition  preventing 
a  violation  of  the  contract  by  the  defendants  would  in  this  case  as 
effectually  compel  its  performance  as  an  affirmative  order  to  that 
effect. 

The  leading  case  holding  that,  although  a  court  of  equity  cannot 
compel  the  specific  performance  of  a  personal  service  contract,  it 
may  enjoin  a  violation  of  the  negative  provisions  thereof,  is  that  of 
Lumley  v.  Wagner,  1  De  Gex,  M.  &  G.  604.  In  that  case  the  defend- 
ant had  agreed  with  plaintifif  to  sing  at  his  theater  for  a  definite  time, 
and  not  to  sing  elsewhere.  She  threatened  to  sing  at  another  theater 
in  violation  of  her  contract.  In  a  suit  to  enjoin  her  from  so  doing, 
the  court  held  that  it  could  not  enforce  the  affirmative  part  of  the 
contract,  because  it  could  not  compel  the  defendant  to  sing,  but  it 
could  and  would  enjoin  and  restrain  her  from  singing  elsewhere. 
In  this  case  the  contract  was  for  a  definite,  fixed  time,  and  plaintiff's 
remedy  at  law  was  manifestly  inadequate,  because  the  damages  which 
would  accrue  to  him  by  a  violation  of  the  contract  by  the  defendant 
could  not  be  ascertained  with  any  certainty.  The  same  is  true  of 
Singer  Sewing  Machine  Co.  v.  Union  Buttonhole  Co.,  Holmes,  253, 
Fed.  Cas.  No.  12,904;  Standard  Fashion  Co.  v.  Siegel-Cooper  Co., 
157  N.  Y.  60,  51  N.  E.  408,  43  L.  R.  A.  854,  68  Am.  St.  Rep.  749; 
Burlin.gton  v.  Burlington  Water  Co.,  86  Iowa,  266,  53  N.  W.  246; 
and  other  cases  cited  by  the  plaintiffs. 

■  4.  We  are  therefore  of  the  opinion  that  plaintiffs  cannot  maintain  this 
suit,  for  the  reasons  stated.  There  is,  however,  another  objection  to 
the  enforcement  of  the  contract  in  equity  at  the  suit  of  the  plaintiffs, 
and  that  is  because  the  remedy  is  not  mutual,  and  defendants  could 
not  compel  the  plaintiffs  to  perform.^''     It  is  a  fundamental  rule  of 

3  7  That  the  remedy  must  be  mutual  is  held  in  Stanton  v.  Singleton,  126  Cal. 
657,  59  Pac.  146,  47  L.  R.  A.  334  (1899),  citing  many  cases;  Cort  v.  Las- 
sard,  IS  Or.  221,  22  Pac.  1054,  6  L.  R.  A.  653,  17  Am.  St.  Rep.  726  (1889). 
That  injunction  is  negative  specific  performance  is  held  in  "SVelty  v.  Jacol  s, 
171  111.  624,  49  N.  E.  72.3,  40  L.  R.  A.  98  (1898),  quoting  Pomeroy,  Eq.  Jurisp. 


Ch.  5)  TERMINATION    OF    THE    RELATION  273 

equity  that  when,  from  the  nature  of  the  contract,  it  is  incapable  of 
being  enforced  against  one  party,  that  party  is  rendered  equally  in- 
capable of  enforcing  it  against  the  other,  though  its  execution  in  the 
latter  way  might  in  itself  be  free  from  the  difficulty  attending  its  ex- 
ecution in  the  former.  Unless  a  court  of  equity  can  execute  the  con- 
tract on  both  sides,  it  will  generally  not  interpose  in  behalf  of  either 
party.  To  compel  one  to  perform  specifically,  and  send  the  other  to 
a  court  of  law  to  recover  damages,  would  be  in  violation  of  the  es- 
tablished principles  of  equity.  Pomeroy,  Spec.  Per.  (2d  Ed.)  §  165 ; 
Fry,  Spec.  Per.  §  286 ;  Waterman,  Spec.  Per.  §  198 ;  Marble  Co.  v. 
Ripley,  10  Wall.  339,  19  L.  Ed.  955 ;  Richmond  v.  Dubuque  &  Sioux 
Citv  R.  Co.,  33  Iowa,  423 ;  Tyson  v.  Watts,  1  Md.  Ch.  13 ;  Hoover 
V.  Calhoun,  16  Grat.  109 ;  Shenandoah  Valley  R.  Co.  v.  Dunlop,  86 
Va.  346,  10  S.  E.  239 ;  26  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  28. 

Now,  as  we  have  already  stated,  among  the  stipulations  in  the 
contract  for  performance  by  Southworth  are  that  he  shall  carry  the 
paper  faithfully  and  carefully  to  every  paying  subscriber  in  the  dis- 
trict; that  he  will  endeavor  on  all  occasions  to  increase  the  circula- 
tion, and  will  procure  as  much  advertising  patronage  as  possible ; 
that  he  will  be  responsible  and  pay  weekly  for  all  papers  taken  from- 
the  office;  and  that  he  will  comply  with  all  rules  and  regulations 
that  the  proprietor  of  the  paper  may  see  fit  to  adopt  from  time  to 
time,  not  inconsistent  with  his  contract.  These  provisions  call  for  the 
performance  of  varied  and  continuous  acts  on  the  part  of  South- 
worth,  requiring  skill,  energy,  experience,  judgment,  and  integrity. 
It  will  not  be  contended,  we  think,  that  a  court  of  equity  can  or  will 
decree  the  specific  performance  of  such  a  contract,  because  the  en- 
forcement of  its  decree  would  require  such  constant  superintendence 
as  to  make  judicial  control  a  matter  of  extreme  difficulty,  if  not  an 
impossibility.     See  authorities  last  cited. 

For  these  reasons,  the  decree  of  the  court  below  should  be  af- 
firmed, and  it  is  so  ordered. 

S  1341.  That  may  be  the  effect,  hut  not  of  necessity.  Injunction  may  merely 
Iirevent  a  wron^  not  cai)ahle  of  otlier  adfHinate  remedy,  witliout  resultinj;  in 
perlonnance  of  the  contract,  and  so  be  Justified  even  when  the  courts  could 
not  spcfifically  enforce  the  a^^'ncy.  Standard  Fashion  Co.  v.  Siesel-Cooper 
Co.,  liL'  Misc.  Rep.  024,  r,0  N.  Y.  Snpi».  \07>i\  (1!^08),  which  held  this  was  not 
a  prr»iier  case  for  injunction,  and  was  on  this  point  overruled  in  ir>7  N. 
Y.  m.  ."jT  N.  E.  40.S,  08  Am.  St.  I{cp.  7'.;!  (1S0S).  4.'{  L.  R.  A.  sr,\,  with  mono- 
prajdiic  note.  This  is  es[»ociMlly  aiiplic-ible  when  one  jiarty  has  already  jter- 
fnrmed.  The  remedy  will  then  no  lontrer  lack  mutuality.  Sin;ier  Sewiufr  Ma- 
ehine  Co.  V.  Union  RuttoiilioJe  Co.,  Holmes,  25.3,  Fed.  Cas.  No.  12,0<U  (IST.'J),  a 
leading  case.  As  to  injunction  to  restrain  an  afjent  who  has  siynod  a  con- 
tract that  Id.s  services  are  unique,  .see  Kupfersmith  v.  Hopper,  122  App.  Dlv. 
:'.],  lOr,  N.  Y.  Suiip.  707  fin07);  TesUe  v.  Dittlieruer,  70  Neb.  r)44,  98  N.  W. 
r»7,  11.3  Am.  St.  Rep.  802  (1003):  Id..  0.^.  Neb.  107,  01  N.  W.  181,  101  Am. 
St.  T{ep.  014  (UK)2i;  Daly  v.  Smitii,  40  IIow.  True.  50  (1874),  containing  an 
elaborate  review  of  the  authorities. 
GoDD.rR.&  A.— 18 


274  Tin:  uki^ation  (Parti 

SECTION  2.— BY  OPERATION  OF  LAW 
I.  In  Gknicrai, 


'AHERN  V.  BAKER. 

(Supreme  Court  of  Minnesota,  1885.    34  Minn.  98,  24  N.  W.  341.) 

Vanderburgh,  J.  The  defendant,  on  the  ninth  day  of  September, 
1884,  specially  authorized  one  Wheeler,  as  his  agent,  to  sell  the  real 
property  in  controversy,  and  to  execute  a  contract  for  the  sale  of  the 
same.  He  in  like  manner  on  the  same  day  empowered  one  Fairchild 
to  sell  the  same  land;  the  authority  of  the  agent  in  each  instance 
being  limited  to  the  particular  transaction  named.  On  the  same  day, 
Wheeler  effected  a  sale  of  the  land,  which  was  consummated  by  a 
conveyance.  Subsequently,  on  the  tenth  day  of  September,  Fairchild, 
as  agent  for  defendant,  and  having  no  notice  of  the  previous  sale 
made  by  Wheeler,  also  contracted  to  sell  the  same  land  to  this  plain- 
tiff, who,  upon  defendant's  refusal  to  perform  on  his  part,  brings 
this  action  for  damages  for  breach  of  the  contract. 

This  is  a  case  of  special  agency,  and  there  is  nothing  in  the  case  going 
to  show  that  the  plaintiff  (defendant?)  would  be  estopped  from  setting 
up  a  revocation  of  the  agency  prior  to  the  sale  by  Fairchild.  A  revoca- 
tion may  be  shown  by  the  death  of  the  principal,  the  destruction  of 
the  subject-matter,  or  the  determination  of  his  estate  by  a  sale,  as  well 
as  by  express  notice.  The  plaintiff  (defendant?)  had  a  right  to  employ 
several  agents,  and  the  act  of  one  in  making  a  sale  would  preclude 
the  others  without  any  notice,  unless  the  nature  of  his  contract  with 
them  required  it.  In  dealing  with  the  agent  the  plaintiff  took  the  risk 
of  the  revocation  of  his  agency.     1  Pars.  Cont.  *71. 

Order  affirmed,  and  case  remanded. 


II.  By  Death 

HUNT  V.  ROUSMANIER'S  ADM'RS. 

(Supreme  Court  of  the  United  States,  1823.    8  Wheat.  174,  5  L.  Ed.  589.) 

Bill  to  compel  defendants  to  join  in  the  sale  of  the  brig  Nereus 
and  the  schooner  Industry.  In  the  bill  Hunt  set  forth  that  Rous- 
manier  applied  to  him  for  a  loan  of  $1,450,  offering  as  security  a  bill 
of  sale,  or  a  mortgage  of  his  interest  in  the  brig  Nereus.  Counsel 
was  consulted,  and  he  advised  that  a  power  of  attorney  to  sell  the 


L  lA  S 


Ch.  5)  TERMINATION    OF    THE    RELATION  275 

ships  in  case  of  default  was  as  effectual  as,  and  simpler  than,  a  mort- 
gage, since  it  avoided  any  change  in  the  papers  of  the  vessels,  or 
need  to  take  possession  of  them  when  they  came  into  port.  The 
loan  was  made  and  such  a  power  of  attorney  was  made  out  to  Hunt. 
On  a  later  loan  of  $700,  a  similar  power  to  sell  the  Industry  was  ex- 
ecuted. Rousmanier  died  insolvent,  and  defendants  forbade  Hunt  to 
sell  the  vessels.  Defendant's  demurrer  being  sustained,  plaintiff  ap- 
peals. 

M.VRSHALL,  C_J.,  delivered  the  opinion  of  the  court.    The  counsel  -  ■^ 

for  the  appellant  objects  to  the  decree  of  the  circuit  court  on  two 
grounds.  He  contends,  1.  That  this  power  of  attorney  does,  by  its 
own  operation,  entitle  the  plaintiff,  for  the  satisfaction  of  his  debt,  to 
the  interest  of  Rousmanier  in  the  Xereus  and  the  Industry.  2.  Or,  if* 
this  be  not  so,  that  a  court  of  chancery  will,  the  conveyance  being  de- 
fective, lend  its  aid  to  carry  the  contract  into  execution,  according  to  \ 
the  intention  of  the  parties.^* 

1.  We  will  consider  the  effect  of  the  power  of  attorney.  This  in- 
strument contains  no  words  of  conveyance  or  of  assignment,  but  is  a 
simple  power  to  sell  and  convey.  As  the  power  of  oae  man  to  act  for 
another  depends  on  the  will  and  license  of  that  oth^,  the  power  ceas- 
es when  the  will,  or  this  permission,  is  withdrawn.  feThe  general  rule, 
therefore,  is,  that  a  letter  of  attorney  may,  at  any  tiVie.  be  revoked  by 
the  party  whoiiiakes  it ;  and  is  revoked  by  his  death. J  But  this  general 
rule,  which  rjtsults  from  the  nature  of  the  act,  h^  sustained  some 
modification.  n\'here  a  letter  of  attorney  forms  ypzvt  of  a  contract, 
and  is  a  securUy  for  money,  or  for  the  performance  of  any  act  which 
is  deemed  valuable,  it  is  generally  made  irrevocable,  in  terms,  or 
if  not  so,  is  deemed  irrevocable  in  law.  2  Esp.  565.  Although  a 
letter  of  attorney  depends,  from  its  nature,  on  the  will  of  the  per- 
son making  it,  and  may,  in  general,  be  recalled  at  his  will ;  yet,  if 
lie  binds  himself,  for  a  consideration,  in  terms,  or  by  the  nature  of 
his  contract,  not  to  change  his  will,  the  law  will  not  permit  him  to 
change  it.  Rousmanier,  therefore,  could  not,  during  his  life,  by  any 
act  of  his  own,  have  revoked  this>letter  of  attorney.  But  does  it  re- 
tain its  efficacy  after  his  death?  ^Ve  think  it^es  not.  We  think  it 
well  settled,  that  a  jjower  of  attorney,  tlKnigh  1|revocabIe  during  the 
life  of  the  party,  becomes  extinct  by  his  death.   I 

This  principle  is  asserted  in  Littleton  (secUonJbG) ,  by  Lord  Coke,  in 
his  commentary  on  that  section  (52b),  and  in  Willes'  Reports  (105, 
note,  and  565).  The  legal  reason  of  the  rule  is  a  plain  one.  It  seems 
founded  on  the  prcsumptic^i,  that  the  substitute  acts  by  virtue  of  the 
authority  of  his  principal,  existing  at  the  time  the  act  is  performed; 
and  on  the  manner  in  which  he  must  execute  iiis  authority,  as  stated 
in  Combes'  Case,  9  Coke,  766.     In  that  case,  it  was  resolved,  that 

«»Tho  ooiislch'Ditioii  fif  wliotlier  tlie  poiirt  would  give  cflVct  t<»  lln-  intcniinii 
of  the  piirtif's  is  omitted. 


276  TUB  RELATION  (Parti 

"when  any  Ims  authority,  as  attorney,  to  do  any  act,  he  ought  to  do  it 
in  his  name  who  gave  the  authority."  The  reason  of  this  resolution 
is  obvious.  The  title  can,  regularly,  pass  out  of  the  person  in  whom  it 
is  vested,  only  by  a  conveyance  in  his  own  name ;  and  this  cannot  be 
executed  by  another  for  him,  when  it  could  not,  in  law,  be  executed 
by  himself.  A  conveyance  in  the  name  of  a  person,  who  was  dead  at 
the  time,  would  be  a  manifest  absurdity. 

This  general  doctrine,  that  a  power  must  be  executed  in  the  name 
of  a  person  who  gives  it,  a  doctrine  founded  on  the  nature  of  the 
transaction,  is  most  usually  engrafted  in  the  power  itself.  Its  usual 
language  is,  that  the  substitute  shall  do  that  which  he  is  empowered  to 
do,  in  the  name  of  his  principal.  He  is  put  in  the  place  and  stead  of 
his  principal,  and  is  to  act  in  his  name.  This  accustomed  form  is  ob- 
served in  the  instrument  under  consideration.  Hunt  is  constituted  the 
attorney,  and  is  authorized  to  make,  and  execute,  a  regular  bill  of  sale, 
in  the  name  of  Rousmanier.  Now,  as  an  authority  must  be  pursued,  in 
order  to  make  the  act  of  the  substitute  the  act  of  the  principal,  it  is 
necessary,  that  this  bill  of  sale  should  be  in  the  name  of  Rousmanier ; 
and  it  would  be  a  gross  absurdity,  that  a  deed  should  purport  to  be 
executed  by  him,  even  by  attorney,  after  his  death ;  for,  the  attorney  is 
in  the  place  of  the  principal,  capable  of  doing  that  alone  which  the 
principal  might  do. 

This  general  rule,  that  a  power  ceases  with  the  life  of  the  person 
giving  it,  admits  of  one  exception.  If  a  power  be  coupled  with  an  "in- 
terest,""  it  survives  the  person  giving  it,  and  may  be  executed  after  his 
death.  As  this  proposition  is  laid  down  too  positively  in  the  books  to 
be  controverted,  it  becomes  necessary  to  inquire,  what  is  meant  by  the 
expression,  "a  power  coupled  with  an  interest?"  Is  it  an  interest  in 
the  subject  on  which  the  power  is  to  be  exercised?  or  is  it  an  interest 
in  that  which  is  produced  by  the  exercise  of  the  power?  We  hold  it 
to  be  clear,  that  the  interest  which  can  protect  a  power,  after  the  death 
of  a  person  who  creates  it,  must  be  an  interest  in  the  thing  itself.  In 
other  words,  the  power  must  be  engrafted  on  an  estate  in  the  thing. 
The  words  themselves  would  seem  to  import  this  meaning.  "A  power 
coupled  with  an  interest,"  is  a  power  which  accompanies,  or  is  con- 
nected with,  an  interest.  The  power  and  the  interest  are  united  in 
the  same  person.  But  if  we  are  to  understand  by  the  word  "interest," 
an  interest  in  that  which  is  to  be  produced  by  the  exercise  of  the  pow- 
er, then  they  are  never  united.  The  power,  to  produce  the  interest, 
must  be  exercised,  and  by  its  exercise,  is  extinguished.  The  power 
ceases,  when  the  interest  commences,  and  therefore,  cannot,  in  accurate 
law  language,  be  said  to  be  "coupled"  with  it. 

But  the  substantial  basis  of  the  opinion  of  the  court  on  this  point, 
is  found  in  the  legal  reason  of  the  principle.  The  interest  or  title  in 
the  thing  being  vested  in  the  person  who  gives  the  power,  remains  in 
him,  unless  it  be  conveyed  with  the  power,  and  can  pass  out  of  him 
only  by  a  regular  act  in  his  own  name.    The  act  of  the  substitute,  there- 


^  MjdJ\ 


Ch.  5)  /        ^        TERMINATION   OF   THE    RELATION  277 

fore,  which,  in  such  a  case,  is  the  act  of  the  principal,  to  be  legally 
effectual,  must  be  in  his  name,  must  be  such  an  act  as  the  principal 
himself  would  be  capable  of  performing,  and  which  would  be  valid,  if 
performed  by  him.  Such  a  power  necessarily  ceases  with  the  life  of 
the  person  making  it.  But  if  the  interest,  or  estate,  passes  with  the 
power,  and  vests  in  the  person  by  whom  the  power  is  to  be  exercised, 
such  person  acts  in  his  own  name.  The  estate,  being  in  him,  passes 
from  him,  by  a  conveyance  in  his  own  name.  He  is  no  longer  a  sub- 
stitute, acting  in  the  place  and  name  of  another,  but  is  a  principal,  act- 
ing in  his  own  name,  in  pursuance  of  powers  which  limit  his  estate. 
The  legal  reason  which  limits  a  power  to  the  life  of  the  person  giving 
it,  exists  no  longer,  and  the  rule  ceases  with  the  reason  on  which  it  is 
founded.  The  intention  of  the  instrument  may  be  effected  without 
violating  any  legal  principle. 

This  idea  may  be  in  some  degree  illustrated  by  examples  of  cases 
in  which  the  law  is  clear,  and  which  are  incompatible  with  any  other 
exposition  of  the  term  "power  coupled  with  an  interest,"  If  the  word 
"interest,"  thus  used,  indicated  a  title  to  the  proceeds  of  the  sale,  and 
not  a  title  to  the  thing  to  be  sold,  then  a  power  to  A.,  to  sell  for  his 
own  benefit,  would  be  a  power  coupled  with  an  interest;  but  a  power 
to  A.,  to  sell  for  the  benefit  of  B.,  would  be  a  naked  power,  which 
could  be  executed  only  in  the  life  of  the  person  who  gave  it.  Yet 
for  this  distinction,  no  legal  reason  can  be  assigned.  Nor  is  there  any 
reason  for  it  in  justice;  for,  a  power  to  A.,  to  sell  for  the  benefit  of 
B.,  may  be  as  much  a  part  of  the  contract  on  which  B.  advances  his 
money,  as  if  the  power  had  been  made  to  himself.  If  this  were  the  • 
true  exposition  of  the  term,  then  a  power  to  A.,  to  sell  for  the  use  of 
B.,  inserted  in  a  conveyance  to  A.,  of  the  thing  to  be  sold,  would  not 
be  a  power  coupled  with  an  interest,  and,  consequently,  could  not  be 
exercised,  after  the  death  of  the  person  making  it;  while  a  power  to 
A.,  to  sell  and  pay  a  debt  to  himself,  though  not  accompanied  with 
any  conveyance  which  might  vest  the  title  in  him,  would  enable  him 
to  make  the  conveyance,  and  to  pass  a  title  not  in  him,  even  after  the 
vivifying  principle  of  the  power  had  become  extinct.  But  every  day's 
exi)ericnce  teaches  us,  that  the  law  is  not  as  the  first  case  put  would 
suppose.  We  know,  that  a  power  to  A.,  to  sell  for  the  benefit  of  B., 
engrafted  on  an  estate  conveyed  to  A.,  may  be  exercised  at  any  time, 
and  is  not  affected  by  the  death  of  the  person  who  created  it.  It  is, 
then,  a  power  coupled  with  an  interest,  although  the  person  to  whom 
it  is  given  had  no  interest  in  its  exercise.  His  power  is  coupled  with 
an  interest  in  the  thing,  which  enables  him  to  execute  it  in  his  own 
name,  and  is,  therefore,  not  dependent  on  the  life  of  the  person  who 
cheated  it. 

The  general  rule,  that  a  power  of  attorney,  though  irrevocable  by 
the  party,  during  his  life,  is  extinguished  by  his  death,  is  not  affected 
by  the  circumstance,  that  testamentary  powers  are  executed  after  the 
death  of  the  testator.    The  law,  in  allowing  a  testamentary  disposition 


'27S  THE  uKr.ATioN  (Parti 

of  i^roperty,  not  only  permits  a  will  to  bo  considered  as  a  conveyance, 
but  gives  it  an  operation  wliich  is  not  allowed  to  deeds  which  have 
their  elYect  during  the  life  of  the  person  who  executes  them.  An 
estate  given  by  will  may  take  eflfect  at  a  future  time,  or  on  a  future 
contingency,  and  in  the  meantime,  descends  to  the  heir.  The  power 
is.  necessarily,  to  be  executed  after  the  death  of  the  person  who  makes 
it,  and  cannot  exist  during  his  life.  It  is  the  intention,  that  it  shall  be 
executed  after  his  death.  The  conveyance  made  by  the  person  to  whom 
it  is  given,  takes  effect  by  virtue  of  the  will,  and  the  purchaser  holds 
his  title  under  it.  Every  case  of  a  power  giv-en  in  a  will,  is  considered 
in  a  court  of  chancery  as  a  trust  for  the  benefit  of  the  person  for 
whose  use  the  power  is  made,  and  as  a  devise  or  bequest  to  that  person. 

It  is,  then,  deemed  perfectly  clear,  that  the  power  given  in  this 
case,  is  a  naked  power,  not  coupled  with  an  interest,  which,  though 
irrevocable  bv  Rousmanier  himself,  expired  on  his  death.     *     *     * 

Reversed  and  remanded  for  the  second  consideration. 

\  /     .         .jv/y«/ 

^  DAVIS  V.  WINDSOR  SAVINGS  BANK.  / 

(Supreme  Court  of  Vermont,   1S74.     46  Vt.  728.) 

Assumpsit  for  money  deposited  in  July,  1865,  by  the  sister  of  plain- 
tiffs' intestate,  in  defendant's  bank  in  the  name  of  the  intestate.  She 
drew  out  the  money  in  December,  1865.  ]\Ieantime,  in  October,  1865, 
her  brother  died  in  Panama.  The  court  expressed  the  view  that  if 
the  bank  paid  the  money  in  good  faith,  and  in  ignorance  of  his  death, 
it  would  not  be  affected  by  his  death  as  a  revocation  of  his  sister's 
agency.    Judgment  w^as  directed  for  defendant.    Plaintiff  excepted. 

PiERPOiNT,  Ch.  J.     The   only   question   presented  by  the   bill   of 
exceptions  is,  w'hether  the  defendant  bank  was  justified  in  paying  the 
money  which  it  held  to  the  credit  of  the  deceased,  to  Mrs.  Dudley, 
his  sister,  who  deposited  the  money  in  the  bank  as  his  agent,  such  pay- 
ment being  made  after  the  revocation  of  her  agency  by  the  death  of 
her  principal,  said  bank  having  no  knowledge  of  such  death,  and  paid 
the  money  in  good  faith.     That  the  death  of  the  principal  terminates 
the  agency,  all  the  authorities  agree ;  but  the  effect  of  such  death  upon 
the  acts  of  those  who  in  good  faith  deal  with  the  agent  without  knowl- 
edge of  the  death,  is  a  subject  upon  which  there  is  some  diversity  of  >^   ^ 
decision.  /But  the  weight  of  authority  seems  to  be  decidedly  in  favor  of  '  ^' '-  ^ 
the  principle,  that  the  death  of  the  principal  instantly  terminates  the     ,/ 
power  of  the  agent,  an>d  that  all  dealings  with  the  agent  subsequent!    ■' 
to  that  event,  are  void  a(nd  of  no  effect,  even  though  the  parties  were 
ignorant  of  that  fact.^° 

39  Accord:  Vance  v.  ^\/i(lerson,  39  Iowa,  426  (1874).  citing  many  authori- 
ties and  quoting  from  Ilhrijer  v.  Little,  2  Oreenl.  14.  11  Am.  Dee.  25  (1822), 
and  Lewis   v.  Kerr,  17yiowa,  73   (1864).     Tlie  harshne.ss  and  Incongruity  of 


Ch.  5)  TERMINATION    OF    THE    RELATION  279 

Kent  lays  down  the  rule,  that  "the  authority  of  an  agent  determines 
by  the  death  of  his  principal.  By  the  civil  law,  the  acts  of  an  agent  done 
bona  fide  after  the  death  of  the  principal,  and  before  notice  of  his  death, 
are  valid  and  binding  on  his  representatives.  But  this  equitable  princi- 
ple does  not  prevail  in  the  English  law,  and  the  death  of  the  principal 
is  an  instantaneous  revocation  of  the  authority  of  the  agent,  unless  the 
power  be  coupled  with  an  interest."  2  Kent  Com.  646.  Story  lays 
down  the  same  doctrine,  and  says :  "As  the  act  of  the  agent  must,  if 
done  at  all,  be  done  in  the  name  of  the  principal,  it  is  impossible  that  it 
can  properly  be  done,  since  a  dead  man  can  do  no  act,  and  we  have  al- 
ready seen  that  every  authority  executed  for  another  person,  presup-  ■ 
poses  that  the  party  could  at  the  time,  by  his  personal  execution  of  it, 
have  made  the  act  valid ;"  and  numerous  authorities,  both  English  and 
American,  are  referred  to  in  support  of  the  position.  This  principle 
was  expressly  held  in  Bank  v.  Estate  of  Leavenworth,  28  Yt.  209,  and 
also  in  Mich.  Ins.  Co.  v.  Leavenworth,  30  Vt.  IL  In  the  latter  case. 
Judge  Bennett,  in  delivering  the  opinion,  says :  "Though  it  may  be  true 
that  when  a  power  is  revoked  by  the  act  of  the  party,  notice  may  be 
necessary,  yet  when  revoked  by  his  death,  the  revocation  at  once  takes 
effect;  and  if  an  act  is  subsequently  done  under  the  power,  though 
without  notice  of  the  death  of  the  party,  the  act  is  void."  Many  other 
cases  might  be  referred  to  in  support  of  the  rule,  but  I  do  not  deem  it 
necessary. 

A  different  doctrine  was  held  in  Cassiday  v.  McKenzie,  4  Watts  & 
S.  282,  39  Am.  Dec.  76 ;  but  as  is  said  in  a  note  in  2  Kent  Com.  873, 
"It  is  substituting  the  rule  of  the  civil  for  the  rule  of  the  common 
law."  Indeed  it  is  difficult  to  see  how  there  can  be  an  agent  when  there 
is  no  principal.  The  question  whether  in  this  case  there  was  an  inter- 
est coupled  with  the  agency,  and  some  other  questions  that  were  dis- 
cussed in  the  argument,  do  not  arise  upon  the  exceptions  as  made  up. 
idgment  reversed,  and  cause  remanded.  f^^^i 

^  .  ^  /     DEWEESE  V.  MUFF. 

^(Supreme  Coiirt'oif  NeT)raska.  ISfts.    57  Ni'b.  17.  77  N.  W.  .%].  -12  L.  R.  A.  7.S0, 

7:'.  .\m.  St.  Hop.  4S8.) 

WAL,  J.  On  July  1,  1892,  Catherine  Muff  executed  a  note, 
whereby  she  promised  to  pay  to  the  order  of  James  E.  Jones  the  sum 
of  $2,000  on  Scfitcmber  1st  of  the  same  year,  with  interest  thereon  at 
7  per  cent,  per  annum.     The  payee  resided  in  ICngland,  but  tlic  note 

thl.s  rule  Is  re(.'<);,'iii/((l  in  iiiany  cases.  Sec  Fanners'  I^oan  &  Trust  Co.  v. 
Wilson,  ].".;»  N.  Y.  1.'N4,  ."M  N.  E.  7.S4.  'M\  Am.  St.  Hep.  «:!"»  (1S!):5);  Clayton  v. 
Merrett.  HL'  .Miss.  .'!"»,'{  (1.s7(;i.  The  deatii  of  (lie  piin<-ipal  is  a  fact  eipnilly 
witliin  tlie  lino\vie<l;,'e  of  all  the  parlies,  anil  all  are  eipially  charged  in  law 
with  knowing  it.  Sniout  v.  Ilhery,  10  M.  &  W.  1,  lli  L.  J.  Ex.  '.iol  (1S41.'), 
po8t,  p.  C."*."]. 


-SO  THE    RELATION  (Parti 

was  delivered  to  him  personally  at  Crete,  Neb.,  at  wliieli  time  he  stated 
in  substance,  to  Mrs.  Aluft",  in  tbe  presence  of  one  J.  H.  Gruben,  her 
business  manager,  that  he  would  probably  sell  the  note  to  C.  C.  Burr, 
of  Lincoln,  as  he  (Jones)  was  going  to  England,  and  desired  to  take 
the  money  with  him.  and  that  the  maker  should  pay  the  note  to  Mr. 
r.urr.  Tiic  latter  had  been,  and  then  was,  the  agent  of  Mr.  Jones. 
Instead  of  selling  the  note,  the  payee,  soon  after  it  was  given,  indorsed 
the  same  in  blank,  and  delivered  the  instrument  to  Mr.  Burr,  for  col- 
lection. On  September  19,  1892,  Mrs.  Muff  paid  $1,000  on  the  note  to 
Mr.  Burr;  and  on  November  11,  1892,  she  paid  him  the  balance  due; 
and  the  instrument  was  at  the  time  delivered  to  her,  indorsed,  "Paid 
Nov.  11th,  92.    C.  C.  Burr." 

On  October  16,  1892,  James  E.  Jones  died,  leaving  a  will;  and  Jacob 
Bigler  was  duly  appointed  executor  of  his  estate,  and  qualified  as  such. 
The  executor  repudiates  the  payment  made  to  Mr.  Burr  on  November 
11th,  claiming  that  the  latter's  authority  to  collect  the  note  had  been 
previously  revoked  by  the  death  of  Mr.  Jones;  and  this  action  was 
brought  to  recover  from  Mrs.  Muff  the  amount  of  said  payment,  as 
the  balance  alleged  to  be  due  on  the  note.  The  jury  returned  a  verdict 
for  the  defendant,  under  a  peremptory  instruction  of  the  court  so  to 
do;  and  error  has  been  prosecuted  from  the  judgment  entered  thereon. 
After  the  filing  of  the  record  in  this  court,  Jacob  Bigler  died ;  and  the 
action  was  revived  in  the  name  of  Jasper  C.  Deweese,  as  executor  de 
bonis  non  of  the  estate  of  James  E.  Jones,  deceased. 
-''^It  is  disclosed  that  Mrs.  Muff  paid  the  amount  due  on  the  note  to 
,  I  yiv.  Burr  in  good  faith,  without  any  notice  or  knowledge  whatsoever 
I  that  he  was  not  the  owner  of  the  paper,  or  that  Mr.  Jones,  the  payee, 
was  dead.  It  is  insisted  that  the  court  erred  in  directing  a  verdict  for 
I  the  defendant,  because  the  death  of  Jones  revoked  the  authority  or 
power  of  Mr.  Burr  to  receive  from  the  maker  payment  of  the  obliga- 
tion, although  she  was  unaware  of  the  death  of  the  payee.  Undoubted- 
ly, the  rule  is  that  the  death  of  a  principal  instantly  terminates  the 
agency.  But  it  by  no  means  follows  that  all  dealings  with  the  agent 
thereafter  are  absolutely  void.  Where,  in  good  faith,  one  deals  with 
an  agent  within  his  apparent  authority,  in  ignorance  of  the  death  of 
the  principal,  the  heirs  and  representatives  of  the  latter  may  be  bound, 
in  case  the  act  to  be  done  is  not  required  to  be  performed  in  the  name 
of  the  principal.  There  is  a  sharp  conflict  in  the  authorities  on  the 
question,  but  it  is  believed  that  the  better  reasoned  cases  sustain  the 
proposition  stated,  among  which  are  the  following:  Ish  v.  Crane,  8 
Ohio  St.  520;  Id.,  13  Ohio  St.  574;  Cassiday  v.  McKenzie,  4  Watts  & 
\  S.  282,  39  Am.  Dec.  76;  *°  Davis  v.  Lane,  10  N.  H.  156;  Dick  v.  Page, 

4  0  The  leading  cases  for  this  view  are  Cassiday  v.  McKenzie,  4  Watts  & 
S.  282,  39  Am.  Dec.  76  (1842),  and  Ish  v.  Crane,  8  Ohio  St.  520  (1858),  Id., 
13  Ohio  St.  574  (1862),  in  the  latter  of  which  is  an  exhaustive  review  of  the 
authorities.  The  court  distinguishes  between  a  deed,  which  must  be  made 
in  the  name  of  the  principal,  and  acts  in  pais  by  the  agent.     He  denies  the 


Ch.  5)  TERMINATION    OF    THE    RELATION  281 

17  Mo.  234,  57  Am.  Dec.  267;  Moore  v.  Hall,  48  Mich.  143,  11  N.  W. 
844;   1  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  1224. 

We  quote  the  following  apposite  language  from  the  opinion  in  Ish 
V.  Crane,  8  Ohio  St.  520 :  "Now,  upon  what  principle  does  the  obliga- 
tion, imposed  by  the  acts  of  the  agent  after  his  authority  has  terminat- 
ed, really  rest  ?  It  seems  to  me  the  true  answer  is,  public  policy.  The 
great  and  practical  purposes  and  interests  of  trade  and  commerce,  and 
the  imperious  necessity  of  confidence  in  the  social  and  commercial 
relations  of  men,  require  that  an  agency,  when  constituted,  should  con- 
tinue to  be  duly  accredited.  To  secure  this  confidence,  and  consequent 
facility  and  aid  to  the  purposes  and  interests  of  commerce,  it  is  admit- 
ted that  an  agency,  in  cases  of  actual  revocation,  is  still  to  be  regarded 
as  continuing,  in  such  cases  as  the  present,  towards  third  persons,  un- 
til actual  or  implied  notice  of  the  revocation.  And  I  admit  that  I  can 
perceive  no  reason  why  the  rule  should  be  held  differently  in  cases  of 
revocation  by  mere  operation  of  law.  It  seems  to  me  that  in  all  such 
cases  the  party  who  has  by  his  own  conduct  purposely  invited  con- 
fidence and  credit  to  be  reposed  in  another  as  his  agent,  and  has  there- 
by induced  another  to  deal  with  him  in  good  faith,  as  such  agent,  nei- 
ther such  party  nor  his  representatives  ought  to  be  permitted,  in  law, 
to  gainsay  the  commission  of  credit  and  confidence  so  given  to  him  by 
the  principal.  And  I  think  the  authorities  go  to  that  extent.  See 
Pickard  v.  Sears,  6  Adol.  &  E.  469. 

"The  extensive  relations  of  commerce  are  ofter  remote  as  well  as 
intimate.  The  application  of  this  doctrine  must  include  factors,  for- 
eign as  well  as  domestic,  commission  merchants,  consignees,  and  super- 
cargoes, and  other  agents  remote  from  their  principal,  and  who  are 
required  for  long  periods  of  time,  not  unfrequently,  by  their  principal, 
to  transact  business  of  immense  importance,  without  a  possibility  of 
knowing  perhaps  even  the  probable  continuance  of  the  life  of  the  prin- 
cipal. It  must  not  unfrequently  happen  that  valuable  cargoes  are  sold 
and  purchased  in  foreign  countries  by  the  agent,  in  obedience  to  his 
instructions  from  his  principal,  after  and  without  knowledge  of  his 
death.  And  so,  too,  cases  are  constantly  occurring  of  money  being 
collected  and  paid  by  agents,  under  instructions  of  the  principal,  after 
and  without  knowledge  of  his  death.  In  all  these  cases,  there  is  cer- 
tainly every  reason  for  holding  valid  and  binding  the  acts  so  done  by 
the  agency  which  the  principal  had,  in  his  life,  constituted  and  ordered, 
that  there  would  be  to  hold  valid  the  acts  of  one  who  had  ceased  to  be 
his  agent,  by  revocation  of  his  power,  but  without  notice  to  the  one 
trusting  him  as  agent." 

power  of  death  to  do  for  revorafion  what  tho  principal   could   not  do  If  ho  f       /j 

were  alive,  and  insists  on  tho  eciwity  of  re<iulrlnK  the  heirs  and   roprcscnla-  /  ' 

tlve.s    to   take   the   estate   snipject    to   the  Imrdens    caused   hy   the   aets   of   tiie  f 

principal,  for  which   he  would  have  to  assume   rosprtnsihiljty  were  he  alive.  • 

The  soundness   of   this   reasoidn;:   is   recuRnized    In   I>enz   v.   r.rnwn,    41    Wis. 

172   (ISTCi,   and    in    Murdock   v.   Leath,    10    IIel.sk.   K'.U   (1S7J(.      I'.ut   compare 

Rigs  V.  Cage,  2  Humph.  .350,  37  .\m.  Dee.  559  (1841).  |  \ 


/ 


i2Sl'  the  Kin.ATioN  (I'art  I 

Jn  the  case  at  bar  it  was  imt  necessary  for  the  ai^anit,  Air.  I'urr,  to 
colleet  or  receive  the  money  in  tlie  name  of  Air.  Jones,  nor  chd  he  do 
so.  The  defendant  was  justified  in  paying  the  money  under  the  cir- 
cumstances disclosed  by  the  evidence.  The  note  was  properly  indorsed 
bv  the  payee  in  blank,  and  it  was  at  the  time  in  possession  of  Mr.  lUirr. 
Payment'to  him.  without  knowledge  that  the  note  was  held  ftu"  col- 
lection, or  iluu  the  owner  was  dead,  discharged  the  debt.  Davis  v. 
Association,  20  La.  Ann.  24;  18  Am.  &  Eng.  Enc.  Law,  190;  Edwards 
V.  Parks,  60  N.  C.  598 ;  Loomis  v.  Downs,  26  111.  App.  257 ;  Stoddard  v. 
Burton.  41  Iowa.  582;  Boyd  v.  Corbitt,  37  Mich.  52;  Moore  v. 
Hall.  48  Mich.  143,  11  N.  W.  844.  In  the  case  last  cited,  a  nego- 
tiable note  w\as  indorsed  by  the  payee,  and  delivered  to  an  agent  for 
collection.  Subsequently  the  payee  died.  It  was  held  that  the  au- 
thority to  collect  was  not  thereby  revoked.  A  verdict  for  the  defend- 
ant was  properly  directed  in  the  case  at  bar. 

The  conclusion  reached  obviates  an  examination  of  the  instructions 
tendered  by  the  plaintiff,  and  refused  by  the  court.  The  judgment  is 
affirmed. 


5W 


in.  By  Insanity,  Bankruptcy,  etc. 


DAVIS  V.  LANE. 

(Superior  Court  of  Judicature  of  New  Hanipsliire.  18.39.     10  N.  II.  156.) 

See  ante,  p.  23,  on  which  will  be  found  the  facts,  and  another  por- 
tion of  the  opinion. 

Parker,  C.  J.  *  *  *  But  it  would  be  preposterous,  where  the 
power  is  in  its  nature  revocable,  to  hold  that  the  principal  was,  in  con- 
templation of  law,  present,  making  a  contract,  or  acknowledging  a 
deed,  when  he  was  in  fact  lying  insensible  upon  his  death  bed,  and  this 
fact  well  known  to  those  who  undertook  to  act  with  and  for  him.  The 
act  done  by  the  agent,  under  a  revocable  power,  implies  the  existence 
of  volition  on  the  part  of  the  principal.  He  makes  the  contract — he 
does  the  act.  It  is  done  through  the  more  active  instrumentality  of 
another,  but  the  latter  represents  his  person,  and  uses  his  name. 

Farther — Upon  the  constitution  of  an  agent  or  attorney  to  act  for 
another,  where  the  authority  is  not  coupled  with  an  interest,  and  not 
irrevocable,  there  exists,  at  all  times,  a  right  of  supervision  in  the 
principal,  and  power  to  terminate  the  authority  of  the  agent  at  the 
pleasure  of  the  principal.  The  law  secures  to  the  principal  the  right 
of  judging  how  long  he  will  be  represented  by  the  agent,  and  suffer 
him  to  act  in  his  name.  So  long  as,  having  the  power,  he  does  not 
exercise  the  will  to  revoke,  the  authority  continues. 

When,  then,  an  act  of  Providence  deprives  the  principal  of  the 
power  to  exercise  any  judgment  or  will  on  the  subject,  the  authority 
of  the  agent  to  act  should  thereby  be  suspended  for  the  time  being; 


J 


Ch.  5)  TERMIXATION    OF    THE    RELATION  283 

Otherwise  the  right  of  the  agent  would  be  continued  beyond  the  period 
when  all  evidence  that  the  principal  chose  to  continue  the  authority 
had  ceased;  for  after  the  principal  was  deprived  of  the  power  to  ex- 
ercise any  will  upon  the  subject,  there  could  be  no  assent,  or  acqui- 
escence, or  evidence  of  any  kind  to  show  that  he  consented  that  the 
agency  should  continue  to  exist.  And,  moreover,  a  confirmed  insanity 
would  render  wholly  irrevocable  an  authority,  which,  by  the  original 
nature  of  its  constitution,  it  was  to  be  in  the  power  of  the  principal  at 
-^--^y  time  to  revoke.  . — ^ 

I       It  is  for  these  reasons  that  we  are  of  opinion  that  the  insanity  of  the  y 

I  principal,  or  his  incapacity  to  exercise  any  volition  upon  the  subject,  yr 

j  /  by  reason  of  an  entire  loss  of  mental  power,  operates  as  a  revocation,        a 
'      or  suspension  for  the  time  being,  of  the  authority  of  an  agent  acting  ^ 

under  a  revocable  power.     If,  on  the  recovery  of  the  principal,  he    --  -^f 

manifests  no  will  to  terminate  the  authority,  it  may  be  considered  as 
a  mere  suspension.  And  his  assent  to  acts  done  during  the  suspen- 
sion may  be  inferred  from  his  forbearing  to  express  dissent  when 
they  came  to  his  knowledge.  1  Livermore  on  Agency,  300,  Cairness  v. 
Bleecker. 

The  act  of  the  agent,  in  the  execution  of  the  power,  however,  may' 
not  in  all  cases  be  avoided  on  account  of  the  incapacity.  If  the  prin- 
cipal has  enabled  the  agent  to  hold  himself  out  as  having  authority, 
by  a  written  letter  of  attorney,  or  by  a  previous  employment,  and  the 
incapacity  of  the  principal  is  not  known  to  those  who  deal  with  the 
agent,  within  the  scope  of  the  authority  he  appears  to  possess,  the 
transactions  may  be  held  valid,  and  binding  upon  the  principal.  Such 
case  forms  an  exception  to  the  rule,  and  the  principal  and  those  claim- 
ing under  him  may  be  precluded  from  setting  up  his  insanity  as  a  revo- 
cation, because  he  had  given  the  agent  power  to  hold  hinj^elf  out  as 
having  authority,  and  because  the  other  party  had  acted  upon  the 
faith  of  it,  and  in  ignorance  of  any  termination  of  it.  They  would  be 
so  precluded  in  the  case  of  an  express  revocation,  which  was  unknown 
to  the  other  party.  2  Livermore  on  Agency,  310;  5  D.  &  E.  215. 
Salte  V.  Field  ;  Harper  v.  Little,  2  Grcenl.  18,  11  Am.  Dec.  25.  And  a 
revocation  l)y  operation  of  law,  on  account  of  the  insanity  of  the  prin- 
cipal, cannot  have  a  greater  efifect  than  the  express  revocation  of  the 
party  himself.  But  this  case  is  not  of  that  character.  Here  there  was 
full  knowledge  of  the  situation  of  the  plaintiff's  intestate,  by  Prescott, 
when  he  received  the  note. 

The  principle  that  insanity  operates  as  a  revocation  cannot  appiv 
where  the  power  is  c<nii)lcfl  with  an  interest,  so  that  it  can  be  exer- 
cised in  the  name  of  the  agent ;  for  such  case  does  not  presuppose  any 
volition  of  the  principal  at  the  time,  or  require  any  act  to  be  flonc  in 
liis  name,  and  is  not  revoked  by  his  death. 

Whether  it  is  applicable  to  the  case  of  a  power  which  is  part  of  a 
security,  or  executed  for  a  valuable  consideration,  and  thus  is  by  its 


l/v<Tr7 


\, 


A-^tl, 


284 


THE    UKLATION 


(Part  1 


tonus  or  nature  irrevocable;  and  wliicli  secnis  to  be  regarded  in  Kng- 
land  as  a  power  coupled  with  an  interest  (10  P)arn.  &  Cres.  731;  4 
Camp.  272),  may  be  a  question  of  more  doubt  ([Hunt  v.  Ennis]  2 
Mason,  249  [Fed.  Cas.  No.  6,889]).  Such  a  power  could  not  be  re- 
voked by  the  princijial,  if  his  sanity  was  continued  (2  Livermore,  308), 
and  any  volition  of  his  couUl  not  alter  the  case.  Some  of  the  reasons, 
therefore,  which  have  been  adverted  to,  would  not  exist  in  a  case  of 
that  character.  But  a  power  of  that  kind  is  to  be  executed  in  the 
name  of  the  principal ;  and  it  was  held,  in  Hunt  v.  Rousmanier's  Adm'rs 
[8  Wheat.  174,  5  L.  Ed.  589,  ante,  p.  275],  before  cited,  that  the  death 
of  the  principal  operates  as  a  revocation  of  it,  for  the  reason  that  after 
that  event  no  act  can  be  done  in  his  name,  as  if  he  himself  performed 
it.  This  reason  would  not  exist  where  he  was  still  living-;  and  per- 
haps he  and  others  might  in  such  case  be  precluded  from  setting  up 
his  insanity  in  avoidance  of  the  act,  on  the  ground  that  he  would  have 
had  no  right  to  interfere,  if  sane,  and  had  therefore  no  right  to  insist 
on  his  insanity  as  an  objection.*^    *    *    * 

The  result  of  the  view  we  have  taken  is,  that  the  wife  of  the  intestate 
had  at  the  time  no  authority  to  dispose  of  this  note  to  Prescott,  and 
that  he  acquired  no  title  to  it,  and  had  no  right  to  receive  the  money. 
We  have  already  held,  on  a  former  case,  in  this  suit,  that  a  payment 
to  him  by  the  defendant,  under  such  circumstances,  could  not  operate 
to  discharge  the  note.  Davis  v.  Eane,  8  N.  H.  224.  The  instructions 
to  the  jury  were  erroneous ;  but  there  is  no  agreement  in  the  case  by 
which  we  are  authorized  to  enter  judgment  for  the  plaintiff,  and  the 
action  must,  therefore,  be  transferred  to  the  common  pleas,  for  a  new 
trial,  if  there  is  any  thing  further  in  controversy  between  the  parties. 

~"  41  The  bankruptcy  of  a  principal  will  not  revoke  a  power  coupled  with  an 
interest.  Dickinson  v.  Central  Nat.  Bank,  129  Mass.  279,  37  Am.  Rep.  351 
(1880),  though  It  will  terminate  an  ordinary  agency.  Markwick  v.  Harding- 
ham,  15  Ch.  D.  339,  43  L.  T.  647,  29  W.  R.  361  (1880).  The  death  of  one 
partner,  or  joint  owner,  terminates  an  agency  for  such  a  principal.  Long  v. 
Thayer,  150  U.  S.  520,  14  Sup.  Ct.  189,  37  L.  Ed.  1107  (1893).  And  so  ordi- 
narily does  the  dissolution  of  a  partnership.  Schlater  v.  Winpenny,  75  Pa. 
.321  (1874).  But  a  mere  change  in  a  firm  nsime,  with  no  change  in  the  indi- 
viduals, or  their  interests,  will  have  no  effect.  The  confidence  reposed  re- 
mains as  before.     Billingsley  v.   Dawson,  27  Iowa,  210  (1869). 

War  interrupts  communication  so  as  to  terminate  an  agency  when  the 
principal  and  agent  reside  on  opposite  sides  of  the  hostile  lines.  Insurance 
Co.  V.  Davis.  95  U.  S.  42.5,  24  L.  Ed.  453  (1877).  But  see,  contra.  Sands  v. 
N.  Y.  Life  Ins.  Co.,  50  Is^  Y.  626,  10  Am.  Rep.  535  (1872).  This  is  not  so, 
however,  In  cases  where  no  intercommunication  is  necessary,  and  where  no 
business  intercourse  is  required,  especially  if  the  agent  acts  only  for  the 
purpose  of  preserving  the  property  of  the  principal  (Lyon  v.  Kent,  45  Ala. 
656;  Williams  v.  Paine,  169  U.  S.  55,  18  Sup.  Ct.  279,  42  L,  Ed.  658  [1898]), 
even  by  investing  it  in  the  hostile  country  (Stoddart  v.  U.  S.,  6  Ct.  CI.  340 
[1870]). 


7,7- 


Ch.  5)  TERMINATION    OF    THE    RELATION  285 

(2- 


SECTION  3.— EFFECT  OF  TERMINATION 


/*- 


GUNTER  V.  STUART. 

(Supreme  Court  of  Alabama,  1888.     87  Ala,  196,  6  South.  266,   13  Am.  St. 

Rep.  21.) 

Action  on  account  against  Gunter  and  others,  late  partners,  for 
goods  furnished  for  their  steamboats.    The  partnership  was  dissolved 
on  October  5,  1885.    The  court  below  refused  to  charge  that  if  McKee        /i 
had  ceased  to  be  their  agent,  or  if  the  partnership  had  been  dissolved  i 

before  McKee  indorsed  the  accounts  as  correct,  then  defendants  can-  \""-' 

not  be  bound.  \      v 

Stone,  C.  J.     Part  of  vStuart's  evidence,  on  which  he  relied  for  "Vi. 

recovery  against  the  steamboat  company,  the  appellants,  consisted  in 
certain  stated  accounts,  certified  to  be  correct  by  one  McKee,  styling  } 

himself  "clerk."  These  certificates,  several  of  them,  bear  date  in  Octo- 
ber, 1885,  and  some  of  the  items  appear  to  be  later  than  this.  There 
w^as  testimony  tending  to  show  that  McKee  ceased  to  be  clerk  or 
agent  of  appellants  about  June  1,  1885,  and  that  he  was  not  afterwards 
in  their  employment. 

It  is  too  clear  to  admit  of  argument  that  after  McKee  ceased  to  be 
clerk  and  agent  of  appellants  he  could  neither  do  any  act,  state  an  ac- 
count, or  make  an  admission,  that  would  bind  them.  While  the  rela- 
tion of  principal  and  agent  exists,  the  agent  can  bind  his  principal  by 
any  act  done  within  the  scope  of  his  authority,  and  by  any  admission 
made  contemporaneous  with  and  explanatory  of  the  act  of  agency  so 
done  (3  Brick.  Dig.  p.  25,  §§  107,  108) ;  and  it  may  be  that,  acting 
as  clerk  of  the  boat,  it  was  within  the  purview  of  his  duties  to  make 
purchases  for  the  boat,  and  to  state  accounts.  All  these  powers,  how- 
ever, would  necessarily  terminate  when  his  connection  with  the  boat  ' 
was  severed.*-  To  obtain,  after  that  time,  any  information  he  might 
l)Ossess,  he  must  needs  have  been  made  a  witness. 

Charges  2  and  3  asked  by  appellants  ought  to  have  been  given. 
Reversed  and  remanded. 

«2Th()nKh  a  discliarKcd  agont  may  porliaps  to  a  limited  extent,  close  up 
traiisactirdi.s  entered  into  tlirouuh  him  (Farmer.s'  &  Mechanics'  Bank  v.  Stiek- 
ney,  Fed.  Cas.  No.  4,(i.'57,  Hrunner,  (.'ol.  Cas.  54.3  118451),  still  this  power  is 
very  narrow  and  unusual  (Itaudouine  v.  Grimes,  64  Iowa,  .370,  20  N.  W. 
476  [1.S.S4I).  and  is  usually  eontincd  to  cases  in  which  third  persons  have  not 
had  the  notice  of  the  revocation  wiilcii  tlic  principal  is  bound  to  give  (Easton's 
Adin'x  V.  i:ilis.  1   Handy,  70  []s.-,tl). 

As  lictwccii  th(^  agent  and  the  jirincipal,  after  an  etfectual  termination  of  the 
agency  tlu;  agent  is  dejirived  of  all  jiower  to  act,  and  therefore  can  ac(|uire 
no  rights  against  the  princi[)al   iiy   any   subsequent  attempt  to  exercise  tiu; 
powers  of  his  agency.     In  re  Overwog;    Hans  v.  Durant,  (10001  1  Ch.  200,  81     / 
L.  T.  770,  00  L.  .1.  Ch.  2.55;    Soule  v.  Donglierty.  24  Vt.  02  (18,52).     V,y  such/ 
acts  he  only   subjects  himself  to  liability.     McKweu  v.   Kerfoot,  37  111.  53(/ 
(1865). 


L^ 


) 


^is^j 


PART  II 
THE  AUTHORITY 


/M* 


CHAPTER  I 
NATURE  AND  EXTENT 


SECTION  1.— IN  general; 


BURCHARD  v.  HULLL' 
(Supreme  Court  of  Minnesota,  1898.    71  Minn.  430,  74  N.  W.  163.) 

Plaintiff  was  a  customer  of  the  Vermont  National  Bank  of  Brattle- 
boro.  and  requested  the  bank  to  loan  $1,200  for  her  on  Western  real 
estate  security.  The  bank  made  the  loan,  through  A.  F.  &  L.  E.  Kel- 
ley,  of  Minneapolis,  to  defendant  Hull,  who  executed  a  mortgage  on 
the  land  in  question  to  secure  the  payment  of  the  note  which  he  exe- 
cuted, payable  in  five  years,  according  to  ten  coupon  notes  of  even 
date,  attached  to  the  principal  note  and  payable,  one  on  January  1st, 
and  one  on  July  1st,  of  each  year.  After  recording  the  mortgage, 
the  Kelleys  transmitted  it,  with  the  note  and  coupons,  to  the  bank, 
which  delivered  them  to  plaintiff,  who  has  ever  since  retained  them, 
except  as  she  has  detached  and  delivered  to  the  bank  for  collection 
the  coupons  as  they  matured.  She  did  not  know  of  the  Kelleys,  ex- 
cept as  she  saw  their  names  printed  on  the  margins  of  the  notes.  The 
custom  of  the  bank  was  to  send  these  coupons  to  the  Kelleys,  who 
would  collect  and  remit  the  proceeds  to  the  bank,  which  then  placed 
the  amounts  to  the  credit  of  plaintiff's  account. 

Hull  defaulted  in  payments  due  July  1,  1892,  and  January  1,  1893, 
but  the  Kelleys  did  not  report  this,  and  advanced  the  amounts  out 
of  their  own  funds.  They  placed  these  coupons  in  the  hands  of  an 
attorney  to  foreclose  the  mortgage,  and  A.  F.  Kelley  bid  it  in  at  $1,- 
400.  There  was  no  redemption,  and  in  November,  1894,  A.  F.  Kelley 
conveyed  the  land  to  the  defendant  Wells  for  $1,750,  and  appropri- 
ated the  money  to  his  own  use.  Wells  seems  to  have  bought  in  good 
faith,  and  neither  plaintiff  nor  the  bank  knew  of  the  pretended  fore- 
closure until  the  Kelleys  failed  in  1896,  for  the  Kelleys  had  kept  up 

(28G) 


t)^i^ 


J 


Ch.  1)  NATURE    AND    EXTEXT  287 

the  coupon  payments.  Plaintiff,  upon  ascertaining  the  facts,  promptly 
repudiated  the  attempted  foreclosure  and  commenced  this  action. 
From  orders  denying  her  motions  to  amend  pleadings  and  for  a  new- 
trial,  she  appeals. 

Mitchell,  J.i  *  *  *  There  is  a  mass  of  evidence  tending  to 
show  that  it  was  the  custom  of  the  Kelleys  to  advance  money  to  pay 
interest  on  loans  placed  by  them  for  others,  and  then  foreclose  the 
mortgages,  bid  the  land  in,  in  their  own  names,  and  sell  it  if  not  re- 
deemed. But  there  is  not  a  particle  of  evidence  that  plaintiff'  had 
any  knowledge  of  such  a  custom,  and,  there  being  nothing  in  the  facts 
making  it  her  duty  to  know  it,  we  dismiss  the  evidence  as  to  the  Kel- 
leys' custom  with  the  simple  statement  that  it  is  wholly  irrelevant  and 
immaterial. 

We  have  not  overlooked  the  fact  that  the  Vermont  bank  had. 
through  the  Kelleys,  made  one  or  two  other  loans  for  the  plaintiff 
under  similar  authority,  the  securities  for  which  were  delivered  and 
retained  by  her,  and  the  principal  and  interest  as  they  matured  col- 
lected through  the  bank.  But  there  is  nothing  in  these  transactions 
which  at  all  affects  the  present  one,  or  at  all  tends  to  enlarge  or  change 
the  authority,  either  express  or  implied,  of  the  bank  or  the  Kelleys 
in  the  matter  now  under  consideration.  The  case  is  entirely  free  from 
any  element  of  estoppel  by  conduct,  or  of  apparent,  as  distinguished 
from  actual,  authority,  or  of  ratification. 

The  defendant  Wells  must  stand  exclusively  upon  the  proposition 
that  the  act  of  the  plaintiff  in  delivering  or  transmitting  these  interest 
coupons  (she  herself  retaining  the  mortgage  and  principal  note)  to 
another,  with  authority  to  collect  the  same,  gave  such  other  person 
implied  authority  to  foreclose  the  mortgage  if  the  coupons  were  not 
paid.  The  learned  trial  judge  saw  clearly  that  this  was  so,  and  hence, 
in  his  memorandum,  placed  his  decision  squarely  on  the  ground  that, 
in  placing  the  coupons  in  the  hands  of  the  bank  for  collection,  she 
authorized  it  and  such  subagents  as  it  might  employ  to  use  the  usual 
and  customary  methods  of  enforcing  payment ;  and,  as  the  coupons 
were  secured  by  a  mortgage  containing  a  power  of  sale,  the  foreclo- 
sure of  the  mortgage  under  the  power  is  the  usual  and  customary 
method  of  enforcing  payment. 

It  is  axiomatic  in  the  law  of  agency  that  no  one  can  become  the 
agent  of  another  except  by  the  will  of  the  principal,  either  express  or 
implied  from  the  particular  circumstances;  that  an  agent  cannot  cre- 
ate in  himself  an  auth(;rity  to  do  a  particular  act  merely  by  its  per- 
formance. It  is  equally  axiomatic  that  the  extent  of  the  authoritv 
of  an  agent  also  depends  upon  the  will  of  the  principal,  and  that  the 
latter  will  be  bound  by  the  acts  of  the  former  only  to  the  extent  of 
the  authority,  actual  or  apparent,  which  he  has  conferred  upon  the 
agent. 

1  Part  of  (lio  ojiliiinn  Is  nmHtocl. 


2SS  THE  AUTiiouiTY  (Part  2 

It  is.  of  course,  a  fuiuhmu'iital  priiu-iiilc  in  llic  law  of  agency,  that 
every  delegaiiiMi  of  power  carries  with  it,  by  inipHcalion,  the  author- 
ity to  do  all  those  things  which  are  reasoual)ly  necessary  and  proper 
to  carry  into  effect  the  main  power  conferred,  and  which  are  not  for- 
bidden. But  the  doctrine  of  implied  authority  goes  no  further  than 
this.  It  is  also  true  that  where  the  principal  confers  upon  his  agent 
an  authority  of  a  kind,  or  empowers  him  to  transact  business  of  a 
nature,  in  reference  to  which  there  is  a  well-defined  and  publicly 
known  usage,  it  is  the  presumption  of  the  law,  in  the  absence  of  any- 
thing to  indicate  a  contrary  intent,  that  the  authority  was  conferred 
in  contemplation  of  the  usage;  and  therefore  third  persons  who  deal 
with  the  agent  in  good  faith  have  a  right  to  presume  that  the  agent 
has  been  clothed  with  all  the  powers  with  which,  according  to  such 
usage  in  that  particular  business,  similar  agents  are  clothed.  But, 
in  order  to  give  the  usage  this  effect,  it  must  be  known  to  the  prin- 
cipal, or  have  existed  for  such  a  length  of  time,  and  become  so  widely 
known,  as  to  warrant  the  presumption  that  the  principal  had  it  in  view 
at  the  time  he  appointed  the  agent. 

On  the  facts  of  this  case,  the  doctrine  of  implied  power  cannot 
be  successfully  invoked  under  either  of  these  principles.^    If  an  agent 

2  In  another  case  in  which  one  Aldrich,  who  at  the  request  of  the  Central 
Trust  Company  had  negotiated  a  loan  from  Daniel  Steele  to  Snyder,  had 
afterwards  received  money  to  apply  upon  the  note,  the  question  of  his  author- 
ity to  receive  such  payments  so  as  to  charge  Steele  as  his  principal  became  the 
pivotal  question.  Lester  v.  Snyder,  12  Colo.  App.  351,  55  Pac.  G13  (189S) : 
"Upon  the  trial  the  court  called  a  jury  for  advisory  purposes,  and  submitted 
to  it  this  question  of  agency,  and  it  was  found  in  favor  of  plaintiff's  contention. 
There  was  no  evidence  adduced  showing  or  tending  to  show  that  Aldrich  or 
the  securities  company  was  appointed  by  Steele  as  his  agent,  or  authorized 
by  him  to  collect  or  receive  any  payments  of  this  loan.  The  questions,  then, 
to  be  determined  are  whether  or  not  the  acts  of  Steele  in  connection  with 
those  of  the  securities  company  and  Aldrich  were  such  as  to  create  an  implied 
agency,  and  to  estop  Steele  from  pleading  that  he  was  not.  Under  the  circum- 
stances of  this  case,  we  think  that  the  court  erred  in  submitting  the  question 
of  agency  to  a  jury.  The  facts  which  it  is  claimed  created  the  agency  in  this 
case  were  undisputed,  and  it  therefore  became  a  question  of  law  solely  for 
the  court  to  determine  upon  the  conceded  facts.  There  was  no  dispute  nor 
conflict  of  evidence  for  the  jury  to  weigh  and  determine.  Mechem,  Ag.  §  105. 
As  the  jury  in  this  case  was  called  for  advisory  purposes  only,  however,  and 
its  verdict  could  be  disregarded  by  the  court  if  it  so  desired,  this  of  itself 
would  not  be  sufficient  to  justify  the  reversal  of  the  judgment.  If  the  facts 
were  suffkiont  in  law  to  create  an  agency,  the  judgment  must  be  sustained, 
notwithstanding  the  question  should  not  have  been  sul>mitted  to  the  jury.  In 
the  determination  of  the  question  as  to  whether  or  not  an  agency  existed  in 
the  circumstances  of  this  case  there  are  certain  fundamental  and  well-estab- 
lished principles  bearing  upon  the  doctrine  of  agency  which  must  be  borne 
in  mind.  They  are  thus  tersely  and  aptly  stated  by  Mr.  Mechem:  'Among 
these  are.  as  has  been  seen,  that  the  law  indulges  in  no  bare  presumptions 
that  an  agency  exists, — it  must  be  proved  or  presumed  from  facts ;  that  the 
agent  caiuiot  establish  his  own  authority,  either  by  his  representations  or 
by  assuming  to  exercise  it;  that  the  authority  cannot  be  established  by  mere 
I'unior  or  general  reputation ;  that  even  a  general  authority  is  not  an  unlim- 
ited one,  and  that  every  authority  must  find  its  ultimate  source  in  some  act 
of  the  principal.  Persons  dealing  with  an  assumed  agent,  therefore,  whether 
the  assumed  agency  be  a  general  or  a  sr)ecial  one,  are  bound  at  their  peril  to 
ascertain,  not  only  the  fact  of  the  agency,  but  the  extent  of  the  authority; 


Ch.  1)  NATURE   AND    EXTENT  289 

to  whom  an  interest  coupon  is  sent  for  collection  (while  his  principal 
retains  in  his  own  possession  the  collateral  mortgage  and  principal 
note  not  yet  due)  has  implied  power  to  foreclose  the  mortgage,  the 
sooner  men  know  it  the  better.  We  apprehend  the  announcement  of 
any  such  doctrine  would  take  both  the  legal  profession  and  business 
men  by  surprise.  It  may  be  that  the  power  to  collect  would  carry 
with  it  power  to  sue  on  the  coupon.  But  the  foreclosure  of  the  secu- 
rity which  the  principal  may  have  is  an  entirely  different  matter. 
The  mortgage  and  the  evidence  of  the  debt  are  separate  instruments, 
and  afford  independent  remedies.  The  creditor  may  commence  a  per- 
sonal action  on  the  note  or  other  evidence  of  the  debt,  or  he  may 
proceed  to  realize  on  his  security ;  and  the  pursuit  of  one  remedy  is 
no  bar  to  the  other.  The  right  to  foreclose  is  not  waived  or  impaired 
by  the  recovery  of  judgment  upon  the  debt.  A  creditor  might  desire 
to  sue  on  the  debt,  but  not  to  foreclose  his  security,  and  vice  versa. 
He  might  be  willing  to  intrust  an  agent  with  the  collection  of  an  in- 
terest coupon,  but  unwilling  to  intrust  him  with  the  foreclosure  of 
a  collateral  mortgage,  which  might  result  in  sacrificing  his  security 
for  the  whole  debt.  As  suggested  in  appellant's  brief,  suppose  the 
plaintiff,  instead  of  a  mortgage  on  real  estate,  had  held,  as  security, 
elevator  receipts  for  grain,  and  had  transmitted  these  interest  coupons 
to  an  agent  for  collection,  she  retaining  the  receipts  for  the  grain ; 
would  it  be  claimed  that  the  agent  would  have  implied  authority  to 
sell  the  grain?  The  fact  that  in  this  case  the  mortgage  was  on  real 
property,  and  on  record,  does  not  alter  the  principle. 

and,  in  case  either  is  controverted,  the  burden  of  proof  is  ui)on  them  to  estab- 
lish it.'  Applying  these  principles,  it  is  clear  that,  in  whatever  licht  the 
acts  of  the  parties  may  be  viewed,  there  was  an  entire  failure  to  e.stabli.sh  any 
authority  or  agency,  either  express  or  implied,  on  the  part  of  Aldrich  or  the 
securities  company,  to  receive  payment  of  the  principal,  or  any  i)art  of  it,  of 
the  Snyder  loan.  Mr.  Steele  was  at  all  times  in  possession  of  all  of  the  se- 
curities representin;,'  the  loan,  and  at  no  time  does  it  appear  from  tiie  evidence 
that  he  ever  intrusted  them,  or  any  of  them,  to  Aldrich  or  the  securities  com- 
pany, or  even  to  the  Central  Trust  ("oiiipany.  We  may  concede — although  even 
that  is  not  established  by  the  evidence — that  Aldrich  was  the  agent  of  Steele 
to  collect  the  interest,  but  thai  would  not  autliorize  him  to  collect  the  jirin- 
rir>al.  and  payment  to  him  of  such  priiicii)al  wotild  not  discharge  the  liability 
of  the  maker  to  the  payee.  Mechem,  Ag.  §  370;  Smith  v.  Kidd.  08  N.  Y.  i:;6. 
23  Am.  Rep.  157.  We  might  even  go  further,  and  admit  it  to  have  been  shown 
by  the  evidence — which  it  was  not — that  .Mdrich  was,  under  the  circumstances 
of  the  case,  tlie  general  agent  of  Steele,  authorized  to  receive  the  jiayment  of 
the  jtrincipal  when  due;  but  even  then  be  would  have  no  authority  to  receive 
payment  before  maturity,  so  as  to  bind  the  jiayee.  It  will  be  i-emenibered 
that  the  princijial  of  this  note  under  the  extension  agreement  diil  not  nialur(> 
until  August  1,  l.SI)7,  and  the  pretended  iiayments  to  Aldrich  were  received 
l)y  him  about  the  beginning  of  the  year  lM)t;,  more  than  l.S  months  i)rior  to 
mattu-ity,  and  while  he  was  not  In  jiossession  of  a  single  security,  either  the 
deed  of  trust,  the  note,  the  extension  agreement,  or  the  interest  coupon  notes. 
'J'be  party  who  makes  payment  tmder  such  circumstances  as  these  must  do  so 
at  bis  i»eril." 

In  IJlll  v.  Helton,  SO  Ala.  Hl'S.  1  South.  340  nssd).  the  court  held  that,  while 
the  authority  as  agent  may  be  proved  l)y  circumstances,  tlioso  cinniiistances 
must  in  some  way,  directly  or  indirectly,  be  connected  with  tiie  principal. 
Gou».I'i:.&  A.— 19 


-IH)  TiiH  Airi'iioKirY  (Part  2 

Whether,  had  the  principal  iu>tc  hcon  (hio.  and  been  transniilted 
for  collection,  the  agent  wouUl  have  had  implied  authority  to  fore- 
close, is  a  question  not  before  us,  antl  which  need  not  now  be  consid- 
ered. B\it  very  clearly,  where  an  interest  coupon  on  a  i)rincipal  note 
not  yet  due  is  sent  to  an  agent  for  collection  (that  being  the  extent 
of  his  express  authority),  the  principal  retaining  the  principal  note  and 
collateral  mortgage,  the  implied  authority  of  the  agent  is  limited  to  a 
resort  to  such  remedies  as  may  be  pursued  on  the  coupon,  irrespective 
of  the  collateral  mortgage.  It  may  be,  as  suggested  by  the  trial  court, 
that  foreclosure  is  the  usual  w^ay  of  collecting  debts  secured  by  mort- 
gage. If  so,  it  must  be  because  the  personal  pecuniary  irresponsibility 
of  the  mortgagors  renders  it  the  only  etTective  method.  But  that  is 
a  very  different  thing  from  holding  that  an  agent  employed  merely 
to  collect  a  coupon  for  interest  on  a  principal  note  not  yet  due  has 
implied  authority  to  foreclose  a  mortgage  which  his  principal  holds 
as  security  for  the  entire  debt.  There  is  no  proof  of  any  such  usage 
in  that  business,  unless  the  practice  of  the  Kelleys  proves  it.  But, 
fortunately,  the  business  methods  of  the  Kelleys  are  not  sufficient  to 
establish  a  general  custom  or  usage  with  reference  to  which  other  peo- 
ple are  presumed  to  contract. 

It  is  suggested  that,  under  the  registry  laws.  Wells  is  protected  as 
a  bona  fide  purchaser,  for  value,  because  Kelley's  title  appeared  per- 
fect of  record.  This  claim  might  be  urged  with  equal  force  if  one 
of  the  deeds  in  the  chain  of  title  had  been  forged.  This  case  illus- 
trates the  fact  that  our  system  of  registration  will  not  always  protect 
those  who  purchase  in  reliance  upon  the  public  records.  This  may 
be  partly  owing  to  defects  in  the  system,  and  in  part  owing  to  causes 
that  are  remediless  under  any  system.  The  defect  which  w^as  the  prin- 
cipal cause  of  trouble  in  this  case  w^as  remedied,  in  part  at  least,  by 
Gen.  Laws  1897,  c.  262,  which  requires  the  authority  of  an  attorney  to 
foreclose  a  mortgage  under  a  power  to  be  in  writing  and  recorded. 
The  suggestion  that  the  Kelleys  had  authority  to  foreclose,  because  the 
mortgage  provided  that  it  might  be  foreclosed  by  the  mortgagee,  her 
"attorney  or  agent,"  is  not  entitled  to  extended  notice.  If  the  per- 
son assuming  to  foreclose  had  no  authority  to  do  so,  he  was  not  the 
agent  of  the  mortgagee  for  any  such  purpose.  The  defendant  Wells 
is  unfortunately  the  victim  of  the  fraud  and  dishonesty  of  the  Kel- 
leys, but  this  is  no  reason  why  the  plaintiff  should  be  deprived  of  her 
mortgage.    Order  reversed. 


/LoiA 


ov 


'^•'Jl  /. 


Ch.  1) 


naJture  and  extent 


CUM:MINS  v.  BEAUMONT. 

(Supreme  Court  of  Alabama,  ISSO.     68  Ala.  204.) 

SoMERViLLE,  J.  This  is  an  action  of  detinue,  brought  for  the  re- 
covery of  a  piano,  which  was  hired  by  the  appellant,  Cummins,  to  one 
Mrs.  Phillips,  and  by  her  sold  to  the  appellee,  Beaumont.  The  con- 
tract was  in  writing,  and  from  its  terms  was  a  mere  bailment,  and 
not  a  conditional  sale.  The  intention  of  the  parties,  as  expressed  in 
this  letting  for  hire,  is  evidently  to  repudiate  expressly  the  idea  of  a 
sale.  Mrs.  Phillips  was,  at  the  same  time,  constituted  by  Cummins 
as  his  agent  to  sell  pianos  and  organs ;    and  the  authority  was  also  ^ 

in  writing.     She  was  to  receive  commissions  on  all  sales  of  them,  andn  j  JJP^'viA-Aj^ 


/ 


llU4A(^ 


"to  make  all  orders  for  the  same  to  said  Cummins" ;   and  it  was  fur- 
ther provided,  that  "the  instruments  [were]  to  be  sent  direct  from  the 

factory."     The  appellee,  Beaumont,  purchased  the  piano  in  question-^ — 

from  Mrs.  Phillips,  paying  her  three  hundred  dollars  cash  for  it,  and 
without  any  notice  of  the  limited  agency,  or  her  want  of  authority^ 
to  sell ;    and  she  failed  to  pay  over  the  money  to  the  appellant.     She 
had  made  no  other  sales  to  any  one,  except  of  one  organ ;    and  this 
sale  was  known  to  Beaumont,  when  he  purchased. 

We  think  the  principle  must  control  here,  that  one  who  deals  with  /^  »  ^ 
an  agent,  is  bound  always,  at  his  peril,  to  ascertain  the  extent  of  his/^ 
authority.  Powell's  Adm'r  v.  Henry,  27  Ala.  612;  1  Brick.  Dig.  p.  55, 
§  35.  The  appellee,  when  he  made  the  purchase  in  question,  was  re- 
(juired  to  know  the  status  of  the  personal  property  sued  for  in  this 
action,  and  the  written  limitations  upon  the  agent's  authority  to  deal 
with  it.  Its  sale  by  Mrs.  Phillips  was  an  unauthorized  conversion,  and 
conferred  no  title  on  the  purchaser.  The  contract  of  letting  for  hire 
expressly  took  it  out  of  the  operation  of  the  other  agreement  author- 
izing sales  of  pianos  and  organs  on  certain  stipulated  conditions.  The 
exercise  of  proper  diligence,  by  inquiry,  might  have  led  to  this  knowl- 
edge. Furthermore,  it  was  clearly  contemplated,  by  the  contract  of 
agency,  that  the  agent  was  "to  make  all  orders"  to  the  principal  for 
such  instruments  as  might  be  sold,  and  tliAt  they  were  to  be  ship])ed 
"direct  from  tiie  factory"  by  the  principal.  I  A  knowledge  of  the  agency 
was,  in  law,  a  knowledge  of  the  contents  of|this  writing;  for  "the  vital 
principle  of  the  law  of  agency  lies  in  the  legal  identity  of  the  agent 
and  the  principal,  created  by  their  mutual  consent;"  and  a  principal 
is  not  boundVby  the  acts  of  his  agent,  who  transcends  the  scope  of 
his  authority.  \  1  Grecnl.  Ev.  §  59.''    And  such  powers  of  attorney  arc 

/ 
-In  Iliiiiil.n.  V.  r.uni:m<l  |l'.t(i:;|.  i'  K.  I'..  ::!»••.  s  ('om.  Cns.  li.VJ.  712  T..  .1. 
K.  T?.  GliC.  m  T.  L.  It.  r»K4,  .'■.1  WUly.  Itep.  (!'»!.».  reversed  on  other  ;,'r<iuii<l,s  in 
ll'XMl  2  K.  15.  10.  9  Colli.  Ciis.  2Ty\,  T',  L.  J.  K.  It.  (Kl!),  IM)  L.  T.  K.'Il  t.\.  S.» 
.S0.'{,  20  T.  L.  K.  .''.Its,  .72  Wkl.v.  I{«'|>.  •*><''.  "lu'  H..  iin  mi<lcr\vrltfr,  was  the  imt'iit 
«»f  ntlifr  uii<|fr\vrit«'rH  to  iiiMh'rwritc  jKiIicirs  in  ttii-ir  iiiirncs  iuul  on  liicir  l)c- 
half.  rurpiirtiiiu  to  art  n»  sncii  u>,'«nit.  he  undcrwroto  a  poliry,  miar.'inlfclu;: 
i'aviiK'iit  to  plaiiitilTs  liy  a  etrtain  cnnijiany  of  rcrtain  advances  injidt*  l)V  pl.iin 


1 


\ 


'2\y2  TiTK  AUTiioKiTY  (Part  2 

ordinarily  sulijoctcd  to  a  strict  construction,  so  as  to  preclude  all  au- 
thority not  expressly  given,  or  necessarily  to  be  inferred.  Bearing 
V.  Lightfoot,  16  Ala.  28;  Scarborough  v.  ReynoUls,  12  Ala.  252; 
Fisher  v.  Campbell.  9  Port.  210. 

The  circuit  court  erred  in  the  charge  given;    and  the  judgment  is 
reversed,  and  the  cause  remanded. 

tift".  B.  knew  the  ooiupany  was  iiiseoure,  but  was  personally  interested  in 
ITeepiii;:  it  afloat.  The  company  failed  to  repay.  Binuhani,  J.,  in  passin;^ 
ui>on  the  authority  conferriHl  hy  1h(>  doeunients  of  ai)pointnu'nt  of  the  a.i,'eii1, 
says:  "The  niamhite  authorizes  the  making  of  contracts  for  and  on  behalf  of 
the  principals.  It  does  not  authorize  the  making  of  contracts  for  and  on  be- 
half of  the  auent.  No  doubt  there  are  many  cases  in  which  a  general  aj^ent 
to  make  contracts  of  a  certain  klTid  has  been  held  to  bind  his  princiiial  by 
a  ctnitract  of  that  kind,  though  made  for  his  own  purposes.  But  all  such 
eases  proceed  upon  (he  doctrine  of  estoppel  by  holding  out.  They  are  eases 
In  which  the  other  contracting  party  lu\s  been  induced  to  enter  into  the  con- 
tract by  a  representation  made  to  him  by  the  principal  that  the  agent's  acts 
were  authorized.  I  can  find  no  case  where  the  extent  of  the  authority  of  a 
general  agent  not  held  out  as  such  has  been  measured  by  anything  outside  or 
beyond  the  actual  terms  in  w^hich  the  agency  is  created.  Sometimes,  in  order 
to  ascertain  whether  the  principal  is  liable,  the  question  is  asked  whether 
what  the  agent  has  done  is  within  'the  scope'  of  his  employment.  It  is  in  my 
opinion  a  loose  and  unsatisfactory  test  of  the  liability ;  but,  applying  it  in 
this  case,  I  am  satisfied  that  what  Barnard  did  was  not  within  the  scope 
of  his  employment.  It  was  to  his  own  knowledge  wholly  without  its  scope. 
Nor  is  the  case  one  of  negligent  or  of  tortious  conduct  in  carrying  out  the 
agency  intrusted  to  him.  If  it  were,  some  liability  might  fall  on  the  de- 
fendants. The  making  of  the  contract  sued  on  was  a  wilful  act  not  done  in 
carrying  out  the  agency  at  all,  but  done  wholly  outside  it.  In  my  view  P>ur- 
nand  had  no  more  right  to  sign  this  policy  on  the  defendants'  behalf  than  he 
had  to  forge  their  signatures  to  it.  Again,  it  is  sometimes  said  that  where 
one  of  two  innocent  parties  must  suffer  from  the  fraud  of  a  third  person,  he 
who  has  enabled  the  third  party  to  commit  the  wrong  ought  to  bear  the  loss. 
I  do  not  think  this  test  is  applicable  to  the  present  case,  where  the  only  ques- 
tion is  one  of  authority.  Rut  even  if  it  were  applicable,  it  would,  in  my  opin- 
ion, be  wrong  to  say  that  the  defendants  had  in  fact  enabled  Buruand  to 
commit  the  fraud.  All  they  had  done  was  to  authorize  him  to  underwrite 
risks  for  them ;  and  the  giving  of  such  authority  afforded  him  no  additional 
facility  for  committing  frauds.  Then,  again,  it  is  said  that  even  if  the  plain- 
tiffs had  asked  to  see  the  authorities,  and  had  read  them,  they  had  no  means 
of  ascertaining  whether  the  policies  were  issued  for  the  benefit  of  the  princi- 
pals or  not.  That  may  be  true.  But  my  answer  is,  that  a  man  is  not  to  be 
held  liable  because  it  has  been  diflicult  or  even  impossible  to  ascertain  wheth- 
er he  was  liable  or  not.  If  a  person  contracts  with  an  agent,  it  is  for  him  to 
see  as  best  he  can  that  the  agent  is  acting  wathin  his  authority.  If  the  au- 
thority exists  by  reason  of  a  holding  out,  then  the  person  making  the  con- 
tract must  take  care  that  the  agent  does  nothing  which  the  holding  out  does 
not  warrant;  if  the  authority  does  not  arise  from  a  holding  out,  then  care 
must  be  taken  to  see  that  what  is  being  done  is  within  the  terms  of  the  actual 
authority.  It  is  often  dilficult,  or  inconvenient,  or  impolitic  to  make  inquiries 
about  an  agent's  authority,  but  that  circumstance  does  not  make  the  princi- 
pal lial)le  where  he  is  otherwise  not  liable.  The  other  contracting  party  takes 
the  risk,  and,  though  now  and  then  it  turns  out  that  the  risk  is  serious  and 
real,  the  event  is  not  of  sufficient  frequency  to  interfere  with  bu.siness.  The 
\iew,  then,  that  I  take  of  this  case  is  that  the  plaintiffs  are  not  entitled  to 
rely  on  any  authority  except  such  as  is  to  be  found  in  the  documents;  that 
the  authority  to  be  there  found  is  limited  to  the  making  of  policies  'for'  the 
defendants;  that  the  policy  sued  on  was  not  made  'for'  the  defendants,  and 
that  therefore  they  are  not  bound  by  it.  In  shorter  words,  I  think  it  is  the 
plaintifTs  whom  Buniard  cheated  and  not  the  defendants,  and  that  the  loss 
must  lie  where  it  has  fallen.  The  law  is,  I  think,  accurately  stated  in  Story 
on  Agency,  §  1.33,  at  page  149  of  the  9th  edition :    'Where  the  agency  is  not 


Ch.  1)  NATURE    AND    EXTENT  ^..^  JT^       293 

MUSSEY  V.  BEECHER. 

(Supreme  Judicial  Court  of  Massachusetts,  1849.     3  Cush.  511.) 

Shaw,  C.  J.  This  is  an  action  of  assumpsit  for  goods  sold  and 
delivered,  which  are  alleged  to  have  been  purchased  of  the  plaintiflf  by 
the  defendant,  through  the  agency  of  William  Pierce,  acting  under  a 
power  of  attorney  from  the  defendant.  The  question  is  upon  the  legal 
construction  of  the  defendant's  power  of  attorney  to  Pierce,  which  is 
in  writing,  and  is  stated  at  large  in  the  report.  To  this  power  was 
annexed  the  following  proviso:  "Provided,  however,  that  said  Pierce 
shall  not  make  purchases  or  incur  debts  exceeding  in  amount  at  any 
one  time  the  sum  of  two  thousand  dollars,  and  also  that  this  power 
or  agency  shall  not  extend  for  a  period  of  time  beyond  January  1st, 
1842."  The  power  was  afterwards  extended  by  a  memorandum  to  the 
1st  of  January,  1843. 

The  presumption  is,  that  the  plaintift  knew  of  the  terms  of  this  pow- 
er and  of  its  limitation,  before  he  sold  goods  to  Pierce,  on  the  strength 
of  it,  and  on  the  credit  of  the  defendant ;  and,  indeed,  the  evidence  was, 
that  he  had  seen  the  instrument.  Various  questions  of  fact  were  sub- 
mitted to  the  jury  on  the  evidence,  as  to  the  extension  of  the  power,  or 

held  out  by  the  principal,  by  any  acts,  or  declarations,  or  implications,  to  be 
general  in  regard  to  the  particular  act  or  business,  it  must  from  necessity  be 
construed  according  to  its  real  nature  and  extent ;  and  the  other  party  must 
act  at  his  own  peril,  and  is  bound  to  inquire  into  the  nature  and  extent  of  the 
autliority  actually  conferred.  In  such  a  case  there  is  no  ground  to  coutend 
that  the  principal  ought  to  be  bound  by  the  acts  of  the  agent,  beyond  wliat 
he  has  apparently  authorized;  because  he  has  not  misled  the  confidence  of 
the  other  party  who  has  dealt  with  the  agent.  Each  party  is  equally  innocent; 
and  in  a  just  sense  it  cannot  be  said  that  tbe  principal  lias  enabled  the  agent  to 
practise  any  deception  upon  the  other  party.  The  duty  of  inquiring  then  is 
Incumlient  upon  such  party,  since  the  princi[)al  has  never  held  the  agent  out 
as  liaviii;,'  any  general  authority  whatsoever  in  the  premises.  And  if  he  trusts 
witliout  inquiry,  he  trusts  to  the  good  faith  of  the  agent  and  not  to  that  of  the 
principal.'  " 

See,  also,  Deffenbaugh  v.  Jackson  Paper  Mfg.  Co.,  120  Mich.  242,  79  N.  W. 
197  (1899). 

In  a  recent  case,  the  trial  court,  having  instructed  the  jury  that  the  burden 
was  ui)on  the  jdaintiff  to  prove  that  his  agent  had  no  netual  authority  to  do 
the  thing  eomplained  of,  it  was  held  to  be  error.  The  court  said:  "The  court 
stated  to  the  jury  that  the  biirden  was  ui)on  plaintiff  to  prove  by  a  fair  pre- 
ponderanee  of  the  evidence  that  St\irm  had  no  actual  authority  to  do  the 
tiling  eom[ilained  of.  We  are  of  ojiiiiion  that  the  court  erred  in  this  instruc- 
tbm.  It  Is  elementary  that  the  power  of  an  agent  to  bind  his  jjrincipal  rests 
entirely  upon  the  authority  conferred  upon  him.  Without  sueh  authority,  for 
which  the  prineifial  himself  beeoiues,  by  art  or  cond<ict.  resi)onsible,  the  agent 
can  iiind  himself  only.  'Every  T)erson,  therefore,  who  undertakes  to  deal  with 
an  alleged  jment,  is  put  upon  inquiry,  and  must  discover  at  his  peril  that  sueh 
pretended  ai;ent  has  authority,  thjit  it  Is  in  its  nature  and  extent  sutlicieiit 
to  permit  him  to  do  the  pro|io.s(<l  act.  and  that  its  .source  can  be  traced  to  the 
will  of  the  alleged  principal.'  .'U  Cyc.  \'.\'1'1\  Ermentrruit  v.  Insurance  Co.. 
Pn',  Minn.  .'{()."),  (r.  X.  W.  r,;;.",,  .-^O  L.  H.  A.  .'M<;,  ,^0  Am.  St.  Rep.  IS]."  Dispatch 
Ptg.  Co.  V.  Nat.  r.nnk  of  Commerce.   109  Minn.  440.  124  N.  W.  2;{<!  (lOlO). 

See,  al.so,  Uosendorf  v.  Poling.  4S  W.  Va.  021.  .'{7  S.  E.  555  (1900);  Sbull  v. 
New  Bird.sall  Co.,  15  S.  D.  87,  m;  N.  W.  0.'»l  (1901). 


21)4  Tin:  miiiiiiuty  (Part  2 

a  waiver  of  the  limitation,  and  tlic  like;  l)ut  the  real  ([ue>lion  arises 
upon  the  eorreetiiess  of  the  iiislruetioiis,  in  matter  of  law. 

The  court  instruetecl  the  jury,  that  the  plaintiff  must  show,  that  such 
goods  were  soUl  under  the  power  to  Pierce,  as  his  agent,  and  not  upon 
the  personal  credit  of  Pierce :  and  that,  although  the  power  was  lim- 
ited, and  such  limitation  was  known  to  the  ])laintifif,  yet  that  the  de- 
fetulant  would  be  liable  for  Pierce's  purchases,  even  though  he  had 
already  exceeded  the  amount  authorized  by  the  power;  if  they  were 
satisfied,  from  the  evidence,  that,  at  the  time  of  the  purchases,  Pierce 
represented,  that  by  such  purchases  he  would  not  exceed  his  limit. 

In  another  connection,  the  same  instruction,  in  effect,  was  given, 
with  a  slight  variance  of  form,  as  follows:  "That  if  the  plaintiff  had 
inquired  of  Pierce  about  the  agency,  and  had  been  informed  by  him 
that  it  was  not  full,  and  he  had  no  reason  to  suspect  the  truth  of 
Pierce's  declaration,  and  if  the  plaintiff  then  sold  goods  to  Pierce,  as 
agent,  as  aforesaid,  the  defendant  would  be  liable  for  such  goods,  even 
though  the  agency  was  then  full." 

The  former  part  of  this  instruction,  that  it  must  appear,  that  the 
goods  were  not  sold  on  the  personal  credit  of  Pierce,  is  unquestionably 
correct ;  but,  in  regard  to  the  latter  part,  which  makes  the  defendant 
responsible  for  the  veracity  and  accuracy  of  Pierce,  a  majority  of  the 
court  are  of  opinion,  that  it  was  not  correct  in  point  of  law. 

This  power  of  attorney,  which  is  in  the  nature  of  a  letter  of  credit, 
is  precise  and  limited  in  amount ;  and,  though  it  contains  some  expres- 
sions, intimating  that  the  attorney  is  the  general  agent  of  the  con- 
stituent, to  purchase  and  sell  goods,  yet  this  is  controlled  by  the  pro- 
viso and  express  condition;  and,  taken  all  together,  as  every  written 
instrument  must  be,  it  is  an  authority  to  purchase  in  the  name  and  on 
the  credit  of  the  author  of  the  power,  to  the  amount  of  $2,000,  and  no 
more. 

The  precise  point  is  this,  whether,  if  Pierce,  through  design  or  mis- 
take, represented  to  the  plaintiff,  that  when  he  made  the  purchase  in 
question,  he  had  not  purchased  on  the  credit  of  his  principal  to  the 
amount  of  $2,000,  when,  in  truth,  his  purchases  exceeded  that  sum, 
the  defendant  was  bound  by  it.  It  is  unquestionably  true,  that  the 
statements  and  representations  of  an  agent,  in  transacting  the  business 
of  his  principal,  within  the  scope  of  his  authority,  are  as  binding  on 
his  principal,  as  any  other  acts  done  within  the  scope  of  his  authority; 
they  are  res  gestae,  and  are  acts.  But  an  agent  cannot  enlarge  his  au- 
thority any  more  by  his  declarations,  than  by  his  other  acts ;  and  the 
rule  is  clear,  that  the  acts  of  an  agent,  not  within  the  scope  of  his  au- 
thority, do  not  bind  the  principal.  It  is  often  said,  indeed,  that  one  is 
bound  by  the  acts  of  a  general  agent,  though  done  against  his  instruc- 
tions. This  is  because  the  acts  are  within  the  scope  of  his  authority ; 
and  the  violation  of  his  instructions,  in  the  execution  of  such  authori- 
ty, is  a  matter  solely  between  himself  and  his  principal,  which  can- 
not affect  a  stranger  dealing  with  Irm  without  express  notice. 


Ch.  1)  NATURE    AND    EXTENT  205 

The  argument  is,  that  the  defendant  ought  to  be  bound,  because 
Pierce  was  his  agent,  and  he,  by  his  letter  of  attorney,  had  put  it  in 
his  power  to  make  such  purchase.  This,  it  appears  to  us,  assumes  the 
very  point  to  be  proved.  The  plaintiff  knew  that  he  was  limited  to 
$2,000;  he  knew,  therefore,  that  if  he  had  purchased  to  that  amount, 
his  power,  by  its  own  limitation,  was  at  an  end.  If  it  were  otherwise, 
a  power  to  purchase  to  the  amount  of  $2,000,  would  operate  as  a  power 
to  purchase  to  an  unlimited  amount.  But  it  is  urged,  that,  upon  this 
construction,  no  one  could  safely  deal  with  the  agent.  This  objection, 
we  think  is  answered  by  the  consideration,  that  no  one  is  bound  to  deal 
with  the  agent ;  whoever  does  so  is  admonished  of  the  extent  and  lim- 
itation of  the  agent's  authority,  and  must,  at  his  own  peril,  ascertain 
the  fact,  upon  which  alone  the  authority  to  bind  the  constituent  de- 
pends. Under  an  authority  so  peculiar  and  limited,  it  is  not  to  be  pre- 
sumed that  one  would  deal  with  the  agent,  who  had  not  full  confidence 
in  his  honesty  and  veracity,  and  in  the  accuracy  of  his  books  and  ac- 
counts. To  this  extent,  the  seller  of  the  goods  trusts  the  agent,  and  if 
he  is  deceived  by  him,  he  has  no  right  to  complain  of  the  principal.  It 
is  he  himself,  and  not  the  principal,  who  trusts  the  agent  beyond  the 
expressed  limits  of  the  power;  and,  therefore,  the  maxim,  that  where 
one  of  two  innocent  persons  must  suffer,  he  who  reposed  confidence  in 
the  wrong-doer  must  bear  the  loss,  operates  in  favor  of  the  constituent, 
and  not  in  favor  of  the  seller  of  the  goods.  Parsons  v.  Armor,  3  Pet. 
413,  7  L.  Ed.  724;  Stainer  v.  Tysen,  3  Hill,  279;  Attwood  v.  Run- 
nings. 7  Barn.  &  Cr.  278.  The  case  of  Putnam  v.  Sullivan,  4  Mass. 
45,  3  Am.  Dec.  206.  was  decided  on  the  ground,  that  the  defendants, 
by  leaving  blank  indorsements  with  their  clerk,  had  authorized  him  by 
his  act  to  bind  them  as  indorsers. 

On  the  whole,  a  majority  of  the  court  are  of  opinion,  that  the  verdict 
must  be  set  aside,  and  a  new  trial  granted.* 


y^ 


GRAND  RAPIDS  ELECTRIC  CO.  v.  WALSH  MFCx.  CO. 

(Supreme  Court  of  Miehlgiui,  UK).".     142  Mich.  4,  105  N.  W.  1.) 

Assumpsit  for  goods  sold  and  delivered.  Defendant's  superintend- 
ent, Edsall,  ordered  of  plaintiff  a  dynamo  for  the  mill  of  which  he  was 
superintendent.  There  was  a  dynamo  in  the  mill,  and  the  defendant 
denied  iiis  authority  to  buy  one,  or  to  do  anything  but  oi)erate  the  mill, 
hire  and  discharge  the  men.  Plaintiff  knew  nothing  further  of  the 
authority  except  the  agent's  own  rei)rcseiitations,  Ills  business  card, 
and  the  letter  heads,  furnished  by  defendant  company  for  Edsall's 
correspondence,  on  which  appeared  "J-  C.  Edsall,  Supt."  Judgment 
for  plaititiff  and  defendant  brings  error.    Affirmed. 

••  Tlio  (>i>iiii<>ti  (.f  Wilde.  .T..   dlsscnf intr,   Is  niniltfd. 


/ 


CLu. 


■J 


J!)() 


Tnr,    AITIIORITY 


(Part  2 


f    .  \ 


111. AIR,  J."  *  *  *  Dofondaiirs  counsel  contend  that  a  party 
dealing  with  an  agent  is  bound  to  imiuire  into  the  extent  of  his  au- 
thority, ignorance  of  which  is  no  excuse.  This  is  undoubtedly  a  cor- 
s:^t  statement  of  a  general  principle  of  the  law  of  agency,  but  this 
riu^Nis  ryCt  to  be  applied  without  qualifications  and  under  all  circum- 
stances, f  It  is  equally  well  settled  that,  having  ascertained  the  general 
characteror  scope  of  the  agency,  the  party  is  authorized  to  rely  upon 
tiie  agent's  having  such  powers  as  naturally  and  properly  belong  to 
such  character,  and,  in  the  absence  of  circumstances  putting  him  upon 
inquiry,  is  not  bound  to  inquire  for  ^ret  qualifications  or  limitations 
of  the  apparent  powers  of  the  agent.  Jinglish  v.  Ayer,  79  Mich.  516, 
44  N.  W.  942;  Allis  v.  Voigt,  90  Mi<^.  125,  51  N.  W.  190;  Austrian 
&  Co.  V.  Springer,  94  Mich.  343,  54  N.  W.  50,  34  Am.  St.  Rep.  350. 
c —  The  legitimate  powers  of  a  general  agent,  in  the  absence  of  known 
/  limitations,  must  depend  largely  upon  the  circumstances  of  each  par- 
'  ticular  case,  and  usually  present  questions  of  fact  for  the  determination 
of  a  jury.  The  apparent  right  of  the  superintendent  and  general  man- 
ager of  a  small  business  to  make  a  purchase  of  machinery  costing  over 
$600  might  be  quite  different  from  the  right  of  the  superintendent 
of  a  large  business  to  make  the  same  expenditure.  The  defendant 
company  was  a  foreign  corporation,  carrying  on,  through  Edsall,  as  its 
local  representative,  extensive  business  enterprises  at  Frederic,  con- 
sisting of  a  large  heading  mill  and  auxiliary  lumber  camps,  an  opera 
house,  and^a  general  store,  employing  many  men,  of  all  of  which,  as 
we  undersiand  the  record,  Edsall  was  the  superintendent  and  general 
manager.  .  We  do  not  think  it  can  be  said,  as  a  matter  of  law,  that 
the  purchase  of  the  dynamo  which  was  necessary  for  the  lighting 
of  the  plant  was  so  clearly  outside  of  the  apparent  powers  with  which 
defendant  had  clothed  Edsall  as  to  justify  the  court  in  directing  a 
verdict  for  defendant.  We  therefore  think  thai  the  court  committed 
no  error  in  submitting  the  question  to  the  juryi_*     *    * 


L 


ij^jj-^  MOORES  V.  CITIZENS'  NA;r.  BANK. 

(Circuit  Court  of  the  United  States,  S.  D.  Ohip;  W.  D.,  1883.     15  Fed.  141.) 

Robt.  B.  Moores  was  cashier  of  defendant  bank.  Plaintiff  loaned 
him  $9,100,  for  which  he  assigned  to  her  91  shares  of  stock  in  de- 
fendant bank,  which  he  claimed  to  own.  As  a  matter  of  fact,  he 
had  previously  transferred  to  other  parties  all  his  shares,  but  neither 
plaintiff  nor  defendant  knew  of  the  cashier's  fraud  for  some  years. 
He  is  now  insolvent,  and  defendant  bank  declines  to  recognize  plain- 
tiff as  a  stockholder,  and  denies  to  her  all  rights  pertaining  to  that  rela- 
tion. 


6  ]  art  of  the  opinion  is  omitted. 


Ch.  1)  NATURE    AND    EXTENT  297 

Baxter,  J.«  *  *  *  But  it  must  be  borne  in  mind  that  Moores, 
in  his  efforts  and  negotiations  to  borrow,  was  acting  for  himself  and 
not  as  cashier  of  the  bank.  His  representations  that  he  was  the  owner 
of  a  large  amount  of  defendant's  capital  stock  were  not  official  rep- 
resentations, and  cannot,  upon  any  principle  of  law  known  to  this 
court,  bind  the  bank.  They  were  but  the  representations  of  an  indi- 
vidual, contending  with  pecuniary  embarrassments,  and  if  believed  to 
be  true  and  acted  upon  by  the  plaintiff,  and  loss  resulted  therefrom, 
the  bank  is  in  no  way  responsible  for  the  same.  As  cashier,  he  was 
but  the  agent  of  the  defendant,  and  could  only  bind  it  within  the  scope 
of  his  authority,  and  in  the  regular  course  of  business.  But  Moores, 
when  assuming  to  borrow  money,  either  for  himself  or  his  friends, 
was  acting  for  himself,  in  a  matter  in  which  the  bank  had  no  inter- 
est, and  it  therefore  cannot  be  affected  by  anything  that  he  may  have 
promised  or  said,  as  an  inducement  to  make  the  loan. 

If  plaintiff"  relied  on  such  representations,  as  she  evidently  did,  and 
the  same  turned  out  to  be  false,  the  defendant  is  under  no  legal  obli- 
gation to  make  good  the  loss.  This  much  will  not  be  seriously  ques- 
tioned by  the  plaintiff's  counsel.  But  they  say  that,  as  cashier,  he 
was  intrusted  with  the  custody  of  tljie  defendant's  certificate-book, 
containing  blank  certificates  signed  by  the  president,  and  that  he  was, 
as  cashier,  authorized  to  accept  and  cancel  surrendered  certificates, 
transfer  the  same,  and  issue  new  certificates  to  transferees,  and  that 
such  service  came  within  the  scope  of  his  agency ;  that  the  issuance 
by  him  of  the  certificate  held  by  the  plaintiff,  and  constituting  the 
foundation  of  this  action,  was  an  official  act  within  the  scope  of  his 
special  duties;  and  that  he,  having  afterwards  obtained  a  loan  or  ad- 
vance of  money  from  the  plaintiff  upon  the  faith  of  its  regularity  and 
genuineness,  and  in  ignorance  of  its  spurious  and  fraudulent  character, 
perpetrated  a  wrong  for  which  the  defendant,  the  bank,  who  clothed 
him  with  the  power  to  inflict  the  injury,  is  justly  and  legally  amenable. 

It  may,  as  we  have  already  said  for  the  sake  of  the  argument,  be 
conceded  that  money  loaned  or  advanced  by  an  innocent  party,  upon 
the  faith  of  such  a  certificate,  could  be  recovered  from  the  corpo- 
ration. But  is  the  plaintiff,  in  the  eye  of  the  law,  such  an  innocent 
person  ?  These  terms  have  in  law  a  technical  meaning.  Ignorance 
of  facts,  which  the  law  under  the  circumstances  of  the  particular  case 
requires  a  party  to  know,  does  not  excuse  the  want  of  diligence  or 
throw  around  the  party  the  immunity  which  attaches  to  persons  ex- 
empt from  all  laches  or  blame.  In  other  words,  if  there  is  any  fact 
which,  in  contemplation  of  law,  puts  a  party  on  inquiry,  and  he  fails 
to  make  the  investigation  which,  if  made,  would  develop  the  fraud, 
he  is  to  be  treated  in  all  respects  as  if  he  had  actual  knowledge  of 
the  facts. 

•  Part  of  the  opinion  Is  omitted. 


-08  Tin;  AriiioKiTY  (Part  2 

There  is  another  j-irinciple  of  law  apphealtle  to  this  case.  An  ap^ent 
cannot  lawfully  act  in  the  same  matter  for  his  principal  and  for  him- 
self, in  cases  wherein  their  interests  arc  adverse  to  each  other. ^  To 
illustrate:  If  a  cashier  were  to  draw  a  check  /;/  his  otch  favor,  and 
then,  as  cashier,  certify  for  the  hank  that  the  check  was  j^ood,  and 
he  hatl  funds  in  the  bank  to  meet  it,  the  hank  would  be  bound  to  pay 
it  upon  proper  indorsement  and  presentation.  JUu  if,  in  point  of  fact, 
he  had  no  funds  in  the  bank  to  check  upon,  the  bank  could  not 
be  held  liable  upon  his  certificate,  although  made  in  his  capacity  of 
cashier  of  the  bank,  notwithstanding  the  party  suing  the  bank  may 
have  in  good  faith,  bought  the  check  in  the  belief,  predicated  on  the 
cashier's  certificate,  that  the  check  w^as  drawn  against  a  fund  in  the 
hands  of  the  bank,  and  that  it  was  good  and  would  be  paid  on  proper 
j)resentation.  Yet,  if  such  check  was  drawn  in  favor  of  a  stranger, 
and  certified  by  the  cashier  to  be  good,  his  bank  would  be  legally  bound 
and  liable  thereon.  The  reason  wdiy  the  bank  is  not  liable  for  a  check 
drawn  by  a  cashier  in  his  own  favor  and  certified  to  be  good,  even  in 
the  hands  of  one  buying  it  in  good  faith  and  in  ignorance  of  any  fraud, 
has  been  stated.  An  agent  cannot  act  for  his  principal  and  himself 
in  matters  in  which  they  have  adverse  interests,  and  every  one  pur- 
chasing such  a  check  is,  upon  its  face,  admonished  by  the  law  of  the 
necessity  of  making  inquiry  into  the  fairness  and  good  faith  of  the 
transaction,  and  if  he  does  not  do  this,  however  honestly  he  may  rely 
on  the  integrity  of  the  agent,  the  loss  must  be  sustained  by  him. 

Now,  is  this  principle  applicable  to  the  facts  of  this  case?  Keep 
in  mind  that  the  plaintiff  was  dealing  with  Moores,  the  cashier,  in 
his  individual  capacity.  She  agreed  to  loan  her  money  to  him  on 
condition  that  he  would  have  a  certificate  issued  to  her  for  91  shares 
of  the  defendant's  capital  stock.  He  undertook  to  do  this.  The  un- 
dertaking was  for  his  own  benefit,  in  order  to  enable  him  to  consum- 
mate the  loan.  He  had  possession  of  the  bank's  book  of  certificates. 
One  of  the  certificates  contained  therein  was  signed  by  the  president 
in  blank,  and  left  with  him  for  use  when  occasion  required  it.  He 
took  this,  and  without  authority,  without  consideration,  and  without 
the  knowledge  of  any  other  officer  of  the  bank,  filled  it  up  in  the 
plaintiff's  name  and  delivered  it  to  her,  with  the  contract  of  the  fif- 
teenth of  July,  1867,  as  a  security  for  the  repayment  of  the  money 
loaned.    This  certificate,  made  by  Moores  for  his  own  benefit,  is  filled 

7  Spo,  also,  Jacoby  v.  Payson,  8.5  Ilun,  .3()7,  .'^2  N.  Y.  Siipp.  10.32  (l.S9."i),  in 
which  the  afrent  applied  the  proceeds  of  a  check  to  the  payment  of  his  indi- 
vidual del)ts,  and  N.  Y.  Iron  Mine  v.  First  Nat.  Bank,  39  Mich.  G44  (1878),  in 
which  it  was  held  by  Cooley,  .7.,  that  the  fact  that  an  agent  of  large  powers 
drew  negotiable  paper  in  his  own  favor  should  have  put  the  bank  upon  inquiry 
as  to  his  authority  to  do  so.  When  a  party  dealing  with  an  agent  has  knowl- 
edge of  such  facts  as  will  put  him  on  inquiry  as  to  the  extent  of  the  agent's 
authuritj',  the  principal  \v\\\  not  be  bound  by  acts  not  contained  in  the  au- 
thoritv  conferred.  Taylor  Mfg.  Co.  v.  Brown,  4  WilLson,  Civ.  Cas.  Ct.  App. 
§  3,  p.  19,  14  .S.  W.  1071  (1889). 


Ch.  1)  NATURE    AXD    EXTENT  299 

up  in  his  handwriting  and  signed  by  him  as  cashier.  Now,  while  the 
plaintiff  relied  upon  his  honesty,  and  believed  that  the  certificate  had 
been  issued  in  good  faith  and  by  competent  authority,  she  knew  that 
in  issuing  it  Moores  was  acting  for  himself;  that  the  certificate  was 
issued  by  him  for  his  own  benefit,  to  be  used  for  the  purpose  and 
in  the  manner  stated.  This  knowledge,  we  think,  was  enough  to  put 
her  on  inquiry.  If  she  had  made  the  inquiry,  which  the  law  as  well 
as  prudential  reasons  required,  under  the  circumstances  of  this  case, 
Moores'  fraudulent  action  would  have  been  developed,  and  the  loss 
resulting  therefrom  avoided. 

Agents  intrusted  with  important  interests  and  invested  with  large 
powers  have  many  opportunities  for  an  abuse  of  their  trusts.  Nev- 
ertheless, if  their  fraudulent  acts  are  within  the  scope  of  their  agen- 
cies, and  a  loss  must  result  either  to  their  principals  or  to  an  inno- 
cent person,  who  relied  upon  their  action  in  the  belief  that  the  same 
was  valid,  the  law  would  cast  the  loss  upon  the  principal  who  selected 
and  placed  the  agent  in  the  position  to  do  the  wrong,  and  not  on  the 
innocent  party.  But  if  the  complaining  party  knows,  when  accept- 
ing a  check,  certificate  of  stock,  receipt,  or  other  acquittance  or  obli- 
gation, issued  or  executed  by  the  agent  in  the  name  of  the  principal, 
that  he  was  acting  in  regard  thereto  for  himself  and  in  his  own  in- 
terest, such  knowledge  would  put  such  party  on  inquiry,  and  divest 
him  or  her  of  the  legal  rights  and  incidents  pertaining  to  that  class 
of  persons. 

The  plaintiff  having  had  knowledge  of  the  fact  that  Moores,  upon 
whom  she  relied  to  have  the  stock  transferred  to  her,  was  acting  for 
himself  as  well  as  in  his  capacity  of  cashier — that  is,  acting  for  the 
bank  upon  one  side  and  for  himself  on  the  other,  in  reference  to  the 
matter  of  issuing  this  certificate — she  is  not,  in  the  judgment  of  this 
court,  an  innocent  holder  of  the  stock;  and  as  the  certificate  was  is- 
sued without  authority  and  in  fraud  of  the  rights  of  the  bank,  the 
court  instructs  you  that  the  plaintiff  is  not  entitled  to  recover  in  this 
action.    Your  verdict  will  therefore  be  for  the  defendant. 


;?00  Tuii3  AUTiioKiTY  (Part  2 

SECTION  2.— AUTHORITY  AND  INSTRUCTIONS 
I.  In  Gi:ni:rai< 


GRIGGS  V.  SELDEN.» 

(Supreme  Court  of  Vermont,  1886.    58  Vt  561,  5  Atl.  504.) 

Assumpsit  for  leather  ordered  by  one  Gibson,  who  was  the  agent 
of  defendant  to  manage  her  custom  business  in  boots  and  shoes.  He 
iiad  no  express  authority  to  buy,  but  had  on  one  occasion  been  per- 
mitted by  letter  of  defendant  to  buy  a  bill  of  plaintiff,  and  the  latter 
supposed  he  had  authority  in  the  present  case.  The  matter  was  sub- 
»      ^    mitted  to  a  referee. 

r^  ^   RowELL,  J.     The  referee  has  found  a  fact,  if  it  is  a  question  of 

.    ^     I  fact,  as  it  certainly  is  (Sessions  v.  Newport,  23  Vt.  9),  that  the  plaintiff 

'    was  justified  in  his  belief  that  Gibson,  in  carrying  on  the  business,  and 

•^    J,  making  purchases  and  sales,  "had  the  usual  authority  of  an  agent  who 

Vj^      ■     had  the  sole  management  of  the  business."    He  further  finds  that  the 

defendant  "held  out"  Gibson  as  her  agent,  which  was  known  to  the 

\  plaintiff,  and  acted  upon  by  him  in  good  faith,  j  This  finding  makes 

V^  the  defendant  liable,  on  the  ground  that  if  one  iolds  another  out  to 

the  world,  and  accredits  him  as  his  agent,  he  is  bound  by  th2^  person's 

acts  done  within  the  scope  of  the  agency  thus  given  to  him|  In  such 

*-  cases  the  question  is  not  what  authority  was  intended  to  \)^  given  to 

the  agent,  but  what  authority  was  the  third  person  dealing  with  him 

justified,  from  the  acts  of  the  principal,  in  believing  was  given  to  him. 

1  Amer.  Lead.  Gas.  568;  Story,  Ag.  &  127,  note  2.» 

Judgment  affirmed. 

8  Approved  in  AUlrich  v.  Wilmarth,  3  S.  D.  523,  54  N.  W.  811  (1893).  See, 
also,  Welch  v.  Clifton  Mfg.  Co.,  55  S.  C.  568,  33  S.  E.  739  (1899). 

9  In  Brooke  v.  N.  Y.,  L.  E.  &  W.  R.  Co.,  108  Pa.  529,  1  Atl.  206,  56  Am.  Rep. 
2.35  (18S5),  the  doctrine  was  laid  down  that  "as  between  principal  and  third 
parties,  the  true  limit  of  the  agent's  authority  to  bind  the  former  is  the  ap- 
parent authority  with  which  the  agent  is  invested;  but  as  between  the  prin- 
cipal and  the  agent  the  true  limit  is  the  express  authority,  or  instruction, 
given  to  the  agent.  The  principal  is  bound  by  all  the  acts  of  his  agent  with- 
in the  scope  of  the  authority  which  he  held  him  out  to  the  world  to  possess, 
notwithstanding  the  agent  acted  contrary  to  instructions."  Private  restric- 
tions cannot  affect  third  persons.  Baker  v.  K.  C,  St  J.  &  C.  B.  Ry.  Co.,  91 
Mo.  152,  3  S.  W.  486  (1886). 


/. 


Ch.l) 


NATURE   AND    EXTENT 


301 


HAUBELT  BROS.  v.  REA  &  PAGE  MILL  CO. 
(Kansas  City  Court  of  Appeals,  Missouri,  1898.    77  Mo.  App.  672.) 

Plaintiffs  were  retail  grocers.  Defendant  manufactured  flour.  One 
Gardner,  a  broker,  at  plaintiffs'  request,  telegraphed  defendant  for 
quotations  on  flour.  Defendant  wrote,  naming  a  price  of  $3.95  per 
barrel,  and  at  the  same  time  telegraphed.  By  error  in  transmission, 
the  telegram  read  $3.25,  and  on  receipt  of  the  telegram,  without  wait- 
ing for  the  letter,  Gardner  sold  plaintiff  a  car  load  at  S3.25. 

Smith,  J."  *  *  *  Immediately  on  receipt  of  this  letter,  Gard- 
ner wired  defendant  that  he  had  sold  the  flour  at  three  dollars  and 
twenty-five  cents.  The  defendant,  immediately,  on  the  same  day, 
wired  Gardner  that  it  would  not  fill  the  orders  at  any  such  figures. 
Gardner  immediately  investigated  the  matter  and  ascertained  at  once 
that  the  price  in  the  telegram  should  have  been  three  dollars  and  nine- 
ty-five cents  per  barrel. 

After  ascertaining  this  fact,  Gardner  on  the  same  day  wrote  a  letter 
to  the  defendant  referring  to  the  sale  of  the  flour  and  to  the  mistake 
in  the  price,  and  inclosing  the  memorandum  of  the  sale  hereinbefore 
set  forth.  At  the  time  the  sale  was  made  flour  of  all  grades  was  ad- 
vancing in  price  at  Brenham,  and  continued  to  advance  until  after  the 
time  the  flour  in  question  ought  to  have  been  delivered,  and  at  the 
time  delivery  should  have  been  made,  the  flour  contracted  was  worth, 
on  the  Brenham  market,  the  sum  of  $4.05  per  barrel,  and  all  other 
grades  had  made  the  same  proportionate  advance,  so  that  it  was  impos- 
sible for  plaintiffs  to  have  purchased  any  grade  of  flour  without  having 
sustained  a  loss.  Plaintiffs  testified  that  they  finally  had  to  buy  flour. 
and  pay  $4.40  per  barrel  in  order  to  supply  his  trade.  The  plaintiffs 
further  testified  on  the  trial  of  said  cause  that,  when  they  bought  the 
flour  from  said  Gardner,  the  contract  was  that  they  were  to  have  a 
credit  of  forty-five  days,  or  one  and  one-half  per  cent  off  for  cash,  and 
that  the  flour  was  to  be  shipped  in  ten  days. 

The  plaintiffs  by  their  appeal  question  the  propriety  of  the  action 
of  the  trial  court  in  sustaining  the  demurrer  to  the  evidence  adduced. 
The  defendant  insists  that  there  was  not  shown  in  evidence  any  such 
memorandum  of  the  sale  as  meets  the  requirements  of  the  statute  of 
frauds  and  therefore  the  demurrer  was  properly  sustained.  An  agent 
is  a  competent  witness  to  establish  his  own  agency.  Leete  v.  Bank, 
115  Mo.  204.  21  S.  W.  788;  Pump  Co.  v.  Green,  31  Mo.  App.  269. 
His  agency  may  be  implied  from  the  conduct  and  acquiescence  of  the 
principal.  vSharp  v.  Knox,  48  Mo.  App.  169;  Cummin/s  v.  Ilurd,  49 
Mo.  App.  139.  And  it  may  be  slated  as  a  general  rul/that  wherever 
a  person  has  held  out  another  as  his  agent,  authorizcf^to  act  for  him 
in  a  given  capacity,  or  has  knowingly  and  without  dissent  i)cnnille(i 
such  other  to  act  as  his  agent  in  such  capacity,  or  where  his  habits  and 

10  r.irl  of  the  opinion  is  oiuitlfMl. 


iK,JAyC(^ 


^jiAS^^ 


7UA> 


:}i)2 


TIIK    AUTIUHJITY 


(Part  2 


^^oursc  of  dealing  have  been  such  as  lo  reasoiiaMy  warrant  the  pre- 
sumption that  such  other  was  his  agent  authorized  to  act  in  that  ca- 
pacity, whether  it  be  a  single  transaction  or  a  series  of  transactions, 
his  authority  to  act  for  him  in  that  capacity  will  be  conclusively  pre- 
sumed so  far  as  it  may  be  necessary  to  pr(-)tect  the  rights  of  third  per- 
sons who  have  relied  thereon  in  good  faith  and  in  the  exercise  of  rea- 
sonable prudence ;  and  he  will  not  be  permitted  to  deny  that  such  other 
was  his  agent  authorized  to  do  the  act  he  assumed  to  do,  provided  thatX 
sucjijict  is  within  the  real  or  ai)parent  scope  of  the  presumed  authority,  j 
mson  v.  Hurley,  115  Mo.  513,  22  S.  W.  492  (quoting  Mechem  oi>/ 
Agency) ;  Rice  v.  Groffmann,  56  IMo.  434 ;  Summerville  v.  Railway,  62 
Mo.  391.  And  it  seems  well  settled  in  the  law  of  agency  that  where  it 
appears  that  an  agent  had  repeatedly  performed  acts  like  the  one  in 
question,  which  the  principal  has  ratified  and  adopted,  his  authority  for 
the  performance  of  the  disputed  act  may  be  inferred.  Cummings  v. 
Hurd,  49  Mo.  App.  loc.  cit.  139,  and  cases  there  cited.  Gardner  testified 
that  he  had  been  acting  as  agent  of  defendant  for  a  number  of  years  in 
making  sale  of  the  latter's  flour  and  that  his  contracts  as  such  had  al- 
ways been  carried  out  by  such  latter.  He  further  testified  that  he  sold 
and  handled  the  defendant's  flour  as  a  broker  on  commission,  and  that 
his  orders  were  always  promptly  filled.  One  of  the  plaintiffs  testified 
that  he  had  bought  flour  of  Gardner  regularly  for  three  or  four  years 
as  agent  of  defendant  and  the  contracts  so  made  with  him  had  always 
been  promptly  complied  with  by  defendant.  In  the  light  of  the  pre- 
cedents just  referred  to  we  must  conclude  that  Gardner  was  the  agent 
of  the  defendant  authorized  to  make  the  sale  of  the  flour  to  plaintiffs. 
The  fact  that  Gardner  was  a  broker  selling  on  commission  rendered 
him  none  the  less  an  agent  of  defendant.  Tiedeman  on  Sales,  §§  271, 
272. 

Having  reached  the  conclusion  that  the  evidence  adduced  tends  to 
prove  that  Gardner  was  the  agent  of  the  defendant,  invested  with  the 
authority  to  enter  into  the  contract  with  the  plaintiffs  for  the  sale  of 
the  flour,  we  find  no  difficulty  in  reaching  the  further  conclusion  that 
the  signing  of  the  written  memorandum  thereof  by  Gardner  himself 
was  sufficient  to  meet  the  requirements  of  the  statute  of  frauds.  Such 
a  contract  may  be  signed  for  the  principal  by  a  person  thereunto  law- 
fully authorized,  and  though  the  agent  sign  his  own  name  alone  the 
principal  may  be  still  charged  by  parol  evidence.  The  rule,  of  course, 
is  otherwise  where  the  agent  enters  into  a  contract  in  his  own  name 
under  seal.    *    *    * 

Gardner  offered  and  sold  the  plaintiffs  the  flour  in  accordance  with  . 
the  authority  conferred  upon  him  by  the  telegram  of  the  defendant. 
He  acted  within  the  scope  of  that  authority  in  making  the  sale  to  the 
plaintiffs.  The  plaintiffs  appear  to  have  purchased  in  good  faith  and 
are  not  to  be  affected  by  the  communications  had  prior  thereto  be- 
tween the  defendant  and  its  agent.  It  seems  to  us  that  the  plaintiffs 
made  out  a  prima  facie  case  entitling  them  to  a  submission,  and  there- 


Ch.  1) 


fore  the  action  of  the  court  -in  sustaining  the  demurrer  to  the  evi- 
dence was  such  an  error  as  requires  a  reversal  of  the  judgment,  which 
is  ordered  accordingly.     All  concur./ 


II.  Secret  Ixstkihtions 


LUDLOW-SAYLOR  WIRE  CO.  v.  FRIBLEY. 

(Supreme  Coiut  of  Kansas,  1903.    67  Kan.  710,  74  Pac.  237.) 

Pollock,  J.  The  traveling  salesman  of  plaintiff  sold  defendant 
company  1,500  bales  of  wire  ties,  and  reported  such  sale  to  have  been 
made  at  the  price  of  $1.10  per  bale,  f.  o.  b.  the  cars  Baxter  Springs. 
This  sale  was  made  in  February,  payment  to  be  made  Alay  1st.  De- 
fendant paid  on  the  purchase  price  $1,425,  leaving  a  balance  due,  as 
shown  by  the  account  of  plaintiff,  of  $225.  This  action  was  brought  on 
a  verified  account  of  the  transaction  to  recover  the  remainder  of  the 
purchase  price.  By  verified  denial,  defendant  put  in  issue  the  correct- 
ness of  the  account,  and  also  alleged  as  a  complete  defense  the  fact  that 
the  traveling  salesman,  as  agent  of  plaintiff,  duly  authorized  thereto, 
had  guarantied  the  price  of  the  goods  purchased  as  of  the  date  of  pay- 
ment, May  1,  1900;  that  the  price  of  like  goods  f.  o.  b.  the  cars  Baxter 
Springs,  May  1,  1900,  was  95  cents  per  bale,  and  not  $1.10,  as  demand- 
ed by  plaintiff,  and  alleged  the  full  payment  of  the  purchase  price  at 
such  figure.  By  proper  reply  the  authority  of  the  agent  to  attach  such 
condition  to  the  sale  was  put  in  issue.  Defendant  offered  no  defense  in 
supj)ort  of  the  authority  of  plaintiff's  agent  to  guarantee  the  price. 
There  was  judgment  for  defendant.     Plaintiff  brings  error. 

The  sole  question  is,  was  the  general  authority  of  plaintiff's  agent 
as  traveling  salesman,  in  the  absence  of  notice  to  the  contrary  on  the 
part  of  defendant,  as  a  matter  of  law,  sufficient  to  bind  plaintiff  to  the 
concHtions  attached  to  the  contract  of  sale  as  pleaded?  Tlie  trial  court 
so  instructed.  The  sale  of  tiie  goods  out  of  which  this  controversy 
arose  fell  directly  within  tlie  scope  of  the  agent's  authority.  /  While 
that  authority  may,  as  Ijctwccn  the  agent  and  his  princijial,  have  been 
limited,  and  the  agent  rcs])onsiblc  to  his  i)rincipal  for  exceeding  its 
bounds,  yet,  as  between  i)laintiff  and  defendant,  as  no  limitation  upon 
the  agent's  authority  vas  known  to  defendant,  and  as  the  agent  acted 
within  the  a|)parent  scV)pe  of  his  authority,  the  conditions  attached  to 
the  sale  bf)und  plaintiriy  I>abcf)ck  v.  Dcford,  14  Kan.  411;  Banks  v. 
Everest  &  Waggcner,  }S  Kan.  6.S7,  12  Pac.  141.^^ 

It  follows  that  the  juflgment  must  be  affirmed. 

""ii  Tt  woulil  lie  fl.iiiKcroiis  to  linld  (li.it  a  pcrsini  wlio  Invcsls  an  n^'ciit  willi 
an  aiiparcnt  antlmrity  could  limit  tliat  anlliority  by  a  secret  n'scrvjilion. 
Kdnniiids  v.  IUisIm^H.  L.  U.  1  <^  I'..  !»7,  VI  .Inr.  N.  S.  331i,  3r)  L.  J.  C^  \\.  liO  dSdr.), 
per  Mclliir,  .1.  Sik-Ii  a  nilt>  would  I  c  llic  licii^lit  of  liijusticc.  and  lead  tn  tin; 
jrrossost  frauds.  Western  H.  &  f.  Co.  v.  I?ank.  9  N.  M.  1.  47  Tac.  7-'l  ()S'.l7). 
."^pcdfic  iiistnictlriii"^   (if   flic    priijciiial    tu    tlic   au'ciil    can    have   no   (•Il'('''l   on 


f. 


? 


(7'\ 


THE   AUTUORITT 


(Part  2 


III.  Known  Limitations    ^ 
HUTSON  V.  PRUDENTIAL  INS.  CO.*' 


(Supreme  Court  of  Georgia,  1905.    122  Ga.  847,  50  S.  E.  1000.) 


Action  on  an  insurance  policy.  Exceptions  to  a  nonsuit.  A  premium 
due  August  1st  was  offered  to,  and  accepted  by,  the  general  agent  of 
the  company  September  11th,  and  another  payment  was  made  in  Oc- 
tober for  the  premium  due  November  1st.  Insured  died  November 
1st.  The  company  refused  to  pay  the  policy  and  returned  the  above- 
mentioned  payments. 

Evans,  J.  (after  stating  the  facts). f  There  was  evidence  tending  to 
establish  that  Adams  was  the  general  agent  of  the  company.  Assum- 
ing that  the  evidence  was  sufficient  to  establish  that  he  was,  did  he  |fe've 
authority  to  waive  any  of  the  forfeitures  stipulated  in  the  policy?!  It 
is  elemental  that  a  general  agent  may  bind  his  principa^^  with  respect 
to  all  matters  within  the  apparent  scope  of  his  authority .|  Underlying 
the  doctrine  of  the  liability  of  a  principal  for  the  acts  «£f 'his  agent, 
whether  general  or  special,  is  this  fundamental  princip)e:|  The  agent 
can  only  bind  his  principal  within  the  scope  of  his  agendy.  Private 
instructions  or  limitations  not  known  to  persons  dealing  with  an  agent 
who  assum*  to  act  within  the  apparent  scope  of  his  authority  cannot 
aft"ect  them.  I  In  special  agencies  for  a  particular  purpose,  persons  deal- 
ing wiih  the  agent  must  examine  his  authority.  Civ.  Code  1895,  § 
3023.  (a  g/neral  agency  does  not  necessarily  import  an  unqualified  au- 
thoritjato  act  for  and  in  behalf  of  his  principal  in  every  instance.    The 

third  persons,  having  no  notice  of  such  instructions.  Rohrhough  v.  U.  S. 
Exp.  Co.,  50  W.  Va.  148,  40  S.  E.  398,  88  Am.  St.  Rep.  849  (1901).  "The  au- 
thority of  the  agent  must  depend,  so  far  as  it  involves  the  rights  of  innocent 
tliird  persons  who  have  relied  thereon,  upon  the  character  bestowed,  rather 
than  on  the  instructions  given."  Austrian  v.  Springer,  94  Mich.  343,  54  N.  W. 
50,  34  Am.  St.  Rep.  350  (1892).  Even  a  special  agent  who  acts  within  his  ap- 
parent power  binds  his  principal,  even  though  he  acts  contrary  to  private  in- 
structions which  limit  his  special  authority.  Howell  v.  Graff,  25  Neb.  l-'JO, 
41  X.  W.  142  (1S8S).  A  principal  cannot  escape  liability  by  secret  understand- 
ings with  his  agent  of  which  the  public  can  have  no  knowledge.  Hall  v.  Union 
Central  Life  Insurance  Co.,  23  Wash.  610,  63  Pac.  505,  51  L.  R.  A.  288,  83  Am. 
St.  Rep.  844  (1900). 

Limitations  printed  in  Latin,  and  not  made  known  to  the  public,  cannot 
affect  the  princijiaPs  lial)ility  to  tlilrd  persons.  Catholic  Bishop  v.  Troup,  01 
111.  App.  641  (189.5).  By-laws  of  business  corporations  are,  as  to  third  persons, 
private  regulations  of  no  force  as  limitations  upon  acts  of  agents  which,  but 
for  the  bv-law,  would  lie  \Aithin  the  authority.  Rathbun  v.  Snow,  123  N.  Y. 
.343,  25  X.  E.  379,  10  L.  R.  A.  .355  (1800).  See.  also,  Babcock  v.  Deford,  14 
Kan.  408  (1875),  per  Brewer,  J.;  Smith  v.  Dronbay,  20  Utah,  443,  58  Pac. 
1112  aS99) ;  Patterson  v.  Xeal,  135  Ala.  477,  33  South.  39  (1902) ;  Edwards  v. 
Schaflfer,  49  Barb.  291  (1807). 

12  Ace,  Ixjngworth  v.  Conwell,  2  Blackf.  4G9  (1831),  where  the  limits  were 
not  secret,  but  known  to  the  third  party.  Marvin  v.  Universal  Life  Insurance 
Co.,  85  N.  Y.  278,  .39  Am.  Rep.  057  (1881). 

t  Part  of  the  opinion  is  omitted. 


MtJ 


Ch.  1) 


NATURE    AXD    EXTENT 


/ 


305 


agent's  authority  may  be  limited,  and,  if  the  party  deah'ng  with  him  has 
notice  that  his  powers  have  been  restricted,  his  principal  will  not  be 
bound  if  he  exceeds  his  authority. 

The  defendant  company  in  its  contract  of  insurance  expressly  Ifm 
ited  the  powers  of  all  of  its  agents  with  respect  to  certain  matters.  It 
was  expressly  covenanted  that  no  condition,  provision,  or  privilege  of 
the  policy  could  be  waived  or  modified  in  any  case  except  by  indorse- 
ment on  the  policy  signed  by  its  president  or  other  designated  officials. 
The  insured  was  put  upon  notice  that  the  premiums  were  to  be  paid 
at  the  company's  home  office,  or  to  an  agent  who  held  the  company's 
receipt  signed  by  one  of  its  governing  officers ;  and  the  insured  bound 
himself  to  pay  these  premiums  on  certain  specified  dates,  or  within 
the  period  of  grace  provided  for  in  the  policy.  When  the  August 
premium  fell  due,  it  was  not  paid,  nor  was  it  paid  or  tendered  within 
the  ZQ  days'  grace  thereafter.  On  September  11th  the  policy  had,  un- 
der its  terms,  become  lapsed,  and  the  insured  and  his  beneficiary  were 
bound  to  know  this  fact.  Provision  was  made  in  the  policy  for  its 
being  revived  within  a  period  of  two  years,  provided  past  due  pre- 
miums were  paid,  together  with  interest  thereon,  and  provided,  fur- 
ther, that  the  insured  furnished  to  the  company  satisfactory  evidence 
of  his  insurability.  After  the  policy  had  become  lapsed,  neither  the 
insured,  nor  any  one  acting  in  his  behalf,  made  to  the  defendant  com- 
pany an  application  for  a  revival  of  the  insurance,  or  furnished  the 
defendant  with  any  proof  of  the  insurability  of  the  insured. 

PlaintiflF  maintains  that  the  acceptance  of  the  August  premium  by  the 
general  agent  without  requiring  an  application  for  revival,  or  proof 
that  the  insured  was  in  good  health,  amounted  to  a  waiver  of  the  stip- 
ulations in  the  policy  touching  the  manner  in  which  it  might  be  revived. 
This  contention  is  not  sound,  for  the  reason  that  there  was  an  express 
provision  in  the  policy  that  no  waiver  of  any  forfeiture  could  be  made, 
save  by  certain  designated  officials  of  the  company,  and  that  no  agent 
had  any  power  to  waive  any  stipulations  upon  which  the  contract  of  in- 
surance was  based.     *     *     * 

We  have  not  dealt  with  the  question  as  to  the  admissibility  of  the 
testimony  of  Adams,  the  general  agent,  with  regard  to  the  circum- 
stances under  which  he  received  the  money  for  the  August  premium, 
for  the  reason  that,  had  this  testimony  been  excluded,  the  result  would 
inevitably  have  been  the  same.    Judgment  affirmed. 

GODD.PB.&  A.— 20 


'Ui- 


/"-ll 


fM^'vx 


iiX 


n 


'  / 


;'.0G  Tin:  ArruouiTY  (i'art  2 


r.  AXK  V.  OllK^  ^■.\I.L1^^■  l-lRXlTrRK  CO. 
(Suprouie  Court   nf  Apin'iils  of  West    \iri::iiiia.   1SK)3.     57  AV.   Va.  tlli.l,  M  S.  E. 

.sM).  TO  L.  u.  A.  ;;r_'.) 

Exception  to  a  directed  judgment  for  $2,()25.96,  on  a  note  for  $2,- 
500,  sii^ned  by  the  defendant,  and  indorsed  in  blank  by  the  payee  and 
prominent  stockholders  of  defendant  company.  The  note,  one  of  sev- 
eral similar  notes,  was  sent  to  one  Huston,  agent  of  defendant,  to  be 
discounted,  the  proceeds  to  be  sent  to  defendant.  Huston  represented 
to  the  bank  that  he  was  agent  of  the  maker,  but  that  he  had  secured  au- 
thority to  discount  the  note  for  his  own  benefit.  As  he  was  well  known 
to  plaintilY  bank,  and  had  an  account  there,  the  cashier  discounted  the 
note. 

PoFFKXDARGKK,  J.^^  *  *  *  W'lien  the  party  has  possession  of 
the  i^aper,  and  neither  the  fact  of  agency  nor  any  other  circinnstance 
inconsistent  with  title  in  the  holder  is  known  to  the  other  party,  he  may 
deal  on  the  basis  of  ownership,  although  there  is  in  fact  an  unknown 
agency.  He  may  take  good  title  despite  this  indisputable  fact  of  which 
he  has  no  knowledge.  These  cases  furnish  no  authority  for  the  posi- 
tion that  the  note  is  the  equivalent  of  a  power  of  attorney.  Owner- 
ship of  the  note,  and  possession  thereof  in  the  capacity  of  agent,  are 
inconsistent  things.  Ownership  includes,  of  course,  all  powers  of  con- 
trol and  disposition.  Agency  is  no  part  of  this,  but  is  a  new  and  dis- 
tinct thing  which  the  owner  may  create  out  of  it  and  in  respect  to  it. 
If  the  holder  is  the  owner,  he  cannot  be  the  agent  of  himself,  because 
his  agency  is  merged  in  his  ownership.  Had  the  fact  of  agency  been 
known  in  any  of  these  cases,  it  would  therefore  have  negatived  the 
possibility  of  ownership  in  the  holder,  and  no  dealings  could  have  been 
had  with  him  on  the  basis  of  ownership. 

Knowledge  of  the  fact  of  agency  destroys  the  apparent  title  of  the 
holder,  and  the  intending  purchaser  must  then  look  to  the  authority 
of  the  agent.  That  one  having  possession  of  negotiable  paper  has  only 
prima  facie  title  has  been  demonstrated  by  cases  already  cited  relating 
to  accommodation  paper.  The  same  principle  certainly  allows  a  man 
to  part  with  a  title  by  admission  which  can  be  defeated  by  proof.  The 
note  cannot  be  considered  a  power  of  attorney,  giving  such  authority 
as  is  claimed,  for  the  power  would  run  into  ownership,  a  status  which 
negatives  the  character  of  agency  necessarily.  'Tf  the  agency  of  the 
party  is  made  to  appear,  the  principal  will  not  be  bound  beyond  the 
authority  given. ^*     And,  where  the  holder  has  notice  that  the  party 

13  Part  of  the  opinion  i.s  omitted. 

i*A  princiiial  may  limit  the  antliority  of  his  ajreiit,  and  when  he  does  so 
the  iiiU'Mt  cannot  liind  liis  principal  beyond  the  limits  of  his  authority,  by 
contract,  estoppel,  or  waiver,  to  those  who  know  the  limitations  of  his  power. 
Modern  Woodmen  v.  Tevi.s,  117  Fed.  369,  54  C.  C.  A.  293  (1902).     Instructions 


Ch.  1)  NAXrRE    AND    EXTENT  307 

acting  as  agent  is  such,  he  is  bound  to  inquire  into  his  authority." 
Rand.  Commer.  Paper,  §  388. 

The  maker,  by  constituting  the  agency  and  intrusting  the  note  to  the 
agent  in  such  form  that  it  might  be  disposed  of  by  mere  dehvery,  held 
the  agent  out  to  the  world  as  possessing  power  to  pass  the  title  to  it. 
Upon  the  apparent  authority  with  which  the  principal  had  thus  clothed 
the  agent,  persons  dealing  with  the  latter  might  rely,  if  they  had  no 
notice  of  any  limitation  upon  such  authority.  "Private  instructions  to 
a  general  agent  circumscribing  his  power  will  not  avail  to  shield  the 
principal  from  liability  to  parties  dealing  with  him  in  ignorance  of  the 
limitation.  But  if  such  persons  are  aware  of  the  instructions,  the  prin- 
cipal is  not  bound."  1  Am.  &  Eng.  Ency.  Law  (2d  Ed.)  994.  "A 
principal  may  confer  as  much  or  as  little  authority  as  he  sees  fit  upon 
his  agent,  and  he  may  also  impose  such  lawful  restrictions  and  limita- 
tions upon  his  agent  as  he  may  deem  proper,  and  such  restrictions  and 
limitations  will  be  as  binding  upon  third  persons  who  had  notice  of 
them  as  upon  the  agent  himself,  provided  the  principal  does  nothing 
to  waive  them."  Lead  Pencil  Co.  v.  Wolfe,  30  Fla.  360,  11  South. 
488.  The  law  does  not  permit  an  agency  to  be  loaded  down  with 
secret  instructions  inconsistent  with  the  authority  actually  or  apparent- 
ly conferred,  but  if  a  stranger  dealing  with  the  agent  knows  of  the  lim- 
itation, he  has  no  cause  for  complaint,  and  in  this  respect  there  is  no 
difiference  between  a  general  and  a  special  agency.  1  Am.  &  Eng.  Ency. 
Law  (2d  Ed.)  994.  995.  "If  limitation  of  the  agent's  authority  is  pub- 
lic, or  known  to  the  person  with  whom  he  deals,  the  principal  will  not 
be  bound  if  the  agent  exceeds  his  authority ;  but  if  such  limitation  be 
])rivate.  the  agent  may  bind  his  principal,  although  the  former  exceed 
his  authority."  Bryant  v.  Moore,  26  Me.  84.  45  Am.  Dec.  96.  "If  the 
shipper  of  goods  on  freight  contracts  for  the  price  thereof  with  the 
general  agent  of  the  owner  of  the  vessel,  having  reason  to  know,  that 
although  his  agency  might  be  general,  yet  that  his  authority  was  re- 
stricted in  that  particular  instance,  the  shipper  cannot  claim  to  have 
the  terms  of  the  contract  fulfilled  as  against  the  principal  of  such 
agent."     Barnard  v.  Wheeler,  24  Me.  412. 

The  difference  between  general  and  special  agencies  in  the  law  of 
commercial  paper  is  stated  in  Daniel  on  Negotiable  Instruments,  at 
sectif)n  27X.  as  follows:  "Where  the  agency  is  specially  given  to  do  a 
particular  thing,  the  agent  is  circumscribed  within  the  limits  of  actual 
authority;  but  where  the  agency  is  general — as  that  of  a  bank  cashier, 
for  instance — all  acts  within  the  scope  of  that  general  authority  are 
binding  on  the  principal."  On  the  subject  of  limitation  of  aiUhoritv. 
this  work  says,  in  the  next  sentence,  "And  if  he  seeks  to  avoid  lia- 
bility, he  must  show  mA  only  limitation  of  the  general  authority,  biu 
also  that  the  party  dealing  with  the  agent  had  notice."     Under  the  au- 

tr>  tlip  nK'-nt.  known  tr)  tin-  tliinl  person,  limit  the  nnthoiity  of  ilic  jmciil  to 
i)in(l  [li(>  |irinri|iiil.  whether  the  iiuent  he  Kenersil  or  sperijil.  ('.  .s.  v  \\illl:i'ji>i 
led.  ('as.   .No.   1<;.7J».   1    U'jire  ]7.''.  (l.s:',()). 


.■U)8  Tnio  AiiTiioKiTr  (Part  2 

thority  conferred  upon  the  agent  in  lliis  case  by  placing  tlie  note  in  his 
hands,  ready  for  dcHvery  to  a  purchaser,  he  could  have  passed  the 
title  to  a  purchaser  who  knew  that  he  was  acting  in  the  capacity  of 
agent.  The  purchaser  wouKl  have  been  warranted  in  relying  upon  the 
apparent  authority  with  which  the  agent  was  clothed,  provided  he  knew 
of  no  limitation.    Bank  v.  Real  Estate  Co.,  150  Mo.  570,  51  S.  W,  691. 

The  declaration  on  the  part  of  the  holder,  after  having  admitted  the 
agency,  that  he  had  secured  the  right  to  use  the  note  for  his  own  bcn- 
etit,  calls  for  the  application  of  another  principle  of  the  law  of  agency, 
which  is  a  limitation  imposed  by  law  upon  the  power  of  every  agent, 
general  or  special,  of  which  all  persons  must  take  notice,  namely,  that 
an  agent  has  no  power  to  use  his  ofifice  otherwise  than  for  the  benefit 
of  his  principal.  When  he  undertakes  to  exercise  it  for  a  purpose 
which  can  in  no  way  benefit  his  principal,  but  will  benefit  himself  or 
some  third  person,  he  places  himself  in  a  position  in  which  the  law 
determines  that  he  is  outside  of  the  scope  of  his  agency,  and  the  person 
who  deals  with  him  in  such  position  will  not  be  heard  to  say  he  was  in 
ignorance  of  the  want  of  authority,  for  ignorance  of  law  excuses  no 
man.  It  is  of  the  very  essence  of  an  agency  that  it  shall  be  used  for 
the  benefit  of  the  principal.  Men  appoint  agents  to  subserve  their  in- 
terests, carry  on  their  business,  preserve  their  property,  and  not  for 
the  purpose  of  giving  it  away  to  others  and  converting  it  to  their  own 
use.  "If  one  who  is  known  to  be  an  agent  for  the  negotiation  of  his 
principal's  draft  transfer  the  draft  to  a  third  person  in  payment  of  the 
agent's  debt,  that  person  will  acquire  no  title  to  the  draft,  however 
honest  his  actual  intention  may  be.  The  declarations  of  an  agent,  al- 
though accompanying  his  acts,  constitute  no  evidence  of  the  extent  of 
his  authority.  *  *  *  If  a  transaction  between  an  agent  and  another 
person  be  entire,  and  be  known  to  such  other  person  to  be  a  breach  of 
trust  on  the  part  of  the  agent,  the  principal  is  not  bound  at  all,  although 
some  portions  of  the  transaction  might,  if  standing  alone,  have  been 
within  the  agent's  power  and  duty."  Dowden  v.  Cryder,  55  N.  J.  Law, 
329,  26  Atl.  941. 

The  reasons  underlying  these  legal  propositions  are  stated  in  the 
opinion  in  the  case  just  cited,  as  follows:  "It  is  a  universal  principle 
in  the  law  of  agency  that  the  powers  of  the  agent  are  to  be  exercised 
for  the  benefit  of  the  principal,  and  not  of  the  agent  or  third  parties. 
Persons  dealing  with  one  whom  they  know  to  be  an  agent  and  to  be 
exercising  his  authority  for  his  own  benefit  acquire  no  rights  against 
the  principal  by  the  transaction.  Such  a  transaction  is  usually,  and  per- 
haps properly,  spoken  of  by  the  courts  as  fraudulent;  but,  however 
honest  the  intention  of  the  parties,  the  agent's  act  is  invalid,  merely 
because  the  circumstances  known  to  both  prove  it  to  be  ultra  vires." 
Tiedeman  on  Commer.  Paper,  §  92,  says :  "It  is  implied  in  every 
agency,  in  the  absence  of  express  evidence  to  the  contrary,  that  the 
power  of  the  agent  is  to  be  exercised  for  the  benefit  of  the  principal, 
and  not  for  his  own  private  advantage."    This  principle  was  applied  by 


Ch.  1)  NATURE    AND    EXTENT  309 

the  Supreme  Court  of  Virginia  in  Stainback  v.  Bank  of  Virginia,  11 
Grat.  269,  in  which,  after  stating  the  nature  of  the  agent's  powers,  the 
court  held  as  follows  :  "A  party  dealing  with  the  agent,  with  knowledge 
or  means  of  knowledge  that  under  such  a  power  he  is  indorsing  the 
name  of  his  principal  for  his  own  benefit,  is  not  entitled  to  recover 
from  the  principal."  In  Stainer  v.  Tysen,  3  Hill  279,  the  rule  is  de- 
clared in  this  language :  "The  naked  power  to  do  acts  for  and  in  the 
name  of  the  principal  negatives  all  authority  on  the  part  of  the  attorney 
to  act  for  the  benefit  of  any  one  besides  the  principal,  and  persons  deal- 
ing with  the  attorney  as  such  are  bound  to  notice  this  limitation." 
Other  cases  illustrating  the  rule  are  Bank  v.  Aymar,  3  Hill  262 ;  Suck- 
ley  V.  Tunno,  1  Brev.  257;  Holden  v.  Durant,  29  Vt.  184,  Odiorne  v. 
Maxcy,  13  Mass.  178;   Bank  v.  Studley,  1  Mo.  App.  260. 

Most  of  these  are  cases  in  which  the  agent  pledged  or  sold  the  paper 
in  payment  of  his  own  debt,  so  that  the  third  party  dealing  with  him 
derived  a  peculiar  benefit  from  the  unauthorized  transaction.  This, 
however,  does  not  seem  to  be  the  reason  for  denying  validity  of  title  in 
such  purchaser.  It  seems  to  stand  upon  the  want  of  authority  in  the 
agent  to  exercise  his  powers  for  his  own  benefit  or  for  the  benefit  of 
anybody  except  his  principal.  Knowledge  of  this  perversion  of  author- 
ity on  the  part  of  the  purchaser  is  necessary  to  the  invalidity  of  his 
title,  of  course.  But  when  he  does  have  such  knowledge,  he  is  bound 
to  know  the  want  of  authority  in  the  agent  to  so  use  his  powers.  In 
the  case  of  Dowden  v.  Cryder  the  purchaser  was  not  a  creditor  of  the 
agent.  He  took  the  draft  in  exchange  for  $2,060  in  cash  and  a  diamond 
necklace  valued  at  $1,100.  There  was  no  advantage  in  the  transaction 
to  the  purchaser,  except  a  possible  profit  on  the  necklace  and  the 
discount  of  $40  allowed.  In  Trust  Co.  v.  Abbott,  44  N.  J.  Law,  257, 
the  agent  held  a  power  of  attorney  authorizing  him  to  sign  the  prin- 
cipal's name  to  any  paper  or  papers,  notes,  etc.  He  drew  a  note  in  his 
own  favor,  and  signed  the  principal's  name  by  himself  as  agent,  and 
sold  it  to  the  defendant.  In  the  action  on  the  note,  the  court  held  that 
the  power  did  not  justify  the  signing  of  such  documents  as  were 
described  in  it  for  purposes  outside  of  the  principal's  business,  and 
that  the  burden  was  upon  the  plaintiff  to  show  that  he  was  a  bona  fide 
holder,  for  value,  before  maturity.  In  stating  the  reason  for  the  rule, 
the  court  said :  "But  in  whichever  form  the  instrument  was  delivered, 
it  did  not  justify  the  signing  of  notes  for  purposes  outside  of  the  prin- 
cipal's business.  The  note  in  suit  was  not  given  for  such  a  purpose, 
but  was  put  forth  for  the  personal  benefit  of  the  attorney,  who  con- 
verted its  proceeds  to  his  own  use.  It  was  therefore  issued  under  an 
apparent  authority,  but  in  fraud  of  tiie  principal."  The  court  reversed 
the  judgment  in  favor  of  the  plaintiff,  because  the  evidence  did  not 
show  when,  from  whom,  and  under  what  circumstances  the  attorney 
had  received  the  money. 

The  same  principle  was  enunciated  and  applied  bv  this  court  in 
Rohrbough  v.  Express  Co.,  50  \V.  \'a.  14S,  40  S.  E.  398,  88  Am.  St. 


.'HO  TiiK  ArnioKri-Y  (Part  2 

Rop.  840.  Sec,  also.  Ivxpress  Co.  v.  Troi^o.  35  I\I(1.  47.  Tliis  is  a 
heavy  iiciialty  to  visit  upon  the  bank,  but  nothing  worse  than  would 
have  befallen  it  hail  any  other  limitation  upon  the  agent's  power  been 
disregariled.  Other  instances  of  such  penalties,  conse(|uent  upon  non- 
observance  of  legal  rights,  arc  to  be  found  all  along  the  beaten  high- 
way of  the  administration  of  the  law.  Take  one  who  pays  full  value 
for  property,  knowing  the  sale  is  made  to  defraud  creditors.  He  loses 
everything,  while,  if  the  same  sale  had  been  made  to  a  person  ignorant 
of  the  intent,  it  would  have  been  valid. 

On  the  basis  of  an  assertion  of  title  to  the  note  and  repudiation  of 
the  agency  by  the  representation  of  right  to  use  the  money,  the  case 
stands  no  better.  If  Huston  had  no  title  under  the  paper,  taken  in  con- 
nection with  his  former  representation  of  agency,  the  bank  had  no 
right  to  rely  upon  his  mere  verbal  assertion  of  title.  Title  to  property 
cannot  be  acquired  in  that  way.  Having  knowledge  of  a  fact,  sufifi- 
cient  to  put  it  upon  inquiry,  at  least — the  admission  of  agency — the 
bank  was  bound  to  make  a  proper  inquiry,  and  this  requirement  could 
not  be  satisfied  by  an  inquiry  directed  to  the  party  whose  interest  it 
would  be  to  misinform  as  to,  and  deny,  the  very  fact  sought  for.  7 
Cyc.  942;  Carter  v.  Lehman,  90  Ala.  126,  7  South.  JZh. 

For  the  error  of  the  court  in  excluding  the  defendant's  evidence  and 
directing  a  verdict  for  plaintiff,  the  judgment  must  be  reversed,  the 
verdict  set  aside,  a  new  trial  allowed,  and  the  cascj  remanded. 


IV.  Usage  axd  Custom 

CAWTHORN  v.  LUSK. 
(Supreme  Court  of  Alabama,  1892.     97  Ala.  074.  11   South.  7.11.) 

Head,  J.  The  action  is  brought  by  appellants  to  recover  damages 
for  the  breach  of  an  agreement  for  the  sale  of  800  sacks  of  dried 
grapes,  made  by  Stollenwerck  &  Co.,  as  agents  of  defendants.  The 
case  was  tried  by  the  city  court  without  a  jury,  and  judgment  rendered 
for  defendants.  The  sale  of  the  grapes  by  Stollenwerck  &  Co.  at  3Vlj 
cents  per  pound  f.  o.  b.  to  be  delivered  in  September  and  October  fol- 
lowing, and  that  the  intention  and  understanding  of  these  parties  was 
that  the  sale  was  a  finality ;  also  that  defendants  refused  to  deliver  the 
grapes. — are  uncontroverted  facts.  The  only  (lis])uted  question  of 
fact  relates  to  the  authority  of  Stollenwerck  &  Co.  to  bind  defendants 
by  the  contract  of  sale,  without  first  submitting  it  for  their  acceptance 
or  rejection. 

Defendants,  who  reside  and  are  doing  business  in  California,  while 
conceding  that  Stollenwerck  &  Co.  are  their  agents  or  brokers  in 
Birmingham,  Ala.,  to  sell  dried  fruits,  claim  that  they  were  only  au- 
thorized to  make  contracts  of  sale  subject  to  confirmation.    That  such 


CI  I  1)  NATURE  AND  EXTENT  311 

is  the  nature  and  extent  of  their  general  authority  is  shown  by  the 
letter  of  instructions,  dated  July  9,  1890,  sent  by  defendants  to  them, 
and  by  the  general  custom  of  the  trade,  of  which  plaintifTs,  having 
been  engaged  in  the  same  business  in  Birmingham  for  several  years, 
are  chargeable  with  notice. 

The  question  then  arises  whether  authority,  express  or  implied,  waa 
subsequently  conferred  to  sell  the  grapes  at  3V-i  cents  per  pound. 
PlaintifTs  claim  that  such  authority  is  implied  from  a  telegram  sent  by 
defendants  to  Stollenwerck  &  Co.,  when  interpreted  by  the  custom 
and  usage  of  the  trade.  The  law  presumes  that  when  a  commercial 
agency  is  to  be  exercised,  in  the  absence  of  limitation  or  prohibition,  it 
is  to  be  conducted  in  the  mode  authorized  and  justified  by  the  customs 
and  usages  of  such  trade  or  business.  In  Guesnard  v.  Railroad  Co., 
76  Ala.  453,  this  doctrine  is  asserted  as  follows :  "Where  a  mercantile 
agency  is  to  be  executed  at  a  particular  place,  the  principal  who  em- 
ploys the  agent  is  presumed  to  consent  that  he  may  execute  it,  in  the 
absence  of  particular  instructions,  according  to  the  general  custom 
and  usage  relating  to  that  kind  of  trade  or  business,  whatever  it  may 
be.  The  law  implies  that  he  gives  his  consent  for  his  agent  to  act  as 
all  other  similar  agents  who  are  honest  and  diligent  are  accustomed  to 
do ;  and  it  is  immaterial,  as  a  general  rule,  whether  the  principal  is 
informed  as  to  such  customs  and  usages  or  not."  It  is  true  that,  when 
an  agency  is  created  by  a  written  instrument,  the  nature  and  extent  of 
the  authority  must  be  ascertained  from  the  instrument  itself,  and 
cannot  be  enlarged  by  parol  proof.  This  rule  is  not  violated  by  the 
admission  of  proof  of  the  usages  of  trade.  They  are  admitted,  not 
for  the  purpose  of  enlarging,  but  of  interpreting,  the  powers  actually 
given.  Says  Judge  Story :  "The  known  usages  of  trade  and  business 
often  become  the  true  exponents  of  the  nature  and  extent  of  an  im- 
plied authoritv."  Storv,  Ag.  §  96;  Wheeler  v.  McGuire,  86  Ala.  398. 
5  South.  190,  2  L.  R.  A.  SOS. 

The  telegram  referred  to  was  sent  l)y  defendants  to  Stollenwerck  & 
Co.  July  18,  1890,  and  is  as  follows:  "Cannot  offer  dried  grapes  below 
3V2  f-  o-  ^-  Have  advanced  to  3%."  This  telegram  was  in  response 
to  one  sent  by  Stollenwerck  Sz  Co.  to  defendants  the  day  before,  of 
which  the  following  is  a  cojjy  :  "Orm.sby  offering  dried  grapes  4.70. 
Can't  you  let  us  meet  that  price?"  The  evidence  shows  a  custom  or 
u.sage  of  the  trade  to  the  effect  that  a  telegram  sent  by  the  ])rincipal 
to  the  broker,  giving  a  price,  without  any  stipulation  in  the  telegram 
that  sales  made  at  such  price  shall  be  subject  to  confirmation  by  the 
j)rincii)al.  is  authority  to  the  broker  to  sell  finally  and  unconditionally 
at  that  price,  no  matter  what  the  prior  instructions  were.  This  custom 
is  testified  to  by  two  witnesses,  whose  testimony  is  uncontradicted. 
True,  Isadore  Jacobs,  who  rej)resents  defendants,  testifies:  "None  of 
our  letters  or  telegrams  to  Stollenwerck  &  Co.  instructed  them  to  sell 
dried  grapes,  our  instructions  being  to  take  orders  for  dried  grapes 
=iubject  to  confirmatif)n  :    anfl,  even  if  letters  or  telegrams  harl  been 


•'^13  TDE  AmioTJiTY  (Part  ti 

sent  instructing  brokers  to  sell,  it  wouUl  be  understood  that  they 
could  only  sell  subject  to  confirmation,  unless  specially  stated,  'You 
may  sell  without  confirmation.'  " 

It  will  be  observed  that  the  witness  does  not  deny  the  existence  of 
the  custom,  but  only  testifies  to  the  private  understanding  between 
defendants  and  their  brokers.  Such  private  understanding  is  not  bind- 
ing on  plaintiffs,  unless  communicated  to  them.  There  is  no  pretense 
that  it  was  communicated ;  on  the  contrary,  the  evidence  shows  that 
the  telegram  of  July  18,  1890,  was  shown  to  plaintiffs  as  Stollenwerck 
&  Co.'s  authority  to  make  a  final  and  unconditional  sale.  We  find 
from  the  evidence  that  there  was  such  custom.  Considering  the  tele- 
gram in  connection  with  the  one  to  which  it  was  a  response,  it  might 
well  be  contended,  without  reference  to  the  custom,  that  it  was  at  least 
implied  authority  to  sell  dried  grapes  at  Si/lj  cents  per  pound  f.  o.  b. 
But  it  is  not  necessary  to  so  find.  There  being  no  instruction  or  stipu- 
lation in  the  telegram  that  sales  at  that  price  are  subject  to  confirma- 
tion, Stollenwerck  &  Co.  were  thereby  authorized  under  the  custom 
to  sell  finally  and  unconditionally  the  grapes  to  plaintiffs,  and  defend- 
ants are  bound  by  the  contract  of  sale  to  the  same  extent  as  if  they 
had  sold  the  grapes.    Herring  v.  Skaggs,  62  Ala.  180,  34  Am.  Rep.  4.^''' 

The  measure  of  damages  is  the  difference  between  the  price  which 
plaintiff's  agreed  to  pay  for  the  grapes,  including  cost  of  transporta- 
tion to  Birmingham,  and  the  market  price  at  Birmingham  at  the  time 
of  delivery,  with  interest.  Under  the  evidence,  we  assess  the  plain- 
tiffs' damages  at  the  sum  of  $945.  The  judgment  of  the  city  court 
is  reversed,  and  a  judgment  will  be  entered  in  this  court  in  favor  of 
the  plaintiffs  for  said  sum  of  $945,  together  with  the  costs  in  this  court 
and  the  city  court. 

This  opinion,  except  as  to  assessment  of  damages,  was  prepared  by 
the  late  Justice  Clopton.     Reversed  and  rendered. 

15  Accord:  Lowenstein  v.  Lombard,  164  N.  Y.  324,  58  N.  E.  44  (1900); 
Cruzan  v.  Smith,  41  Ind.  288  (1872).  quoting  Story  on  Agency. 

A  merchant  in  London,  who  employs  an  agent  in  Liverpool,  is  bound  by  the 
usage  of  trade  at  Liverpool.  Graves  v.  Legg,  2  H.  &  N.  210,  26  L.  J.  Ex. 
316,  3  Jur.  (N.  S.)  519,  5  W.  R.  597  (18.57).  One  who  authorizes  his  agent  to 
sell  on  the  Stock  Exchange  by  implication  authorizes  a  sale  in  the  form  and 
on  the  conditions  usual  on  the  Stock  Exchange.  Marker  v.  Edwards,  57  L. 
J.  Q.  B.  147  (1887).  But  the  custom  must  affect  only  the  mode  of  performing 
the  contract  and  not  its  intrinsic  character.  Robinson  v.  Mollett,  44  L.  J. 
C.  P.  362,  L.  R.  7  H.  L.  802,  33  L.  T.  544  (1874),  reversing  20  W.  R.  544  (1872). 


QYi.  1)  NATURE    AND    EXTENT  •  313 

GATES  IRON  WORKS  v.  DENVER  ENGINEERING  WORKS 

CO. 

(Court  of  Appeals  of  Colorado,  1901.    17  Colo.  App.  15,  67  Pac.  173.) 

Action  for  the  price  of  mining  machinery,  sold  by  the  Denver  Com- 
pany to  one  Berkey,  who  was  sales  agent  of  the  Gates  Company.  On 
the  window  of  his  office  was  printed:  "Gates  Iron  Works,  B.  L. 
Berkey,  ^Manager.  Mining  Machinery  of  all  Kinds."  His  cards  and 
letter  heads  contained  similar  statements.  Plaintifif  made  no  further 
inquiry  as  to  Berkey's  authority.  From  a  directed  verdict  for  plain- 
tiff, defendant  appeals. 

Thomson,  J.'^  *  *  *  Discussing  the  question  of  the  duty  of 
third  persons  dealing  with  an  ostensible  agent,  Mr.  ^Nlechem  says: 
"In  approaching  the  consideration  of  the  inquiry  whether  an  assumed 
authority  exists  in  a  given  case,  there  are  certain  fundamental  prin- 
ciples which  must  not  be  lost  sight  of.  Among  these  are,  as  has  been 
seen :  That  the  law  indulges  in  no  bare  presumption  that  an  agency 
exists.  It  must  be  proved  or  presumed  from  facts.  That  the  agent 
cannot  establish  his  own  authority,  either  by  his  representations  or  by 
assuming  to  exercise  it.  That  an  authority  cannot  be  established  by 
mere  rumor  or  general  reputation.  That  even  a  general  authority  is 
not  an  unlimited  one,  and  that  every  authority  must  find  its  ultimate 
source  in  some  act  of  the  principal.  Persons  dealing  with  an  assumed 
agent,  therefore,  whether  the  assumed  agency  be  a  general  or  special 
one,  are  bound,  at  their  peril,  to  ascertain  not  only  the  fact  of  the 
agency,  but  the  extent  of  the  authority;  and,  in  case  either  is  con- 
troverted, the  burden  of  proof  is  upon  them  to  establish  it."  Mechem, 
Ag.  §  276.  In  Lester  v.  Snyder,  12  Colo.  App.  351,  55  Pac.  613,  the 
foregoing  was  expressly  approved. 

In  the  case  at  bar  Mr.  Miller,  the  general  manager  of  the  plaintifT, 
who  conducted  the  transaction  in  question  in  its  behalf,  made  no  in- 
quiry with  reference  to  the  authority  of  Mr.  Berkey;  and  neither  him- 
self nor  his  company  had  any  knowledge  of  the  relations  existing  be- 
tween Berkey  and  the  defendant,  except  what  was  shown  by  the  letter 
head,  sign,  card,  and  circular.  It  was  in  reliance  upon  these  that  the 
property  was  sold.  Mr.  Berkey  was  the  general  agent  of  the  defend- 
ant at  Denver.  He  was  the  manager  of  its  Denver  office.  The  de- 
fendant was  bound  by  the  acts  of  Mr.  Berkey  within  his  apparent  au- 
thority. Where  a  person  holds  out  another  to  the  public  as  having  a 
general  autliority  to  act  for  him  in  the  particular  business  in  which  he 
is  engaged,  third  persons  may  safely  deal  with  the  agent  in  the  trans- 
action of  such  business.  But  there  is  a  limit  to  the  authority  of  an 
agent,  general  or  special,  and  the  principal  is  not  bound  by  his  act 
outside  of  such  limit.     No  matter  how  extensive  the  authority  of  an 

»«  I'iirt  of  tbe  opinion  Is  omitted. 


ol-4  TiiK  AiriioiMi'Y  (Part  2 

ai^cnt  may  ho  in  the  transaolion  ol  his  principal's  husiiu'ss,  it  is  slill 
continod  to  tliat  husiiioss ;  and  his  act  outside  of  the  houiulary  hy 
wliich  the  Inisiiioss  is  circuiiiscrihod  would  not  hind  his  ])rincipal. 
Stewart  V.  W'ootlward,  50  \t.  "S,  JS  Am.  Kep.  4SS  ;  President,  etc.,  of 
Mechanics"  Hank  v.  New  York  &  X.  H.  R.  Co.,  13  N.  Y.  599;  Rich- 
mond V.  lireelev,  3S  Iowa,  666;  P^oug;ue  v.  P>urgcss.  71  Mo.  389;  Ed- 
wards V.  Doolev.  120  N.  Y.  540,  24  N.  E.  827;  Xavii-ation  Co.  v. 
Dandridge.  8  Gi'U  &  J.  248,  29  Am.  Dec.  543;  ]\lcAli)in  v.  Cassidy,  17 
Tex.  450 ;  Story,  Aj^!  §  ^7. 

Now.  Mr.  Miller  knew  that  the  defendant  was  cntT^aj^cd  in  the  man- 
ufacture of  general  mining  machinery.  He  was  so  advised  by  the 
letter  head.  The  sign  on  the  window  appears  to  have  been  substan- 
tially the  same  as  the  letter  head.  The  card  did  not  describe  the  de- 
fendant as  a  manufacturer,  but  presented  a  ])icture  of  its  manufactur- 
ing establishment  and  machine  shops,  with  the  words  "Mining  Ma- 
chinery of  Every  Description" ;  and,  as  Berkey  was  held  out  as  the 
agent  of  a  manufacturer,  his  apparent  authority  extended  only  to  the 
sale  of  the  goods  manufactured  by  his  principal.  That  the  defendant 
allowed  him  to  style  himself  its  manager  is  immaterial,  because  he 
could  bind  the  defendant  only  in  the  management  of  the  business 
in  which  it  was  engaged.  There  was  nothing  in  the  evidence  of 
authority  which  Mr.  Miller  saw  and  upon  which  he  relied  to  warrant 
him  in  assuming  that  Mr.  Berkey  had  any  authority  to  buy  mining  ma- 
chinery. So  far  as  appearances  went, — at  least  appearances  for  which 
the  defendant  was  responsible, — the  purchase  of  mining  machinery  was 
no  part  of  the  defendant's  business  ;  and  there  was  nothing  to  indicate 
that  Mr.  Berkey  was  empowered  to  act  outside  of  its  business.  There 
was  no  apparent  authority  in  Berkey  to  buy  this  machinery,  and,  in 
order  to  bind  the  defendant  by  his  contract,  the  burden  was  on  the 
plaintiff  to  prove  that  the  purchase  was  specially  authorized  by  it. 
Mining  Co.  v.  Eraser,  2  Colo.  App.  14,  29  Pac.  667. 

While  the  plaintiff,  in  making  the  sale,  relied  exclusively  upon  the 
visible  indicia  of  Berkey's  authority,  at  the  trial  it  undertook  to  prove 
a  custom  among  agencies  handling  mining  machinery  in  Denver  of 
purchasing  goods  from  local  companies.  When  or  how  the  custom 
originated,  or  how  long  it  lasted,  is  not  stated,  except  that  it  prevailed 
in  Denver  in  the  fall  and  winter  of  1896  and  1897.  We  do  not  think 
this  assertion  of  a  custom  requires  very  elaborate  discussion.  Re- 
specting the  effect  wdiich  custom  or  usage  may  have  upon  the  manner 
in  which  an  agent  may  transact  the  business  of  his  principal,  Mr.  Me- 
chem  says:  "Where  the  principal  confers  upon  his  agent  an  authority 
of  a  kind  or  empowers  him  to  transact  business  of  a  nature  in  refer- 
ence to  which  there  is  a  well-defined  and  publicly  known  usage,  it  is 
the  presumption  of  the  law,  in  the  absence  of  anything  to  indicate  a 
contrary  intent,  that  the  authority  was  conferred  in  contemplation  of 
the  usage ;  and  third  persons,  therefore,  who  deal  with  the  a^ent  in 
good  faith  and  in  the  exercise  of  reasonable  prudence,  will  be  protected 


Ch.  1)  NATURE    AND    EXTENT  315 

against  limitations  upon  the  usual  authority,  of  which  they  had  no 
notice.  In  order  to  give  the  usage  this  effect,  it  must  be  reasonable  ;  it 
must  not  violate  positive  law ;  and  it  must  have  existed  for  such  a 
time,  and  become  so  widely  and  generally  known,  as  to  warrant  the 
presumption  that  the  principal  had  it  in  his  view  at  the  time  of  the 
appointment  of  the  agent." 

It  is  only,  however,  the  mode  of  transacting  the  business  which  can 
be  affected  by  usage.  Xo  man  can  be  compelled  by  custom  to  alter  the 
character  of  his  business.  Concluding  the  section  from  which  we  have 
already  quoted,  Mr.  Mechem  says  further:  "Usage,  however,  cannot 
operate  to  change  the  intrinsic  character  of  the  relation,  nor  will  it  be 
permitted,  as  between  the  principal  and  the  agent,  or  as  between  the 
principal  and  third  persons  having  notice  of  them,  to  contravene  ex- 
l^ress  instructions,  or  to  contradict  an  express  contract  to  the  con- 
trary. So  a  usage  not  known  to  the  principal  cannot  operate  to  au- 
thorize the  making  of  an  invalid  instead  of  a  valid  contract,  or  to  bind 
him  to  take  one  thing  when  he  has  ordered  another." 

Aside  from  the  fact  that  the  custom  mentioned  in  the  evidence  here 
was  not  defined,  it  had  no  such  term  of  existence  as  to  make  it  binding 
on  any  one;  but,  waiving  this  objection,  whatever  may  have  been  its 
nature  and  limits,  it  could  afford  no  protection  to  the  plaintiff.  So 
far  as  the  plaintiff  knew  or  had  any  right  to  believe,  and  so  far  as 
we  know  or  have  any  right  to  believe,  the  business  of  the  defendant 
was  confined  to  the  manufacture  and  sale  of  mining  machinery ;  and 
no  custom  in  any  locality  where  it  sent  an  agent  to  act  for  it  could 
force  it  to  do  a  different  business.  Presumptively  because  it  manu- 
factured mining  machinery  it  did  not  desire  to  buy  mining  machinery, 
and  no  custom,  however  ancient  or  well-defined,  could  compel  it  to 
do  so.^^ 

It  seems  that  some  time  after  the  transaction  in  question  Berkcy  in- 
formed the  defendant  of  his  purchase  as  having  been  made  on  his  own 
account,  and  the  defendant  proposed  to  assist  him  in  doing  an  indi- 
vidual business,  but  there  was  no  ratification.  Proof  was  proffered 
by  the  defendant  that  it  knew  nothing  of  the  purchases  as  having  been 
made  for  it,  that  I'erkey  had  no  authority  to  make  the  purchase,  and 
that  it  never  in  any  manner  recognized  the  purchase  as  having  been 
made  in  its  behalf;  but  tlie  evidence  was  all  excluded.  Of  course,  the 
exclusion  was  error;  but  it  can  hardly  be  said  that  it  worked  harm  to 
the  defendant.  The  liurden  was  on  the  jjlaintiff  to  jjrove  the  agent's 
authority  and  every  fact  which  might  tend  to  make  his  contract  the  con- 
tract of  his  principal,  and,  in  the  absence  of  such  proof,  disproof  by  the 

I"  Cfiicr.'il  f\istoiiis  iii-f  jiidiciiilly  kimwii,  !iii(l  fdriii  part  nf  (he  law.  l.ncal 
nistnins  fniinf»t  alter  thf  Inw,  and  iinisl  l»e  proved.  .Moore  v.  TicUlo,  11  N.  C. 
'J41  (lS.'{li.  What  is  usual  is  not  always  iiiaftor  of  Jiuiicial  kiiowlcdm'.  i:x- 
l.stciire  of  a  custom  Is  often  for  the  Jury  on  the  evidence.  Heese  v.  Hates,  !M 
Va.  ••'.'Jl.  2C>  S.   K.  SI!.-,  (IMIT);    Hielihorn  v.   I'.radley,   117  Iowa,   l-'tO,  !»0  N.   W. 


lUG  Tiiio  AriiK^iMTY  (Part  2 

defendant  was  unnecessary.  I"^i>on  the  evidence  there  was  no  question 
to  submit  to  the  jury.  To  this  extent  we  agree  with  the  court.  But  it 
was  on  the  plaintiff's  side  tliat  the  faihire  was,  and  the  judgment 
should  have  been  for  the  defendant. 

The  juilgment  is  reversed,  and  the  cause  remanded  for  further  pro- 
ceedings in  accordance  with  the  views  herein  expressed.    Reversed. 


FARNSWORTH  v.  HEMMER. 


(Supreme  Judicial  Court  of  Massachusetts,  ISGl.     1  Allen,  494,  79  Am. 

Dec.  756.) 

Contract,  brought  by  a  real  estate  broker  to  recover  a  commission 
for  his  services  in  negotiating  an  exchange  of  land  between  the  de- 
fendant and  Fanny  W.  Cooper. 

At  the  trial  in  the  superior  court,  it  appeared  that  the  plaintiff  was 
a  real  estate  broker,  and  was  employed  by  the  defendant  to  negotiate 
the  sale  or  exchange  of  certain  real  estate  in  Boston,  and  that  through 
his  aid  an  exchange  thereof  was  effected  with  Mrs.  Cooper  for  real 
estate  owned  by  her,  which  she  in  like  manner  had  employed  the  plain- 
tiff' to  aid  her  in  selling  or  exchanging,  before  his  employment  by  the 
defendant,  and  that  he  accordingly  acted  for  both  parties,  and  charged 
a  commission  to  both,  and  that  he  had  commenced  an  action  which 
was  still  pending  against  Mrs.  Cooper,  to  recover  the  commission 
charged  to  her.  The  plaintiff  never  informed  the  defendant  that  he 
was  acting  for  Mrs.  Cooper,  and  there  was  no  evidence  that  the  de- 
fendant knew  the  fact.  The  plaintiff  offered  evidence  of  a  custom 
among  the  brokers  of  Boston  to  charge  a  commission  to  both  parties 
in  cases  like  the  present,  and  the  defendant,  for  the  purpose  of  testing 
the  validity  of  such  custom,  admitted  that  it  could  be  proved  to  exist, 
but  claimed  that,  if  proved,  it  was  a  bad  custom,  and  invalid  in  law ; 
and  Lord,  J.,  so  ruled.  A  verdict  was  accordingly  returned  for  the 
defendant,  and  the  plaintiff  alleged  exceptions. 

BiGELOW,  C.  J.  The  principle  on  which  rests  the  well-settled  doc- 
trine, that  a  man  cannot  become  the  purchaser  of  property  for  his 
own  use  and  benefit  which  is  intrusted  to  him  to  sell,  is  equally  ap- 
plicable w^hen  the  same  person,  without  the  authority  or  consent  of 
the  parties  interested,  undertakes  to  act  as  the  agent  of  both  vendor 
and  purchaser.  The  law  does  not  allow  a  man  to  assume  relations 
so  essentially  inconsistent  and  repugnant  to  each  other.  The  duty 
of  an  agent  for  a  vendor  is  to  sell  the  property  at  the  highest  price; 
of  the  agent  of  the  purchaser  to  buy  it  for  the  lowest.  These  duties 
are  so  utterly  irreconcilable  and  conflicting  that  they  cannot  be  per- 
formed by  the  same  person  without  great  danger  that  the  rights  of 
one  principal  will  be  sacrificed  to  promote  the  interests  of  the  other, 
or  that  neither  of  them  will  enjoy  the  benefit  of  a  discreet  and  faith- 


f^. 


U/'}^'\M-^ 


V^—Ti    ''*■  ^^'^ 


tt«r-'^^"^ 


(/ 


Ch.  1)  NATURE    AND    EXTENT  317 

ful  exercise  of  the  trust  reposed  in  the  agent.  As  it  cannot  be  sup- 
posed that  a  vendor  and  purchaser  would  employ  the  same  person 
to  act  as  their  agent  to  buy  and  sell  the  same  property,  it  is  clear 
that  it  operates  as  a  surprise  on  both  parties,  and  is  a  breach  of  the 
trust  and  confidence  intended  to  be  reposed  in  the  agent  by  them 
respectively,  if  his  intent  to  act  as  agent  of  both  in  the  same  trans- 
action is  concealed  from  them.  It  is  of  the  essence  of  his  contract 
that  he  will  use  his  best  skill  and  judgment  to  promote  the  interest 
of  his  employer.  This  he  cannot  do,  where  he  acts  for  two  persons 
whose  interests  are  essentially  adverse.  He  is  therefore  guilty  of  a 
breach  of  his  contract.  Nor  is  this  all.  He  commits  a  fraud  on  his 
principals  in  undertaking,  without  their  assent  or  knowledge,  to  act 
as  their  mutual  agent,  because  he  conceals  from  them  an  essential 
fact,  entirely  within  his  own  knowledge,  which  he  was  bound  in  the 
exercise  of  good  faith  to  disclose  to  them.  Story  on  Agency,  §  31 ; 
Copeland  v.  Mercantile  Ins.  Co.,  6  Pick.  198,  204 ;  Pugsley  v.  Murray, 
4  E.  D.  Smith,  245 ;  Rupp  v.  Sampson,  16  Gray,  398,  77  Am.  Dec. 
416. 

Such  being  the  well-settled  rule  of  law,  it  follows  that  the  evidence 
offered  by  the  plaintiff  was  inadmissible.  A  custom  or  usage  to  be 
legal  and  valid  must  be  reasonable  and  consistent  with  good  morals 
and  sound  policy,  so  that  parties  may  be  supposed  to  have  made  their 
contracts  with  reference  to  it.^^  If  such  a  usage  is  shown  to  exist, 
then  it  becomes  the  law  by  which  the  rights  of  the  parties  are  to  be 
regulated  and  governed.  But  the  usage  on  which  the  plaintiff  relied 
was  wanting  in  these  essential  elements.  It  would  be  unreasonable, 
because,  if  established,  it  would  operate  to  prevent  the  faithful  fulfill- 
ment of  the  contract  of  agency.  It  would  be  contrary  to  good  mor- 
als and  sound  policy,  because  it  would  tend  to  sanction  an  unwar- 
rantable concealment  of  facts  essential  to  a  contract,  and  operate  as 
a  fraud  on  parties  who  had  a  right  to  rely  on  the  confidence  reposed 
in  their  agents.    Exceptions  overruled. 


BARKSDALE  v.   BROWN. 

(roiistitutional  Court  of   South  Carolina,  1815.     1   Nott  &  McC.  517,  9   Am. 

Dec.  7120.) 

Action  for  the  proceeds  of  rice  sent  to  defendants  to  sell  as  factors, 
with  instructions  to  sell  for  cash.  Tiiey  sold  to  one  Powers,  who  ship- 
ped it  and  went  off  without  paying  for  it. 

NoTT,  J.'"  That  usage  docs,  in  many  instances  constitute  the  law, 
and  that  contracts  must  be  construed  with  reference  to  the  usage  of 

ISA  usiiKc  In  contravention  of  a  wfll-sclllcd  and  salutary  rnlo  of  law  fan 
not  be  sustained  by  courts  of  justice.  H^iisln  v.  ("larlv.  41  .Md.  l.'jS,  liO  Am.  Kcp. 
no  a.S74)  ;  FeiTusou  V.  (;oocb,  94  Vu.  1,  'JC  S.  K.  .•JU7,  40  L.  U.  A.  li.'M  (is'.Hii; 
Kobinson  v.  Moliett,  L.  H.  7  II.  L.  802.  II  L.  J.  O.  P.  302,  33  L.  T.  Kep.  N.  S. 
544  (1874). 

i»Part  of  the  opiidon  Is  omitted. 


•il8  Tin;  ArriioKii'Y  (V:\n  2 

trade  or  Inisinoss  to  which  tlu-y  relate,  arc  principles  loo  well  estab- 
lislicil  to  he  (|uestione(l  lunv.  Numerous  examples  arc  to  he  found 
anioiij;  the  cases  arising-  on  ])olicies  of  insurance;  ami  perhaps  no 
strouijer  case  can  be  found  than  that  of  three  days  ^vixce  allowed  in 
cases  of  bills  of  exchange.  lUit  to  entitle  a  usage  to  that  high  respect, 
it  must  be  a  reasonable  one.  It  must  be  for  the  benelit  of  trade  gen- 
erally, anil  not  for  the  con\enicnce  and  benefit  of  a  particular  class 
of  individuals.'-"  And  I  can  conceive  of  no  usage  that  will  authorize 
a  departure  from  positive  instructions.  The  instructions  of  a  prin- 
cipal to  his  agent  make  the  law  by  which  he  is  to  l)e  governed.  And 
to  authorize  him  to  depart  from  them  would  be  depriving  the  j^ar- 
ties  of  the  privilege  of  making  their  own  terms.  I  can  sec  no  benefit 
resulting  to  the  community  from  such  usage.  It  is  calculated  rather 
to  destroy  that  confidence  which  is  necessary  for  the  encouragement 
of  trade.  No  planter  would  dare  to  trust  his  property  in  the  hands 
of  a  factor  upon  such  terms.  That  such  courtesy  has  been  indulged 
until  now,  and  that  it  would  be  thought  uncivil  to  refuse  it,  I  have 
no  doubt ;  and  I  have  as  little  doubt  that  any  factor  attempting  a  dif- 
ferent method  of  doing  business  would  suiTer  by  it.  But  let  it  once 
become  general,  and  no  inconvenience  would  result.  Let  it  be  under- 
stood that  a  factor  is  to  give  indulgence  at  his  own  risk,  and  that  he 
is  not  to  sacrifice  the  interest  of  the  planter  to  the  feelings  of  the 
merchant,  and  the  evil  will  correct  itself. 

I  do  not  mean  to  say  that  no  confidence  is  to  be  placed  in  the  man 
of  good  credit,  or  that  property  may  not,  in  any  instance,  be  deliv- 
ered to  the  purchaser  until  the  money  is  paid.  On  the  contrary  all 
the  confidence  which  is  necessary,  in  the  usual  course  of  business, 
I  think  ought  to  be  allowed.  I  should  have  thought  that  if  the  factors 
had  received  a  check  on  a  bank  for  the  money  when  they  delivered 
the  rice,  that  they  would  have  acted  within  the  scope  of  their  author- 
ity, even  though  it  had  been  dishonored.  Such  conduct  in  a  pur- 
chaser would  have  been  a  species  of  swindling  against  which  it  could 
not  have  been  expected  that  the  seller  would  have  been  guarded.  The 
whole  doctrine,  indeed,  may  be  expressed  in  a  few  words.  If  a  factor 
reposes  a  confidence  which  amounts  to  giving  credit  to  a  purchaser, 
when  he  has  been  directed  to  sell  for  cash,  he  does  it  at  his  own  risk, 
and  must  be  answerable  for  the  consequences.     *     *     *  ^^ 

Motion  for  a  new  trial  refused. 

20  Accord:  Hall  v.  Storrs,  7  Wis.  253  (185S):  "The  general  rule  in  regard 
to  the  admissil  ility  of  usage  requires  that  it  should  be  reusonalde,  certain, 
and  consistent  with  the  general  known  import  of  the  words  used  in  the  con- 
tract to  which  the  usage  is  to  be  applied."  Kedheld,  J.,  in  ("atlin  v.  Smith,  24 
Vt.  85  asni).  Cf.  Smith  v.  Wilson,  3  B.  &  Adol.  72.S  (ls:{2);  Clark  v.  ^'an 
Northwick,  1  I'ick.  .'54.'5  (1823).  Proof  of  u.sage  is  admissible  to  interpret  the 
meaning  of  the  contract,  or,  where  its  meaning  is  ecjuivocal  or  oliscure,  to 
ji><:'ertain  its  nature  and  extent,  but  not  to  vary  its  terms,  or  introduce  new 
conditions,  or  contravene  the  specilic  instructions  to  the  agent.  Tar.sons  v. 
Martin,  11  Gray.  Ill  (1S5S^ 

-1  The  dissenting  opinion  of  Cheves,  J.,  is  omitted. 


Ch.  1)  NATURE    AND    EXTENT  319 

SECTION  3.— APPARENT  AUTHORITY 

I.    Ix    GlvXERAI, 


PICKERING  V.  BUSK. 

(Court  of  King's  Bench.  1S12.    15  East,  38,  13  Rev.  Rep.  .3G4.) 

Trover  for  hemp.  Swallow,  a  broker,  had  bought  for  plaintiff  two 
parcels  of  hemp,  one  of  which  was  transferred  in  the  books  of  the 
wharfinger  to  the  name  of  Swallow,  the  other  to  the  name  of  Picker- 
ing or  Swallow.  The  hemp  was  paid  for  by  the  plaintiff,  and  later 
sold  by  Swallow  to  defendant's  assignor  in  bankruptcy. 

Lord  EllExborough,  C.  J.  It  cannot  fairly  be  questioned  in 
this  case  but  that  Swallow  had  an  implied  authority  to  sell.  Strangers 
can  only  look  to  the  acts  of  the  parties,  and  to  the  external  indicia 
of  property,  and  not  to  the  private  communications  which  may  pass 
between  a  principal  and  his  broker,  and  if  a  person  authorize  another 
to  assume  the  apparent  right  of  disposing  of  property  in  the  ordinary 
course  of  trade,  it  must  be  presumed  that  the  apparent  authority  is 
the  real  authority,  I  cannot  subscribe  to  the  doctrine,  that  a  broker's 
engagements  are  necessarily  and  in  all  cases  limited  to  his  actual  au- 
thority, the  reality  of  which  is  afterwards  to  be  tried  by  the  fact. 
It  is  clear  that  he  may  bind  his  principal  within  the  limits  of  the  au- 
thority with  which  he  has  been  apparently  clolhcd  l)y  the  principal 
in  respect  of  the  subject  matter;  and  there  would  l)e  no  safety  in 
mercantile  transactions  if  he  could  not.  If  the  i)rincipal  send  his  com- 
modity to  a  place,  where  it  is  the  ordinary  business  of  the  person  to 
whom  it  is  confided  to  sell,  it  must  be  intended  that  the  commodity 
was  sent  thither  for  the  purpose  of  sale.  If  the  owner  of  a  horse 
send  it  to  a  repository  of  sale,  can  it  be  implied  that  he  sent  it  thither 
ffjr  any  other  purjjosc  than  that  of  sale?  Or  if  one  send  goods  to 
an  auction-room,  can  it  be  supposed  that  he  sent  them  thither  merely 
for  safe  custody?  Where  the  commodity  is  sent  in  such  a  way  and 
to  such  a  i)lace  as  to  exhibit  an  apparent  i)urpose  of  sale,  the  prin- 
cijn'il  will  be  bound,  and  the  purchaser  safe. 

'J'he  case  oi  a  factor  not  being  able  to  pledge  the  goods  of  his  prin- 
cij)al  confided  to  him  for  sale,  though  clothed  with  an  apparent  own- 
ership, has  been  pressed  upon  us  in  the  argumcTit,  and  considerably 
distressed  our  decision.  The  court,  however,  will  decide  that  (|ues- 
tif)n  when  it  arises,  consistently  with  the  principle  on  which  the  ])res- 
ent  decision  is  founded.  It  was  a  hard  doctrine  when  the  ])awnee 
was  told  that  the  pledger  of  the  goods  had  no  authority  to  pledge 
thei/i,  being  a  mere  factor  for  sale;  and  yet  since  the  case  of  I'ater- 
so'i  V.  Ta'^h.  that  rloctrinc   has  never  been   overtunutl.      I    rcnicinbcr 


olio  TIIF3    AUTHORITY  (Part   2 

Mr.  Wallace  arguing  in  Canipboll  v.  \\'rig1it.  4  Rurr.  20-16,  that  the 
bills  of  lading  ought  to  designate  the  consignee  as  factor,  otherwise 
it  was  but  just  that  the  consignors  should  abide  by  the  consequence 
of  having  misled  the  pawnees.  The  present  case,  however,  is  not 
the  case  of  a  pawn,  but  that  of  a  sale  by  a  broker  having  the  posses- 
sion for  the  purpose  of  sale.  The  sale  was  made  by  a  person  who 
had  all  the  indicia  of  property ;  the  hemp  could  only  have  been  trans- 
ferred into  his  name  for  the  purpose  of  sale;  and  the  party  who  has 
so  transferred  it  cannot  now  rescind  the  contract.  If  the  plaintiff 
had  intended  to  retain  the  dominion  over  the  hemp,  he  should  have 
placed  it  in  the  wharfinger's  books  in  his  own  name. 


GILLMAN  V.  ROBINSON." 

(At  Nisi  Trins  in  the  Court  of  Common  Pleas,  1825.    1  Car.  &  P.  642.  Ryan  & 
M.  226,  28  Rev.  Rep.  795,  12  E.  C.  L.  364.) 

Assumpsit  for  goods  sold.  One  Womack  ordered  goods  on  defend- 
ant's account,  but  intercepted  them  on  the  way,  and  applied  them 
to  his  own  use.  He  had  bought  goods  of  plaintiffs  and  others  several 
times  before  as  the  agent  of  defendant,  for  which  defendant  had  paid. 

Best,  C.  J.  Upon  principle,  if  a  man  holds  another  out  to  the 
world  as  his  general  agent,  he  is  responsible  for  his  acts;  and  it  is 
important  that  it  should  be  so,  because,  otherwise,  a  man  might  ac- 
credit another,  and,  after  he  had  cheated  many  to  their  ruin,  turn 
round  and  say,  Though  this  man  appeared  as  my  agent,  yet  he  had 
no  authority  from  me.  You  must  be  satisfied,  not  only  that  the  goods 
were  ordered  for  the  defendant,  but  that  the  authority  of  the  party 
ordering  them  was  so  far  recognized  as  to  render  the  defendant  re- 
sponsible. It  is  admitted,  that,  in  the  cases  of  policies  and  bills  of 
exchange,  agency  is  proved  by  several  instances.  This  feature  in 
the  law  of  agency  is  not  confined  to  those  cases,  but  applies  equally 
and  similarly  to  the  ordering  of  goods. 

Verdict  for  the  plaintiffs.  v 

ANTRIM  IRON  CO.  v.  ANDERSON.    ^ 

(Supreme  Court  of  Michigan,  1905.     140  Mich.  702,  104  N,  W.  319,  112  Am. 

St.  Rep.  434.) 

Carpenter,  J.^'  Plaintiff  brings  this  action  of  replevin  to  recover 
timber  cut  from  section  31,  Star  township,  Antrim  county,  Mich., 
by  one  Elgie  Dow,  and  by  Dow  sold  to  defendant.  On  the  10th  of 
September,  1902,  plaintiff,  the  owner  of  said  timber,  acting  through 

22  Another  case,  based  upon  orders  of  the  same  agent,  was  similarly  de- 
cided in  the  Court  of  King's  Bench.  Todd  v.  Robinson,  Ryan  &  Moody,  217, 
21  E.  C.  L.  736  (182.5). 

2  3  Part  of  the  opinion  is  omitted. 


Ch.  1)  NATURE    AXD    EXTENT  321 

its  agent.  Charles  L.  BoHo,  entered  into  a  contract  with  Dow,  whereby 
Dow  agreed  to  cut,  skid,  draw,  and  load  on  cars  the  timber  in  ques- 
tion and  the  timber  standing  on  four  other  sections  belonging  to 
plaintiff.  In  February,  1903,  this  contract  was  rescinded,  and  a  new 
and  oral  contract  made,  by  which  Dow  purchased  from  the  plaintiff, 
through  said  Bolio,  its  agent,  certain  timber  standing  on  the  land  cov- 
ered by  the  former  written  contract. 

There  is  a  dispute  as  to  what  standing  timber  was  embraced  in 
this  new  oral  contract.  Plaintiff's  testimony  tends  to  prove  that  it 
covered  all  the  standing  timber  embraced  in  the  written  contract,  ex- 
cept that  on  section  31.  Defendant's  testimony  tends  to  prove  that 
it  covered  the  standing  timber  on  all  the  land  embraced  within  the 
written  contract,  including  that  on  section  31.  At  the  time  this  oral 
contract  was  made  it  was  contemplated  by  Bolio  and  Dow  that  it 
should  be  put  in  writing;  and  that  in  the  meantime,  according  to  the 
testimony  of  the  defendant,  Dow  might  enter  upon  the  lands,  and 
commence  cutting  and  removing  the  timber.  Bolio  testifies  that  he 
subsequently  did  execute  a  writing,  and  mail  it  to  Dow,  and  that  in 
this  writing  the  timber  standing  on  section  31  was  not  included.  Dow 
testifies  that  this  writing  was  never  received  by  him,  and  that  before 
he  was  interfered  with  he  had  cut  the  timber  in  question.  It  is  con- 
ceded that  the  consideration  paid  by  Dow  was  actually  received  by 
plaintiff.  Plaintiff  never  gave  Bolio  any  written  authority  to  act  for 
it,  nor  any  express  verbal  authority  to  sell  the  timber  standing  on 
section  31.  The  issue  was  submitted  to  a  jury,  who  rendered  a  ver- 
dict for  the  defendant.  Plaintiff'  brings  the  case  to  this  court,  and 
urges  many  reasons  why  the  judgment  entered  on  said  verdict  should 
be  reversed. 

We  answer  many  of  those  reasons  by  saying,  first,  though  the  con- 
tract to  sell  the  standing  timber  was  invalid  as  a  contract  because  not 
in  writing  (see  Russell  v.  Myers,  32  Mich.  522),  it  was  good  as  a  li- 
cense, and  the  timber,  having  been  cut  before  the  license  was  revoked, 
became  the  property  of  Dow ;  second,  it  was  not  necessary  that  the 
agent  who  gave  this  license  should  have  written  authority.  Spalding 
V.  Archibald,  52  Mich.  365,  17  N.  W.  940,  50  Am.  Rep.  253,  is  author- 
ity for  each  of  the  foregoing  propositions. 

Plaintiff  contends  that  there  was  no  evidence  tending  to  prove  that 
Bolio  had  even  verbal  authority  to  sell  this  timber  to  Dow.  The  un- 
di.sputed  evidence  shows  that  Bolio  did  have  authority  to  contract 
with  Dow  for  the  lumbering  of  all  this  limber,  and  that  he  also  had 
authority  to  sell  Dow  all  the  standing  timber  covered  by  said  contract 
except  that  on  .section  31.  There  was  also  evidence  that  Dow  bought 
the  timber  believing  Bolio  had  authority  to  sell  it.  The  legal  rule 
applicable  to  this  case  is  correctly  stated  by  Mr.  Mechem  in  his  work 
on  Agency  (section  2>^?>)  as  follows:  "The  principal  is  bound  to  third 
persons  who  have  relied  thereon  in  good  faith  and  in  ignorance  of 

(ioDD.I'K.iS:  A. — L'l 


\ 


X 


IV22  Ti'i3  AnMioiuTY  (Part  2 

any  limitations  or  restrictions  by  the  aiiparont  antliority  lie  has  <;ivcn 
to  the  ajjeiit,  and  not  by  the  actual  or  express  authority  where  that 
ditTers  from  the  apparent ;  and  this,  too.  whcihcr  tlie  aj^cncy  he  a 
general  or  a  special  one."  '^ 

Under  this  rule  it  cannot  be  said  that  ]\A\o  ditl  mil  have  verbal 
autluirity  to  make  the  contract  in  question.  'J'he  court  charged,  in 
etYect.  that  the  jury  might  fuid  that  plaintiff  ratilied  the  action  of  its 
agent,  Bolio.  Plaintiff  contends  that  there  was  no  evidence  justifying 
this  charge.  If  so,  the  charge  was  not  erroneous,  because  it  bore  only 
upon  the  question  of  Bolio's  authority,  and  under  the  rule  WjC  have  just 
stated  the  undisputed  testimony  established  that  autl/»or'it\/|.     *     *     * 

INV.  CO.|\.8J\L-^ 

(Supreme  Court  of  Nebraslia,  1895.    40  Neb.  480,  64  N.  W.  1100.) 


A^'-^HNSTON  V.  MILWAUKEE  &  W 


Replevin.     Judgment  for  plaintiff,  and  defendant  brings  error. 

Irvine,  C.-®  This  was  an  action  of  replevin  for  250  head  of  cattle 
by  the  defendant  in  error  against  the  plaintiffs  in  error.  On  the  first 
trial  there  was  a  verdict  and  judgment  in  favor  of  the  defendants  in 
the  district  court.  This  judgment  was  reversed  by  this  court.  In- 
vestment Co.  V.  Johnston,  35  Neb.  554,  53  N.  W.  475.  The  case  has 
been  retried,  resulting  in  a  verdict  and  judgment  for  the  plaintiff,  and 
the  defendants  now  prosecute  error.     *     *     * 

On  the  trial  in  the  district  court  a  special  verdict  was  taken, 
whereby,  under  instructions  conformable  to  the  former  opinion,  the 
jury  found  that  no  such  custom  prevailed.  The  jury  also  found  that, 
prior  to  the  sale  of  the  cattle  in  question,  Adams  had  not,  with  the 
plaintift''s  knowledge,  performed  any  similar  acts,  and  under  a  per- 
emptory instruction  there  was  a  finding  that  Adams  possessed  no  ac- 
tual authority  to  make  the  sale.  There  were  other  findings,  not  ma- 
terial to  the  questions  which  we  shall  consider.  The  former  opinion 
strongly  implied  a  holding  that  no  actual  authority  existed  for  the 
sale  made  by  Adams,  and  we  shall  not  here  reconsider  that  question. 
The  judgment  in  favor  of  the  plaintiff  was  evidently  entered  on  the 
theory  that,  in  the  absence  of  such  actual  authority,  or  apparent,  con- 
ferred either  by  a  custom  pf  business  or  by  the  exercise  of  prior  sim- 
ilar acts,  the  plaintiff  coulld  not  be  bound  by  Adams'  acts. 

One  instruction  given  h\  the  court  clearly  shows  that  the  judgment 
proceeded  on  this  theory.  \This  instruction  was  as  follows:   "An  act 

24  See  Bentley  v.  Doggett,  5l\wis.  224,  8  N.  W.  155,  87  Am.  Rep.  827  (1881), 
^^  quoting  Story  on  Agency,  §  127.     "The  principal  is  bound  by  all  the  acts  of 

\  hi.s  agent  within  the  scope  of  the  authority  whicli  he  holds  him  out  to  the 

^  world  to  po.ssess."    Baker  v.  K.  C,  S.  J.  &  C.  B.  Ky.  Co.,  91  xMo.  152,  3  ».  W. 

V  486  (1887). 

0  -^  Part  of  the  opinion  is  omitted. 


Ch.  1)  NATURE    AND    EXTENT  323 

is  within  the  apparent  authority  of  the  agent  when  it  is  of  like  char- 
acter as  that  of  prior  acts  performed  by  him  for  the  same  principal, 
and  which  such  principal,  knowing  the  same,  sanctioned  or  ratified. 
The  act  of  an  agent  within  his  apparent,  but  not  within  his  real,  au- 
thority, will  bind  his  principal  only  in  case  the  person  dealing  with 
such  agent  knew  of  such  prior  acts,  and  dealt  with  the  agent  in  reli- 
ance thereon ;  and  in  this  case  you  are  instructed  that,  unless  you 
find  from  a  preponderance  of  the  evidence  that  Thomas  R.  Adams 
had,  prior  to  the  sale  of  these  cattle,  performed  acts  of  a  similar  char- 
acter, and  that  the  plaintiff,  after  knowledge  or  notice  thereof,  sanc- 
tioned or  ratified  such  prior  similar  acts,  then  you  will  not  be  justi- 
fied in  finding  that  Adams  possessed  the  apparent  authority  to  sell 
the  cattle  in  question.  The  defendants  cannot  base  any  rights  in  this 
action  upon  the  ground  that  they  dealt  with  Thomas  R.  Adams  as 
having  the  apparent  authority  to  sell  the  cattle,  unless  it  appears  from 
the  evidence  that  they,  or  one  of  them,  knew  of  facts  giving  such  ap- 
parent authority  to  Adams,  and  acted  upon  such  appearances  in  the 
transaction  of  purchasing  the  cattle  in  question.  The  mere  fact  that 
the  plaintiff  had  intrusted  the  care,  management,  and  possession  of 
these  cattle  to  Thomas  R.  xA.dams  gave  him  no  authority  to  sell  them. 
Although  authority  on  the  part  of  an  agent  may,  in  proper  cases,  be 
imjjlied  from  the  words  and  conduct  of  the  parties,  or  from  the  cir-  r 

cumstances  of  the  case,  yet  the  extent  of  the  authority  so  implied  can-  v, 

not  exceed  the  necessary  and  legitimate  effect  of  the  facts  from  which  N.   S-* 

it  is  inferred,  but  must  be  limited  to  the  performance  of  like  acts  un-  x^'^ 

der  like  circumstances.  The  authority,  if  implied  at  all,  can  only 
be  implied  from  facts." 

In  the  light  of  all  the  instructions  it  was  clearly  the  view  of  the 
court  that,  having  disposed  of  the  question  of  actual  authority,  and 
the  jury  having  found  that  no  such  general  custom  existed  as  would, 
under  the  former  oijinion  of  the  court,  confer  authority  upon  the 
agent,  no  apparent  authority  could  exist,  unless  by  the  exercise  by 
the  agent  of  such  authority  in  the  past,  supplemented  by  knowledge 
of  those  acts  on  the  ])art  of  the  company,  and  by  similar  knowledge 
on  the  part  of  defendants,  relied  on  by  them  in  making  the  purchase. 
It  is  familiar  law  that  a  princi]ial  is  bound  by  the  acts  of  his  agent 
not  only  when  performed  within  the  scope  of  his  actual  or  implied 
authority,  but  when  within  the  scope  of  aj^parent  authority  conferred 
upon  him  by  the  principal.  There  have  been  many  cases  distinguish- 
ing in  this  respect  between  a  general  agent  and  a  special  agent,  and 
perhajjs  this  distinction  is  not  witlu^ut  value,  although  in  most  cases 
it  simjjly  throws  back  one  ste])  the  process  of  investigation.  Indeed, 
with  regard  to  acts  of  corporations,  it  has  often  been  said  that  the  only 
general  agents  are  its  directors,  acting  in  their  corporate  capacity. 
Strict  aj)plication  of  the  distinction  would  therefore  constitute  all  acts 
of  corporations  not  performed  under  a  resohition  of  the  board  of  di- 
•'cctors  the  acts  of  s|)ccial  agents,  anrl  would  re(|uire  all  per.sons  deal- 


JjAA-^- 


(■If 


<^ 


.  .A^orxA 


fJL^7, 


o-l  THE   AIlTlIOKITY  (Part   2 

ing  with  corporations,  ^except  in  jmrsuanoc  of  sncli  resolutions,  to 
IMOceed  at  tlieir  peril. 

This,  at  one  stage  of  the  law,  niiqht  have  been  a  proper  doctrine. 
lUit  the  courts  must  lake  notice  of  the  fact  thaj:  the  province  of  cor- 
porations is  now  vastly  enlarged ;  that  corporations  now  exist,  not 
only  for  the  transaction  of  public  or  ecclesiastical  affairs,  but  for  the 
jHirpose  of  carrying  on  ordinary  business  transactions.  We  have  now 
private  corporations  not  only  operating  railroads  and  other  institu- 
tions having  quasi  public  functions,  but  also  corporations  conducting 
banks,  manufacturing  establishments,  live-stock  raising,  as  in  the  pres- 
ent instance,  and  even  retail  shops.  The  domain  of  individual  en- 
terprise has,  in  other  words,  been  invaded  by  corporations ;  and  in 
the  conduct  of  such  enterprises  we  can  see  no  reason  and  no  prin- 
ciple of  law  requiring  the  application  of  rules  to  such  corporations 
different  from  those  applying  to  individuals  under  similar  circum- 
stances, except  wdiere  the  acts  relate  to  the  operations  of  the  corpora- 
tion in  its  capacity  as  such.  What  we  mean  to  express  by  this  is  that 
in  transactions  having  no  relation  to  the  corporation  in  its  corporate 
capacity,  but  solely  in  regard  to  the  conduct  of  its  business  affairs,  the 
general  principles  applicable  to  individuals  should  apply.     *     *     * 

The  sale  of  these  cattle  was  clearly  within  the  power  of  the  cor- 
poration. The  only  question  was  the  apparent  authority  of  this  par- 
ticular agent  of  the  corporation  to  make  the  sale ;  and  we  may  thus 
divest  ourselves  in  the  present  inquiry  of  all  investigation  as  to  cor- 
porate functions,  and  consider  whether  or  not  there  was  error  in 
the  judgment,  independent  of  the  fact  that  the  plaintiff  is  a  corpora- 
tion. A  review  of  the  authorities  bearing  on  the  question  would  be 
almost  endless,  and  their  confusion  is  such  that  it  would  hardly  be 
profitable.  We  conceive  that  the  rule  whereby  a  principal  is  bound 
by  the  acts  of  his  agent  beyond  his  actual  authority,  but  within  its 
apparent  scope,  is  founded,  in  the  first  place,  on  the  maxim  that, 
where  one  of  t\vg  innocent  persons  must  suffer,  it  shx^uld  be  that 
one  who  misled  me  other  into  the  contract  (Story,  Ag'.h§  443),  and 
this  doctrine  is  founded  on  a  broad  principle  of  equitable  estoppel  or 
estoppel  in  pais.  IWe  conceive  that  a  proper  statement  of  it  with  ref- 
erence to  such  a  case  as  we  have  before  us  is  as  follows:,*  That  where 
a  principal  has,  bj:_his  voluntary  act,  placed  an  agent  inijuch  a  situ- 
ation that  a  person  of  ordinary  prudence,  conversant  w^h  business 
usages  and  the  nature  of  the  particular  business,  is  justified  in  pre- 
suming that  such  agent  has  authority  tcf"  perform  on  behalf  of  his 
principal  a  particular  act,  such  particular  act\  having  been  performed, 
the  principal  is  estopped,  as  against  such  inn(^cent  third  person,  from 
denying  the  agent's  authority  to  perform  it. 

We  do  not  think  that,  in  order  to  bring  a  ca^e  within  this  principle, 
it  is  in  all  cases  necessary  to  show  that  by  general  custom,  as  defined 
in  the  former  opinion  of  the  court,  such  agenirs  have  such  authority. 
Nor  do  we  think  that  it  is  necessary  in  all/cases  to  show  that  the 


Ch.  1)  NATURE    AND    EXTENT  325 

same  agent  had  previously  performed  similar  acts ;  that  such  acts  were 
known  to  the  principal ;  that  the  third  person  also  knew  of  them,  and 
relied  on  them  in  the  transaction ;  or  even  that  similar  agents  had  in 
the  past  performed  such  acts.  A  number  of  elements  may  influence 
the  solution  of  the  question.  In  this  case  the  corporation  was  located 
in  Milwaukee,  in  the  state  of  \\''isconsin.  It  was  formed  for  the  pur- 
pose of  doing  business  in  Wyoming,  and  most  of  its  business  was 
there  conducted.  The  very  fact  that  the  corporation  and  its  general 
officers  held  their  office  at  a  remote  point  was  an  element  for  consid- 
eration. Rathbun  v.  Snow,  supra  [123  N.  Y.  343,  25  N.  E.  379,  10 
L.  R.  A.  355].  One  might  be  justified  in  dealing  with  a  person  in 
apparent  management  of  the  business  in  Wyoming,  where  the  office 
of  the  corporation  was  in  a  distant  state,  where  he  would  not  be  so 
justified  if  he  found  the  general  offices  and  general  officers  of  the  cor- 
poration at  or  near  the  place  where  the  business  was  conducted.  Fur- 
thermore, the  general  nature  of  the  business  and  its  requirements 
were  elements  for  consideration.  Furniture  Co.  v.  Hardaway,  104 
Ala.  100,  16  South.  29.  It  might  well  be  that  one  would  be  justified 
in  buying  ripe  fruit  from  one  found  in  charge  of  orchards  where 
he  might  not  be  justified  in  dealing  with  such  a  person  in  goods  not 
perishable  in  their  nature.  Business  usage  might  have  its  influence, 
although  not  so  general  and  uniform,  as  by  implying  notice  to  the 
principal  to  also  apply  that  such  custom  was  in  view  when  the  agent 
was  appointed.  "^ 

We  mention  these  instances  merely  by  way  of  illustration,  and  Ave 
hold  that  the  apparent  authority  of  the  agent  beyond  his  actaal  au- 
thority does  not  depend  solely  upon  custom  or  solely  on  the  perform- 
ance of  previous  similar  acts,  whether  known  or  unknown  to  a  person 
dealing  with  him;  but  that,  subject  to  the  general  rule  we  have  above 
stated,  and  to  general  legal  principles,  the  question  is  one  of  fact, 
to  be  determined  by  the  jury  under  all  the  circumstances  of  the  trans- 
action and  the  business  as  disclosed  by  the  evidence. 

It  follows  that  the  special  findings  referred  to  were  insufficient 
whereon  to  found  the  judgment,  and  that  the  instruction  quoted  was 
erroneous.     Reversed  and  remanded.^" 

A 
2«  FoUowod  In  Harrison  Nut.  I'.nnk  v.  Austin,  65  Neh.  a32,  91  N.  W.  540, 
59  L.  Fi.  A.  'I'M,  101  Am.  Sf.  Kep.  WA)  (1002);  Same  v.  Williams.  2  Neb.  (Unof.) 
400.  S9  N.  W.  24.")  (1002);  Thom.son  v.  Shclton.  49  Net*.  044.  OS  N.  W.  10,15 
n.^-nO).  In  Sf.  Louis  fJunnlns  Adv.  Co.  v.  Waiiiimaker.  115  Mo.  App.  270.  90 
S.  \V.  7.''.7  (190.")),  ante.  p.  1.55,  ai)i)aront  authority  is  dpfincd  as  "such  atilhority 
as  a  rcasnnahly  i)rud('iit  man,  usin^  diligence  and  di.sciH-tion,  in  view  of  the 
Iirlnripal's  fonduct,  would  naturally  supiiose  the  ajrent  to  jtosscss.  Much  of 
the  ai)p;irciit  authority  f)f  an  a^cnt.  whether  asserted  as  iiicideiifal.  or  on 
usaue,  or  on  the  agent's  previous  course  of  <lealin;:  rests  on  tlie  i)riMci|)les  of 
file  doctrine  of  estoppel.  The  fjuestion  is  rather  wliat  tlie  third  person  had 
the  ri;,'ht  tfi  helleve  cdnceridnu  the  audit's  |iowers.  than  what  powers  the 
priiKijial  iiifendfd  tf»  confer."  .^ee.  also,  Smith  V.  McGuire,  3  II.  &  N.  C54,  27 
L.  T.  Exch.    HI."*,  0  W.  It.  720  (ls.")S). 


326  TiiK  AUTiioKiTY  (Part  2 

KKTTH  V   TT1<.RSCIIRERG  OPTICAL  CO. 

(Siipivmo  Com-t  of  Arkansas,  1S8C.     4S  Ark.  i:'.S.  2  S.  W.  777.) 

Action  lor  iji51.75  on  ojjcn  account  for  t^oods  .si:)Ul  by  plaintiff's 
traveling:  ag^ent.  Defense  that  agent  ag;rec{l  not  to  sell  to  any  one 
else  in  the  same  town,  and  that  he  sold  to  two  others  on  the  same 
agreement.  On  learning  this,  defendant  refused  to  take  the  goods, 
and  notified  the  plaintiff.    Trial  and  judgment  for  plaintifif. 

Smith,  J.=^  *  *  *  'j^i-,g  j^^j-y  were  told,  in  substance,  to  disre- 
gard all  testimony  as  to  the  agreement  not  to  sell  to  any  other  par- 
ties unless  it  was  shown  that  the  agent  was  a  general  agent,  or  had 
authority  from  plaintiff  to  make  such  contract.  And  the  court  re- 
jected prayers  to  the  effect  that  if  plaintiff's  agents  agreed  not  to 
sell  the  same  class  of  goods  to  any  person  in  Booneville,  and  this 
was  an  inducement  moving  defendant  to  make  the  purchase,  and  that 
plaintiff's  agent  violated  this  agreement  and  sold  to  other  parties, 
this  was  a  fraud  on  defendant,  entitling  him  to  rescind  the  contract; 
also,  that  a  principal  claiming  the  benefit  of  a  contract  made  by  his 
agent  is  bound  by  the  terms  of  such  contract,  unless  the  other  had 
notice  of  the  want  of  authority  in  the  agent. 

I  A  special  aghmty  exists  when  there  is  a  delegation  of  authority  to 
cV  a  single  act.  uA  general  agency  is  where  there  is  a  delegation  to 
dcT-  all  acts  coi/^cted  with  a  particular  business  or  employment. 
Xow,  A.  HirscinlArg,  so  far  as  the  defendant  knew,  had  a  general 
authority  to  sell  the  plaintiff's  goods ;  his  agency  not  being  limited  to 
any  particular  mode  of  doing  it.  In  reality,  as  the  proof  discloses, 
his  authority,  although  it  extended  to  do  acts  generally  in  the  course 
of  his  employment,  was  yet  qualified  and  restrained  by  instructions  of 
a  special  nature.  But  these  instructions  had  never  been  communi- 
cated to  the  defendant.  The  rule  in  such  a  case  is  the  agent  is 
deemed,  as  to  the  persons  dealing  with  him  in  ignorance  of  such 
special  limitations,  conditions,  and  instructions,  to  be  a  general 
agent,  although,  as  between  himself  and  his  principal,  he  may  be  only 
a  special  agent.  In  other  words,  a  general  agency  does  not  import 
an  unqualified  authority,  but  that  which  is  derived  from  a  multitude 
of  instances  or  in  the  general  course  of  an  employment  or  business. 
And  the  principal  w^ill  be  bound  by  the  acts  of  his  agent  within  the 
scope  of  the  general  authority  conferred  on  him,  although  he  violates 
by  those  acts  his  private  directions,  which  are  given  to  him  by  his 
principal,  limiting,  qualifying,  suspending,  or  prohibiting  the  exercise 
of  such  authority  under  particular  circumstances.^^     A  third  person 

2  7  Part  of  the  opinion  is  omitted. 

2  8  If  the  agent  has  apparent  authority,  third  persons  dealing  with  him  are 
equally  protected,  whether  in  point  of  fact  he  had  auth(jrity  or  not.  They 
<annot  be  affected  by  private  understandings  between  the  parties.  McAlpni 
V   Zillcr,  17  Tex.  508  (iSijf!),  Trickett  v.  Touilinson,  l.'i  C.  B.  (N.  S.)  66.'5,  7  L. 


Ch.  1)  NATURE    AND    EXTENT  327 

has  a  right  to  assume,  without  notice  to  the  contrary,  that  the  travel- 
ing salesman  of  a  wholesale  house  has  an  unqualified  authority  to  act 
for  the  firm  he  represents  in  all  matters  which  come  within  the  scope 
of  that  employment.  Smith,  Merc.  Law  (3d  Ed.)  173;  Story,  Ag. 
(8th  Ed.)  §§  17-19,  126,  127;  Paley,  Ag.  (4th  Am.  Ed.)  *199  et  scq., 
and  notes;  2  Kent,  Comm.  (12th  Ed.)  *620;  Brooks  v.  Perry,  23 
Ark.  32;  Leake  v.  Sutherland,  25  Ark.  219;  Jacobson  v.  Poinde.xter, 
42  Ark.  97;  Mever  v.  Stone,  46  Ark.  210,  55  Am.  Rep.  577;  Butler 
V.  :Maples,  9  Wall.  766,  19  L.  Ed.  822;  Insurance  Co.  v.  Wilkinson, 
13  Wall.  222,  20  L.  Ed.  617;  Insurance  Co.  v.  McCain,  96  U.  S.  84, 
24  L.  Ed.  653 ;  Bryant  v.  Moore,  26  Me.  84,  45  Am.  Dec.  96.  Thus, 
in  Minter  v.  Pacific  R.  R.,  41  Mo.  503,  97  Am.  Dec.  288,  the  baggage 
master  was,  by  the  printed  rules  of  a  railroad  company,  forbidden  to 
take  articles  of  merchandise  on  passenger  trains.  He  nevertheless 
took  a  carpet,  the  passenger  not  knowing  the  rule,  and  the  company 
was  held  liable  for  its  loss. 

The  true  question  for  the  jury,  then,  was  not  whether  A.  Hirsch- 
berg  had  real  authority,  but  whether  he  had  apparent  authority,  to 
make  the  contract  he  did  make.  It  follows  that  the  charge  of  the 
court  on  this  subject  was  wrong. 

A  contract  which  restrains  the  business  or  industrial  freedom  of  a 
person  within  reasonable  limits  is  not  against  pul)lic  policy.  Thus  a 
covenant  to  sell  patent  teeth  to  no  other  dentist  in  a  certain  town 
of  Vermont  was  held  valid  in  Clark  v.  Crosby,  37  Vt.  188,  and  so  a 
covenant  not  to  sell  any  furniture  in  his  line  to  any  in  the  town  of 
O.  but  B.  Roller  v.  Ott,  14  Kan.  609.  See  Greenh.  Pub.  Pol.  rule 
565. 

In  19  Amer.  Law  Rev.  962,  it  is  stated  that  the  supreme  court  of 
Texas,  in  Watkins  v.  Morley,  had  decided,  in  September,  1885,  that 
a  contract  by  a  drummer  not  to  sell  a  certain  class  of  goods  to  any 
other  merchant  in  a  town  except  A.,  is  within  the  apparent  scope  of 
his  authority,  and  is  binding  on  his  principal.  But  we  have  not  seen 
^tlic  full  report  of  that  case.  .A 

^'^^^'The  general  rule  is,  as  to  all  contracts  including  sales,  that  the  \ 
agent  is  authorized  to  do  whatever  is  usual  to  carry  out  the  object 
of  his  agency;  and  it  is  a  question  for  the  jury  to  determine  what 
is  usual.  If,  in  the  sale  of  the  goods  confided  to  him,  it  is  usual  in 
the  market  to  give  a  warranty,  the  agent  may  give  that  warranty  in 
order  to  eflfect  a  sale."  P>enj.  Sales  (4th  Am.  Ed.)  §  624,  and  cases 
cited;  Le  Roy  v.  Beard,  8  How.  451,  12  L.  Ed.  1131  ;  Scliuch.inlt  v. 
Allen's,  1  Wall.  359,  17  L.  Ed.  642;  Talmagc  v.  I'.icrhause,  ]().>  Ind. 
270,' 2'n.  E.  716;   Smilie  v.  Ilobbs,  64  N.  II.  75,  5  Atl.  711. 

T.  07K  100  E.  C  ]j.  f.ii.",  (is(;.";i.  .\  jiriiiciiiiil  Is  <'i|n;illy  IkhiikI  liy  tlic  Miitlior- 
Ity  wlilfli  Im"  JH'tinlly  kIvcs,  jiihI  liy  licit  wliich  by  his  own  txct  lif  .'ipprnrs  to 
Kivo.  Oslionic  &  <■<).  V.  Catt-wood  ('Ifx.  Civ.  App.)  74  S.  W.  72  (IIM).;).  'I'hls 
is  HO.  (Mitiiilly.  wlii'tlicr  lit"  is  !i  l'cuitmI  or  n  siicciai  nuciit  (Lister  v.  Alli-n,  ."'.I 
M<1.  nj.'?.  100  ,\iii.  lU'c.  7s  llsCiM).  tlioiiirli  a  jrciicral  am'iiry  aliows  iiiori'  JMlitndt' 
tliMii  .1  .-iMriiil   (Wilcox   V.  Hoiitli,  17  .Miss.    \ir,  ||SJS|). 


;V2S  TOR  AUTnoRiTT  (Part  2 

Tlie  rejected  prayers  set  out  a])ovo  sIkmiUI  also  have  been  given. 
When  an  agent  for  the  sale  of  property  is  acting  upon  the  Hne  of 
business  committed  to  him,  iiis  principal  is  chargealile  with  the  false 
representations  made  by  him.  Stravhorn  v.  Giles,  22  Ark.  517; 
Morton  v.  Scull,  23  Ark.  289;  Matlock  v.  Reppy,  47  Ark.  148,  14 
S.  W.  546.  The  plaintiff  cannot  recover  the  price  of  the  goods  with- 
out performing  the  condition  upon  which  the  sale  was  made. 

Reversed,  and  a  new  trial  ordered. 


PATTERSON  v.  NEAi;. 

(Supreme  Court  of  Alabama,  1902.     135  Ala.  477,  33  South.  39.) 

Appeal  from  judgment  of  $1,500  for  plaintiff,  on  the  ground  that 
the  court  refused  to  charge:  "If  the  jury  believe  the  evidence  they 
must  find  for  the  defendant." 

DowDKLL,  J.  While  the  complaint  in  this  case,  as  originally  filed 
and  afterwards  amended,  contained  a  number  of  counts,  the  cause 
was  tried  alone  on  the  seventh  count.  No  questions  are  raised  on 
the  pleadings.  By  the  seventh  count  the  plaintifif  claims  for  the 
death  of  his  minor  son,  a  boy  16  years  of  age,  who  was  killed  by 
falling  rock  while  he  was  digging  coal  in  the  defendant's  mine.  The 
complaint  avers  a  wrongful  employment  of  plaintiff's  minor  son  by 
the  defendant,  in  that  he  was  so  employed  to  dig  coal  without  the 
knowledge  and  consent  of  the  plaintifif,  his  father.  It  is  not  charged 
that  the  death  was  caused  by  any  negligence  on  the  part  of  the  de- 
fendant or  his  agents,  but  the  right  of  action  is  rested  upon  the 
wrongful  employment  as  alleged  in  the  complaint. 

On  the  trial  the  undisputed  evidence  showed :  That  Matthew  Neal, 
the  minor  son  of  the  plaintiff,  was  killed  by  falling  rock,  while  en- 
gaged in  mining  coal  in  one  of  the  several  mines  operated  by  the 
defendant.  Matthew  had  been  employed  by  the  defendant,  with  the 
knowledge  and  consent  of  the  plaintiff,  as  a  driver  in  the  mine ;  and, 
three  days  before  the  accident,  Matthew  exchanged  places  with  his 
brother,  who  was  employed  as  a  coal  digger  in  the  mine, — Matthew 
taking  the  place  of  his  brother  as  a  coal  digger,  and  the  brother  the 
place  of  Matthew  as  a  driver, — and  pending  this  exchange  of  places 
and  work  between  the  two  brothers  the  accident  resulting  in  the 
death  of  Matthew  occurred.  The  defendant,  Patterson,  was  at  the 
time  the  owner  and  operator  of  several  coal  mines,  including  the  one 
in  question.  Clark  was  the  general  superintendent  of  the  defendant's 
mining  business.  Winters  was  an  assistant  under  Clark,  and  was 
the  mine  boss  of  the  mine  in  question.  Clark  alone,  as  superintend- 
ent, was  given  authority  by  the  defendant  to  employ  coal  diggers  in 
the  mines.  Winters  had  no  such  authority  given  him.  That  his  au- 
thority and  duty  was  to  boss  and  direct  the  miners,  and  the  opera- 


Ch.  1)  NATURE    AND    EXTENT  329 

tions  in  the  mines.  That  sometimes  persons  would  applv  to  him  for 
employment  as  coal  diggers,  and  that  whenever  such  was  the  case  he 
would  report  the  application  for  employment  to  Clark,  who  would 
approve  or  disapprove,  and  that  he  never  employed  any  one  to  dig 
coal  without  having  first  obtained  the  approval  and  consent  of  Clark. 
That  whenever  Clark  employed  a  coal  digger  for  the  mine  in  ques- 
tion, he  sent  such  person  to  Winters,  who  assigned  the  coal  digger 
to  his  place  of  labor  in  the  mine,  and  that,  whenever  Clark  approved 
the  application  of  one  seeking  employment  through  Winters,  upon 
such  approval  or  consent  by  Clark  he  (Winters)  would  then  make 
the  employment,  and  assign  such  applicant  to  a  place  in  the  mine  to 
dig  coal.  It  is  not  pretended  that  either  the  defendant  or  Clark,  his 
general  superintendent,  employed  Matthew  to  dig  coal  in  the  mine, 
or  that  either  of  them  had  any  actual  knowledge  that  he  was  engaged 
in  that  work.  Neither  is  it  pretended  that  there  was  any  express  em- 
ployment of  Matthew  to  dig  coal  in  the  mine  by  Winters. 

The  first  contention  is  that  there  was  an  implied  contract  of  em- 
ployment with  Matthew  by  Winters,  and,  furthermore,  that  Winters 
had  implied  authority  to  employ,  by  reason  of  the  principal's  acqui- 
escence in  previous  acts  of  employment  of  coal  diggers  by  Winters. 
And  the  second  contention  of  the  plaintiff  is  that  Winters  had  ap- 
parent authority  to  give  employment  to  dig  coal  in  the  mine.  These 
contentions  are  based  upon  the  following  state  of  the  evidence  in  the 
record :  Winters  was  the  boss  of  the  mine,  and  superintended  the 
laborers  and  the  work  in  the  mine.  Two  or  three  witnesses  for  the 
plaintiff  testified  that  on  several  occasions  Winters  gave  employment 
to  persons  seeking  work  in  the  mines  as  coal  diggers,  and  assigned 
them  to  their  places  and  work,  but  also  stated  that  they  did  not  know 
and  could  not  say  whether  he  (Winters),  in  said  instances,  had  the 
previous  approval  and  consent  of  the  defendant  or  of  the  general 
superintendent,  Clark,  to  give  the  employment  to  said  persons.  In 
this  connection  the  testimony  of  Winters  was  that  he  had  never 
given  employment  to  any  person  whatever,  to  dig  coal,  without  hav- 
ing first  reported  the  application  of  such  person  to  Clark,  and  get- 
ting his  approval  and  consent  to  give  the  employment,  and,  when 
such  consent  was  obtained,  he  would  then  assign  the  applicant  to  his 
place  and  work  in  the  mine.  And  the  testimony  of  Clark  was  that  he 
never  knew  of  Winters  having  given  employment  to  any  person  to 
dig  coal  in  the  mine,  without  having  first  obtained  his  (Clark's)  ap- 
proval and  consent  to  employ  the  person. 

We  do  not  think,  upon  the  question  of  implied  authority,  growing 
out  of  a  knowledge  of  and  acquiescence  in  the  acts  of  the  agent  by 
the  principal,  there  is  any  material  cotiflict  in  the  evidence.  The  facts 
testified  to  by  plaintiff's  witnesses  as  to  the  employment  of  persons 
to  flig  coal  by  Winters  are  entirely  consistent  with  tlic  further  fact 
that  he  had  no  authority  to  employ,  and  that  in  the  given  instances 
the   employment   came   from   Clark.     Winters'   acts  and   conduct   in 


330  TiiK  Ai  riioKiTY  (Part  2 

this  respect  not  beiiij;:^  in  excess  of  or  inconsistent  with  authority  and 
duties  of  his  aj^encv.  they  are  not  such  as  that  a  knowledge  of  thcni 
hy  the  principal  wmild  raise  up  an  iuiphed  authorit\-  in  him  to  employ 
coal  ilii;i;ers.  We  are  cjuite  clear  that  the  evitlence  as  to  Winters' 
want  of  authority,  express  or  implied,  to  employ  ])crsons  to  dii^  coal 
in  the  mine,  is  free  from  any  contlict.  It  is  true  that  there  was  also 
eviileuce  on  the  part  of  the  plainlilT  tendiui;  to  show  that,  on  the  day 
of  the  exchange  of  places  between  the  two  brothers — Matthew  going 
into  the  mine  to  dig  coal — Winters,  being  informed  of  the  swap, 
made  no  objection,  and,  furthermore,  that  Winters  knew  that  Mat- 
thew was  digging  coal  from  that  time  on  luUil  the  accident,  which 
happened  three  days  later,  and  made  no  objection  to  it.  This,  with- 
out knowledge  on  the  part  of  the  defendant  or  his  superintendent, 
Clark,  was  of  itself  insutlficient  to  afTord  any  inference  of  ratification 
of  Winters'  conduct,  or  to  show  any  implied  authority  in  Winters  to 
employ  Matthew,  or  to  assent  to  his  changing  places  with  his 
brother. 

As  to  the  second  contention — that  Winters  was  clothed  with  ap- 
parent authority  to  contract  for  his  principal  with  persons  to  dig 
coal  in  the  mine — it  is  clear  that  the  case  is  not  one  where  the  doc- 
trine of  apparent  authority  has  any  application.  This  principle  of 
the  law  operates  by  w'ay  of  estoppel,  and  to  prevent  the  practice  of 
fraud.  If  the  plaintiff  had  contracted  with  Winters  for  the  employ- 
ment of  his  (plaintiff's)  son  to  mine  coal,  and  was  suing  for  his  son's 
wages,  and  the  defendant  should  deny  the  authority  of  Winters,  as 
agent,  to  make  the  contract,  the  doctrine  of  apparent  authority 
might  be  invoked..  The  doctrine  of  apparent  authority  can  be  in- 
voked only  by  one  who  has  been  misled  to  his  detriment  by  the  ap- 
pearance of  authority  in  an  agent  with  whom  he  deals,  though  not 
existing  in  fact.  The  principal  is  liable  for  the  agent's  act  within  the 
scope  of  his  actual  authority,  because  it  is  his  own  act,  and  is  liable 
for  the  agent's  act  within  the  scope  of  the  apparent  authority  which 
he  holds  the  agent  out  as  having,  but  which  in  fact  he  has  not,  be- 
cause to  dispute  the  existence  of  such  apparent  authority  would  en- 
able the  principal  to  commit  a  fraud  on  innocent  third  persons  rely- 
ing on  such  appearance.  1  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  p.  990. 
The  principal  may  not  hold  out  his  agent  to  the  world  as  possessing 
authority,  and  escape  liability  from  his  acts  in  dealing  with  innocent 
third  persons  within  the  scope  of  the  agency,  by  secret  limitations 
upon  his  authority.  But  if  the  party  dealing  with  the  agent  does  not 
rely  upon  his  apparent  authority,  the  principal  will  not  be  bound  by 
the  unauthorized  acts,  which  are  apparently,  but  not  actually,  within 
the  scope  of  the  agent's  authority.  Tallmadge  v.  Lounsbury,  50  N. 
Y.  St.  Rep.  531,  21  N.  Y.  Supp.  908. 

It  is  clear  that  the  plaintifif  here  did  not  rely  or  act  upon  any  ap- 
parent authority  in  the  agent.  The  boy  was  not  induced  to  dig 
coal  by  an  appearance  of  authority  in  Winters,  for  the  undisputcfl 


Ch.  1)  NATURE    AND    EXTENT  331 

evidence  shows  that  he  began  to  dig  coal  without  ever  having  con- 
sulted Winters.  We  are  unable  to  see  how  the  doctrine  of  apparent 
authority  can  have  any  application.  It  cannot  be  pretended  that 
either  the  plaintiff  or  his  son  was  misled  by  dealing  with  the  agent 
under  the  appearance  of  authority.  The  authorities  cited  in  the 
brief  of  appellee  on  this  question  are  all  cases  where  the  agent,  within 
the  scope  of  his  agency,  dealt  with  persons  relying  upon  his  apparent 
authority,  and  lay  down  the  doctrine  we  have  stated  above.  Not 
one  of  these  cases  is  analogous  in  the  facts  to  the  one  before  us. 

Our  conclusion  is  that,  on  the  law  and  the  undisputed  evidence  in 
this  case,  the  defendant  was  entitled  to  the  general  charge  as  re- 
quested, and  the  trial  court  erred  in  its  refusal.  The  view  we  have 
taken  of  the  case,  we  think,  renders  it  unnecessary  to  notice  other 
assignments  of  error.    Reversed  and  remanded.-* 


II,  Limitations 

VAN  EPPES  V.  SMITH. 
(Supreme  Court  of  Alabama,  1852.    21  Ala.  317.) 

Smith  sues  for  $23  for  putting  up  an  awning  in  front  of  defendant's 
stable.  The  work  was  ordered  by  an  employe  of  the  defendant,  who 
attended  to  letting  out  horses  and  carriages  for  hire,  and  who  nightly 
turned  over  the  collections  to  defendant's  agent,  Austin. 

LiGON,  J.f  The  motion  to  dismiss  the  writ  of  certiorari,  because 
the  reasons  set  forth  in  the  petition  for  it  were  not  sufificient  to  au- 
thorize its  issue,  was  correctly  overruled  by  the  court  below.  The 
statute  which  allows  appeals  and  writs  of  certiorari  to  judgments 
rendered  by  justices  of  the  peace,  declares,  that  when  such  cases 
reach  the  appellate  court,  they  shall  be  tried  de  novo  on  their  merits, 
upon  issues  made  up  under  the  direction  of  the  court,  thus  indirectly 
forbidding  their  dismissal  for  any  irregularities  in  the  manner  of 
bringing  them  before  that  court. 

On  tlid  trial,  it  appears  by  the  bill  of  exceptions,  the  court  charged 
the  jury,Vthat  a  person  may  have  several  agents,  with  full  powers  to 
do  the  same  act,  and  if  the  plaintiff  had  ground  sufficient  to  satisfy 
an  ordinarily  reasonable  man  of  the  agency  of  Stall,  and  that  he  bad 
[)crformed  the  work  and  delivered  it,  before  he  was  informed  to  the 
contrary,  it  would  be  sufficient  to  charge  Vnc  defendant."    This,  as  a  "> 

proposition  of  law,  cannot  be  supported.  I  The  inferences  of  a  party     /  / 

dealing  with  one  whom  he  supposes  to  b\t^he  agent  of  another,  dc- y\-'C/C/V*<^ 
duced  alfjne  from  tlie  acts  of  such  supp(jsed  agent,  are  no  proof  of'  ^'^- 

20  St.  Loiil.s  fJiiiiniiiK  Adv.  Co.  V.  Wauamaker,  115  Mo.  Aitp.  270,  W  S.  \V. 
7.^7  iV.H)-,),  ante,  p.   I.-.5. 


;  rjiit  of  tin-  opinion  Is  omitted,  a  Ji  j.     ■'^ 


jA 


I 


^lo,  ^fi^iAnMtij 


J>32  Tin:  AiriiouiTY  (Part 

agency,  and  the  jury  sliouUl  not  ho  told  to  look  to  them  asAuch.'y 
In  Scarborough  v.  Reynolds,  12  Ala.  253,  it  is  held,  "that  th/age>*<5y 
of  a  parly  must  first  be  proved  by  other  evidence  than  his  acts,  jirtf ore 
it  can  be  assumeil  that  his  acts  are  binding  on  the  principal.y  Some 
act  of  the  principal,  in  relation  to  the  thing  done,  is  indispensable 
to  make  out  the  agency,  and  the  pretensions  and  acts  of  the  party 
assuming  to  be  the  agent  have  no  foundation  itoon  which  to  rest, 
until  the  principal  is  thus  connected  with  them.     ] 

The  text  books  lay  it  down  as  a  rule  in  such  cases',  and  this  court 
has  repeatedly  reiterated  it,  that,  when  a  person^  desfls  with  one  who 
professes  to  be  the  agent  of  another,  the  pjersyn [ contracting  with 
him  is  bound  to  know  the  extent  of  his  authorityA  ^aley  on  Agency, 
309;  Fisher  v.  Campbell,  9  Port.  210;  Gullett  v.lLewis,  3  Stew.  23. 
But  the  last  part  of  the  charge  in  this  case  assujnes  the  law  to  be, 
that  if  a  party  deal  with  one  whom  he  reasonably/supposes  to  be  the 
agent  of  another,  the  contract  is  binding  on  the/matter,  unless  he  in- 
forms the  dealer  before  the  contract  is  completed  that  the  professed 
or  supposed  agency  does  not  exist.  This  is'^  manifestly  erroneous, 
and  based  upon  a  misconception  of  the  law ;  for  under  it  the  burden 
of  proof  is  thrown  on  the  defendant,  and  he  is  required  to  prove  the 
want  of  authority  of  him  who  unauthorizedly  intermeddles  in  his 
business;  when  by  the  rules  of  law,  it  is  on  the  plaintiff  to  show  the 
fact  of  agency.     *     *     * 

For  the  error  shown  above,  let  the  judgment  be  reversed  and  the 
cause  remanded. 


FIGUEIRA  V.  LERNER. 

(Supreme  Court  of  New  York,  Appellate  .Division,  Second  Department,  1900. 
52  App.  Div.  216,  65  N.  Y.  Supp.  293.) 

Woodward,  J.  This  is  a  proceeding,  brought  under  the  provi- 
sions of  subdivision  4  of  section  2232  of  the  Code  of  Civil  Procedure, 
to  oust  the  occupant  of  certain  premises  in  the  borough  of  Brooklyn, 
on  the  ground  that  said  occupant  had  intruded  into  said  premises  with- 
out permission  of  the  owner,  and  that  the  occupancy  thus  commenced 
had  continued  without  such  permission.  The  occupancy  was  admitted 
by  the  answer,  but  it  was  urged  that  it  was  with  the  permission  of  the 

3  0  Presenting  oneself  as  agent,  and  making  declaration  to  that  effect,  create 
no  valid  apparent  authorit.v.  Tompkins  Mach.  Co.  v.  Peter,  84  Tex.  627,  19 
S.  W.  860  (1892).  Agents  cannot  empower  themselves  to  act.  Crawford  v. 
Whittaker,  42  \V.  Va.  430,  26  S.  E.  516  (1896) ;  Edwards  v.  Dooley,  120  N.  Y. 
540,  24  X.  E.  827  (1890).  The  apparent  authority  is  that  which  he  appears  to 
have  from  that  which  he  actually  does  have,  and  not  from  that  which  he  may 
pretend  to  have,  or  from  his  actions  on  occasions  which  were  unknown  to  and 
unratified  by  his  principal.  Oberne  v.  Burke,  30  Neb.  581,  46  N.  W.  838  (1890), 
containing  a  valuable  discussion.  There  is  a  distinction  between  the  ap- 
parent powers  and  the  acts  apparently,  but  not  really,  within  the  power. 
Mechanics'  Bank  v.  N.  Y.  &  N.  II.  Ry.  Co.,  13  N.  Y.  599  (1856). 


Ch.  1)  NATURE    AND    EXTENT  333 

owner,  given  by  one  Marks,  acting  as  agent  for  the  owner.  The 
learned  justice,  upon  the  trial  of  the  issue  thus  raised,  determined  the 
matter  in  favor  of  the  owner  of  the  premises,  and  an  appeal  from  the 
order  entered  upon  this  decision  comes  to  this  court. 

We  are  asked  to  reverse  the  order  upon  the  ground  that  the  weight 
of  evidence  preponderates  in  favor  of  the  appellant,  that  the  final  order 
is  against  the  evidence,  and  that  it  is  contrary  to  law;  but  an  ex- 
amination of  the  record  does  not  warrant  this  relief.  The  question 
presented  was  whether  Marks  was  in  fact  the  agent  of  the  owner  of 
the  premises,  with  authority  to  rent  and  give  possession  to  the  appel- 
lant. Upon  this  point  there  was  a  direct  conflict  of  evidence,  and,  the 
learned  justice  having  decided  in  favor  of  the  owner  of  the  premises, 
it  is  not  for  this  court  to  disturb  this  conclusion.  Fowler  v.  Marcus, 
41  App.  Div.  425,  58  N.  Y.  Supp.  867.  The  evidence  clearly  warrants 
the  decision ;  for  there  is  practically  no  dispute  that  Marks  was  merely 
authorized  to  bring  a  tenant  to  the  owner  of  the  premises,  or  to  his 
general  agent,  and  to  receive  a  commission  for  such  work.  As  to 
whether  this  authority  was  extended  at  a  subsequent  interview  with 
the  owner  in  respect  to  the  renting  of  the  premises  to  the  defendant, 
the  evidence  is  conflicting,  and  the  justice  before  whom  the  question 
was  tried  has  found  in  favor  of  the  petitioner. 

While  a  principal  is  bound  by  his  agent's  acts  when  he  justifies  a 
party  dealing  with  his  agent  in  believing  that  he  has  given  to  the  agent 
authority  to  do  those  acts,  he  is  responsible  only  for  that  appearance 
of  authority  which  is  caused  by  himself,  and  not  for  that  appearance  of 
conformity  to  the  authority  which  is  caused  only  by  the  agent ;  that  is, 
he  is  bound  equally  by  the  authority  he  actually  gives,  and  by  that  which 
by  his  acts  he  appears  to  give.  For  the  appearance  of  authority  he  is 
responsible  only  so  far  as  he  has  caused  that  appearance.  For  the 
appearance  of  the  act  the  agent  alone  is  responsible.  The  fundamental 
proposition  is  that  one  man  can  be  bound  only  by  the  authorized  acts 
of  another. ^^  He  cannot  be  charged  because  another  holds  a  commis- 
sion from  him,  and  falsely  asserts  that  his  acts  are  within  it.  Edwards 
v.  Dooley,  120  N.  Y.  540,  24  N.  E.  827.  The  limited  scope  of  Marks' 
agency  was  indicated  to  the  defendant  when  he  announced  that  he 
must  see  the  owner  of  the  premises  before  renting  the  same,  and  if 
the  owner  did  not  extend  the  authority,  and  did  not  do  any  acts  from 
which  the  defendant  would  be  justified  in  believing  that  the  ])owers  of 
Marks  had  been  extended,  the  defendant  did  not  come  into  the  pos- 
session of  the  premises  with  the  consent  of  the  owner,  and  the  order 
appealed  from  shouUl  be  affirmed. 

The  decision  of  the  justice  below,  upon  the  conflict  of  evidence  in 
respect  to  this  point,  must,  as  we  have  already  indicated,  be  conclusive. 
The  order  appealed  from  should  be  affirmed,  with  costs.    All  concur. 

31  Acrord:  Lcnry  v.  Allmnv  I'-rrwliiK  Co.,  77  Api".  Dlv.  6,  79  N.  Y.  .Supp. 
1P.0  (IKOL'i;  Wri^li"t  v.  Glyii.  \\W2\  1  K.  IJ.  745,  71  L.  J.  K.  B.  407.  S(l  L.  T. 
.'!7.':.  .".O  W.  K.   \()'2. 


."ull  TUK  AL'nK>Kii'i'  (Part  2 


SKCTIOX  4.— KX TRUSS  AXD  TATPTJl'D  AUTHORITY 


FARMl-RS'  .'v  :\n<:CTTAXTCS'  l^.AXK  v.  BUTCHERS'  & 
DRO\KRS'  BAXK. 

(Court  of  ApiK'.ils  of  Ni'w   York.  Isr.T.     IC.  N.  Y.  125,  09  Am.   Doc.  GTS.) 

Action  l)y  a  holder  for  value  of  three  checks  for  $1,000  each,  and 
two  for  $1,500  each,  for  the  face  of  the  checks.  They  had  all  hecn 
certified  as  good  by  defendant's  paying  teller,  who  had  full  authority 
to  certify  checks  when  the  drawer  had  sufficient  funds  in  the  bank, 
but  who  was  instructed  not  to  certify  when  there  were  not  sufficient 
funds  on  deposit.  Green,  the  drawer  of  these  checks,  induced  the 
teller  to  certify  when  there  were  no  funds  by  telling  him  he  wanted 
them  for  temporary  use,  and  they  should  not  become  a  charge  upon 
the  bank. 

CoMSTocK,  J.  (dissenting). ^^  *  *  *  fj-jg  question  I  now  pro- 
pose to  examine  is  w^hether  the  teller  had  power  to  enter  into  these 
contracts  as  the  agent  of  the  defendants.  In  the  first  and  most  obvious 
view  of  an  agency  of  any  description,  the  principal  is  bound  by  such 
acts  as  he  has  authorized,  and  no  others. ^^     In  a  just  sense,  this  is 

3  2  Part  of  the  dissenting  opinion  is  omitted.  The  ma.iority  opinion  [here 
omitted]  held  the  banii  not  liable  on  the  ground  that  there  was  a  distinction 
between  the  terms  of  a  power  and  facts  entirel.v  extraneous,  upon  which  the 
right  to  exercise  the  authority  conferred  may  depend.  One  dealing  witli  the 
agent  is  bound  to  know  the  extent  of  the  power,  but  not  these  extrinsic  facts, 
such  as  whether  the  drawer  had  funds. 

3  3  The  authority  of  an  agent  may  be  shown,  either  directly  by  express 
words  of  appointment,  either  spoken  or  written,  or  it  may  be  implied  or  in- 
directly shown,  by  evidence  of  the  relative  situation  of  the  parties,  the  na- 
ture of  the  business  and  the  character  of  the  intercourse  between  the  parties 
justifying  such  an  inference.  Acts  and  doings  are  often  qtiite  as  significant 
as  words  siwken.  Oeylin  v.  De  Villcroi,  2  Iloust.  r.ll  (ISflO),  ante,  p.  50, 
in  which  the  court  instructed  the  jury :  "Bivt.  although  it  is  perfectly  true  as 
a  general  rule,  as  stated  by  the  counsel  for  the  defendant,  that  the  agent 
must  not  exceed  the  general  scope  of  his  authority,  yet  it  is  equally  true  that 
the  extent  or  scope  of  the  authority  conferred  on  the  agent  depends  upon 
the  nature  and  character  of  the  business  to  be  done  or  transacted,  and  it  is 
(unless  a  contrary  intention  manifestly  appears)  always  construed  to  include 
all  the  necessary  means  of  executing  it  with  effect.  And  not  only  are  the 
means  necessary  and  proper  for  the  accomplishment  of  the  end  pro])o.sed  in- 
cluded in  the  authnrity,  liut  also  all  llie  various  means  and  methods  which 
are  justified,  or  allowed,  in  that  particular  trade  or  business.  The  scope  of 
the  authority  must  be  measured  by  the  nature,  requirements  and  necessities 
of  the  thing  to  \.e  done  and  accomplished.  The  agency  may  be  either  gen- 
eral, or  special  and  limited.  A  general  agent  is,  first,  a  person  authorized 
by  his  principal  to  transact  all  his  business  of  a  particular  kind,  or  he  is  a 
person  who,  being  engaged  in  a  certain  trade  or  business,  is  employed  by 
his  principal  to  do  certain  acts  or  things  for  him  in  the  course  of  that  trade 
or  business.  In  both  of  these  cases  the  agent  will,  if  there  be  no  limitation 
of  his  authority  known  to  these  parties,  lie  taken  as  to  them  to  be  a  general 
agent,  and  will  therefore  have  the  power  to  bind  his   principal  by  all  con- 


Ch.  1)  NATURE    AND    EXTENT  335 

universally  and  necessarily  true,  because  the  proposition  is  involved  in 
the  ver)'  idea  of  agency.  If  there  are  apparent  exceptions  in  the  books, 
they  are  not  such  in  fact,  but  are  merely  varieties  in  the  application  of 
the  rule,  which  do  not  contradict  the  rule  itself.  This  will  appear 
when  we  consider  the  modes  in  which  powers  are  derived  from  a  prin- 
cipal to  an  agent  so  as  to  bind  the  former  in  favor  of  third  parties. 

An  agency  may  be  constituted  by  writing.  When  this  is  the  case, 
the  agent  takes  precisely  such  authority  as  the  instrument  confers, 
upon  a  fair  construction  of  the  language  used,  taken  in  connection  with 
the  general  or  particular  purpose  of  the  power.  An  authority  thus  de- 
rived of  course  includes,  in  the  absence  of  special  restrictions,  all  such 
incidental  powers  and  means  as  are  necessary  in  the  execution  of  the 
main  purpose.  The  agency  may  also  be  created  by  a  special  verbal 
appointment.  I  use  the  word  special,  not  with  reference  to  the  powders 
to  be  exercised,  but  to  the  mode  of  creating  them  by  special  or  express 
words.  When  the  language  of  such  an  appointment  is  once  ascer- 
tained, it  Js  perfectly  obvious  that  the  authority  of  the  agent  is  pre- 
cisely what  it  would  be  if  it  were  conferred  by  a  writing  in  the  same 
language. 

But  there  is  another,  and,  for  all  purposes  connected  with  the  pres- 
ent inquiry,  only  one  other,  mode  of  delegating  power.  Without  any 
express  or  special  appointment,  an  implied  agency  may  arise  from  the 
conduct  of  a  party.  Story  on  Agency,  §  54.  Where  a  person  has 
recognized  a  course  of  dealing  for  him  by  another,  or  a  series  of  acts 
of  a  particular  kind,  an  implied  agency  is  thereby  constituted  to  carry 
on  the  same  dealing  or  to  do  acts  of  the  same  character.  Now,  the 
only  difference  between  such  an  agency  and  those  which  are  created 
by  express  appointment,  whether  verbal  or  in  writing,  is  that  the  latter 
may,  by  the  very  terms  of  the  power,  be  confined  to  a  single  transac- 
tion or  act,  while  the  very  existence  of  the  former  is  derived  from  a 
course  of  recognized  dealing  or  a  scries  of  recognized  acts.  This  im- 
plied agency  is  therefore  never  a  special  one,  in  the  sense  in  which 
that  term  has  generally  been  used.  All  express  agencies  may  or  may 
not  be  special,  according  as  they  authorize,  or  do  not,  more  than  a 
single  act. 

Although  much  has  been  said  concerning  general  and  special  agen- 
cies, there  never  was  any  other  intelligible  distinction  indicated  by  those 
terms.  Where  this  distinction  docs  not  exist,  in  other  words,  where 
the  power  is  not  special  in  this  sense,  agencies  by  express  appointment 

tracts  ciitcrc*!  Into  with  such  third  piirtlcs.  which  arc  within  tlic  sciipc  of 
ills  onliiiary  (•iiiployinciit.  Tlio  duty,  tlicrffnrc,  (if  (IctiTiiiiniii^'  tlic  cxtciit  to 
wliicli  tlic  priiiciiui!  liiis  nccn'ditfd  Ids  ntrciit.  is  dcvnlvcd  on  tlu*  jury;  Jiiid 
if  tlii-y  jirc  s;itis(i<'d  tiiiit  the  jiriiH-ipiil  liy  Ids  cniiduct.  words,  or  nets  wiir- 
liiiittMJ  tlic  ;i;,'ciit  to  hold  himself  out  to  the  world  iis  possessing  cerl.'iiii  .'Ui- 
tl'ority  in  thiit  rcs|ie(t,  lie,  the  iirineipiil.  will  he  hound  hy  the  exercise  of  that 
Miitliority,  whether  the  aKcnt  really  po.ssesscd  it  or  not."  'Jlie  pliiiiitilT  liad  .-i 
verdict. 


:VA6  THK  ArTuouiTY  (Part  2 

ami  tliose  implied  from  conduct  arc  entirely  similar  in  all  their  char- 
acteristics and  incidents.  In  the  one  class,  the  authority  is  manifested 
hy  an  express  delegation ;  in  the  other,  it  is  presumed  or  implied  from 
the  conduct  of  the  principal.  This  presumption  is  allowed  even  against 
the  real  facts  of  the  case,  where  the  rights  of  hona  tide  dealers  are  con- 
cerned. In  all  this  class,  it  is  presumed  that  the  principal  has  actually 
delegated  power  to  do  the  acts  which  he  has  been  in  the  habit  of 
recognizing  and  approving.  The  power  thus  presumed  is  to  be  judged 
in  all  respects  as  though  the  delegation  were  actually  shown.  It  will 
justify  and  uphold  acts  of  the  same  kind,  or,  in  other  words,  within 
the  presumed  authority,  but  no  others. 

I  have  observed  that  there  may  be  seeming  contradictions  of  the 
fundamental  doctrine,  that  a  principal  is  bound  only  by  such  acts  of 
his  agent  as  he  has  duly  authorized.  This  presumptive  or  implied 
agency  is  one  of  these,  because  a  man  may  have  accepted  and  approved 
acts  which  he  never  authorized,  and  so  be  bound,  as  to  third  persons, 
by  similar  acts.  Another  and  the  only  other  of  these  apparent  con- 
tradictions is  where  the  acts  done  by  the  agent  are  justified,  as  to  in- 
nocent dealers,  by  the  authority,  whether  conferred  by  express  dele- 
gation or  presumed  in  the  manner  indicated,  but  are  opposed  to  special 
private  restrictions.  In  such  cases  the  liability  of  the  principal  rests 
upon  a  just  distinction  between  the  power  conferred  and  private  in- 
structions as  to  its  exercise.  But  the  power  must  in  all  cases  be  vested 
either  actually  or  presumptively,  and  if  it  be  not,  the  principal  cannot 
be  charged. 

The  principles,  so  far  stated,  are  simple  and  elementary,  although 
they  have  been  somewhat  obscured  by  loose  and  indeterminate  ex- 
pressions in  the  books.  Applying  them  to  the  present  inquiry,  it  be- 
comes plainly  of  no  importance  whether  the  power  of  Mr.  Peck,  the 
defendants'  teller,  to  certify  checks,  was  derived  from  a  special  ap- 
pointment or  from  a  recognition  of  his  acts.  At  the  circuit  it  appears 
to  have  been  placed  on  the  ground  of  recognition,  and  no  special  ap- 
pointment was  shown.  The  difference  is  merely  in  the  mode  of  con- 
stituting the  agency.  The  power  in  either  case  is  the  same.  Viewing 
it  as  derived  or  implied  from  acts  recognized  and  approved,  the  in- 
quiry at  the  circuit  should  have  been,  what  were  those  acts?  If  they 
were  confined  to  the  certification  of  checks  drawn  upon  actual  deposits, 
then  the  power  to  be  implied  or  presumed  was  to  do  acts  of  the  same 
character,  but  not  of  a  character  wholly  different,  although  clothed  in 
the  same  form. 

In  a  word,  the  certifying  authority  of  the  teller  is  to  be  construed 
and  treated  in  all  respects  as  though  it  had  been  given  to  him  by 
a  written  instrument  specially  defining  and  restricting  it;  and  view- 
ing the  authority  in  this  manner,  we  are  to  inquire  whether,  under 
a  power  expressly  confined  to  the  certification  of  checks  drawn 
upon  suf^cient  funds  on  deposit  with  the  defendants,  the  teller  could 


Ch.  1)  NATURE   AND    EXTENT  337 

bind  them  by  certificates  which  were  fictitious  and  false.  These  cer- 
tificates, as  we  have  seen,  are  to  be  regarded  as  acceptances;  and 
another  mode  of  stating  the  inquiry  therefore  is,  could  the  teller,  with 
authority  only  to  accept  checks  drawn  upon  actual  funds,  bind  his 
principals,  by  accepting  for  the  accommodation  of  the  drawer,  when 
there  were  no  funds  on  deposit  and  none  in  expectancy  ? 

This  question,  it  is  proper  now  to  observe,  cannot  be  determined  in 
the  plaintiffs'  favor  on  the  ground  that  the  limitations  upon  the  agent's 
power  were  in  the  nature  of  private  instructions  merely,  in  regard  to 
its  exercise.  The  dit^culty  which  meets  us  in  this  view  of  the  case  is 
that  the  power  exercised  is  not  embraced  at  all  in  the  commission.  An 
authority  to  accept  drafts,  in  the  regular  business  of  the  principal, 
upon  funds  of  the  drawer,  is  a  precise  and  well  defined  authority.  It 
cannot,  in  my  opinion,  include  acceptances  out  of  the  principal's  busi- 
ness, and  for  the  accommodation  of  third  persons.  So,  an  authority  to 
accept  or  certify  checks,  in  the  regular  course  of  banking  business, 
would  seem  to  be  equally  definite.  It  does  not  embrace  a  power  to 
pledge  the  responsibility  of  the  bank  for  the  accommodation  of  per- 
sons who  are  not  depositors  and  have  no  funds. 

It  is  urged  that  the  teller  is  a  proper  agent  or  officer  to  answer  ques- 
tions and  give  information  as  to  the  funds  of  a  person  who  draws  his 
check.  But  this  is  a  very  different  thing  from  entering  into  a  written 
engagement  which  operates  to  transfer  the  fund,  if  there  be  any,  from 
the  depositor,  and  which,  whether  there  be  any  funds  or  not,  imposes 
a  pecuniary  obligation  on  the  bank,  to  last  until  barred  by  the  general 
statute  of  limitations.  It  ought  not  to  be  contended  seriously  that  such 
a  power  can  be  derived  from  the  simple  practice  in  a  bank  of  turning 
to  its  books  and  communicating  to  inquirers,  through  the  teller  or 
book-keeper,  the  condition  of  its  customers'  accounts.     * 


CLAFUN  V.  CONTINENTAL  JERSEY  WORKS.  ^V„ 

(Supreme  Court  of  Georgia,  1890.    85  Ga.  27,  11  S.  E.  721.) 

One  Weisbein,  a  merchant  in  Savannah,  by  fraudulent  representa- 
tions as  to  his  solvency,  secured  large  amounts  of  goods  from  Clafiin 
&  Co.  and  Jaffray  &  Co.  By  a  heavy  sale  he  secured  $60,000  in  cash, 
with  which  he  absconded.  He  left  his  manager,  Lichtenstcin,  in  charge 
under  a  written  power  of  attorney  to  manage  the  business,  and  make 
collections,  pay  bills,  and  do  any  acts  necessary  and  proper  for  carry- 
ing on  the  business,  as  fully  as  the  principal  might  do  if  personally 
present.  Clafiin  &  Co.  and  Jaffray  &  Co.  demanding  pay.  and  Lichten- 
stcin having  no  money,  he  offered  to  pay  in  goods,  and  turned  over  to 
them  goocis  of  sufficient  amount  to  settle  their  accounts,  a  large  part 
Goi)r).rR.&  A. — 22 


•■»<-»  o 


Tin:    AVniOKITY 


(Part 


of  such  goods  being  the  same  originally  purchased  from  said  firms  and 
still  unpaid  for.  The  Continental  W^orks  and  other  creditors  attacked 
this  conveyance  as  a  fraud  upon  the  rest  of  the  creditors,  and  outside 
the  scope  of  Lichtcnstcin's  authority.  Appeal  from  a  verdict  and  de- 
cree against  defendants. 

Simmons,  ].•'■'  The  errors  assigned  in  the  tiftli  to  eighteenth  (in- 
clusive) grounds  of  the  motion  for  a  new  trial  go  to  the  refusal  of  the 
court  to  give  in  charge  to  the  jury  certain  principles  of  the  law  of 
agency  which  bear  upon  the  question  of  the  extent  of  Lichtcnstcin's 
authority.  The  requests niiay  embody  sound  law,  but  it  is  immaterial 
whether  they  do  or  not.  Where  an  agent's  authority  is  conferred  and 
defined  in  writing,  the  scope  or-^xtcnt  of  such  authority  is  a  question 
for  determination  by  the  court.X  INFechcm,  Ag.  §  104;  1  Thomp. 
Trials.  §  1370;  Berwick  v.  Horsf^l,  29  Law  J.  C.  P.  193;  Dobbins  v. 
Manufacturing  Co.,  75  Ga.  23j^43 ;  Pollock  v.  Cohen,  32  Ohio  St. 
514.  As  said  by  this  court  in  the  case  above  cited  (page  243) :  "That 
it  was  the  duty  of  the  court  to  construe  both  the  charter  and  the  letter 
of  attorney,  and  to  determine  the  extent  of  power  conferred  by  both 
and  each  of  them  upon  the  agent,  we  think,  is  a  plain  proposition. 
Taken  alone,  and  without  proof  of  other  circumstances  to  which  it 
was  necessary  to  resort  to  clear  ambiguities  or  to  explain  doubtful  in- 
tention, there  was  nothing  for  the  jury  to  find.  The  question  was 
purely  and  simply  one  of  law,  to  which  it  was  the  exclusive  right  and 
duty  of  the  judge  to  respond." 

In  requesting  charges  upon  the  extent  and  nature  of  a  general 
agency,  there  seems  to  have  been  an  attempt  by  the  plaintiffs  in  error 
to  enlarge  the  authority  of  Lichtenstcin  beyond  the  lirtiits  of  his  power, 
or  at  least  to  establish  the  construction  that  the  instrument  created  a 
general  Agency.  If  there  was  any  such  effort,  the  court  did  not  err 
in  defeating  it.  It  is  not  allowable,  by  the  addudtion  of  extrinsic  oral 
evidence ,  to  add  to  the  powers  expressly  given  in  the  writing.  \  The 
authorij  -  must  be  proved  by  the  instrument  itselfi  Neal  v.  Patte^,  40 
Ga.  363l\  The  very  purpose  of  a  power  of  attorney  is  to  prescribe  and 
publish  yii  limits  within  which  the  agent  shall  act,  so  as  not  to  leave 
him  to  t^he  uncertainty  of  memory,  and  those  who  deal  with  him  to 
the  risT<^or  misrepresentation  or  misconception,  as  to  the  extent  of  his 
authorityVi  To  confer  express  authority  is  to  withhold  implied  au- 
thority. |l\liere  can  be  no  parol  enlargement  of  a  written  authority. 
Whart.  A^.%  225;  Mechem,  Ag.  §  306;  Reese  v.  Medlock,  27  Tex. 
120,  84  Am.  Dec.  611;  Patty  v.  Car.swell,  1  Amer.  Lead.  Cas.  687, 
notes;   Pollock  v.  Cohen,  32  Ohio  St.  514. 

Besides,  the  power  of  attorney  was  relied  upon  throughout  the  whol 
transaction.     The  plaintiffs  in  error  believed  Lichtcnstcin's  acts  to  be 
within  the  letter  of  his  authority,  having  taken  the  advice  of  counsel  in 
reference  thereto,  so  that  they  cannot  claim  to  have  been  misled  by 


34  Part  of  the  opinion  is  omitted. 


Ch.  1)  NATURE    AND    EXTENT  339 

any    appearance    of    authority    other    than    that    which    the    writing 
gives. ^^     *     *     * 

The  court  found  the  act  of  Lichtenstein  to  be  outside  his  authority, 
but  the  case  was  reversed  on  other  grounds. 


DUNWOODY  V.  SAUNDERS. 

(Supreme  Court  of  Florida,   190;").     50  Fla.  202,  39  South.  9G5.) 

CocKRELL,  J.3«  The  plaintiffs  in  error,  as  plaintiffs  below,  sued 
for  the  loss  and  hire  of  a  barge  or  lighter.  The  declaration  consisted 
of  three  counts — the  first  an  ordinary  count  in  bailment  for  the  loss 
through  the  alleged  negligence  of  a  bailee  for  hire ;  the  second  count 
alleged  a  special  contract  whereby  the  bailee  became  an  insurer  of 
the  barge ;  and  the  third  count  was  for  the  rental  value  of  the  lighter 
between  the  hiring  and  the  loss.  There  was  verdict  and  judgment  on 
the  last  count  alone,  and  to  the  judgment  the  plaintiffs  sued  out  this 
writ  of  error. 

No  question  is  raised  here  on  the  pleadings,  all  assignments  of  er- 
ror therein  being  expressly  abandoned,  and  the  only  assignments,  in 
view  of  the  disposition  of  the  case,  that  we  shall  consider,  are  those 
based  upon  certain  instructions  given,  modified,  or  refused. 

The  barge  was  hired  for  the  purpose  of  being  towed  from  Pensacola 
to  St.  Andrews  Bay  and  there  receive  on  board  a  cargo  of  lumber, 
when  it  was  to  be  towed  back  with  such  cargo  to  Pensacola  bv  the 
defendant's  tugboat,  and  there  was  evidence  that  the  owners  of  the 
barge  placed  thereon  a  master,  with  direction  to  see  to  it  that  the 
barge  was  loaded  in  a  certain  way,  and  that  this  manner  of  loading 
caused  its  loss.    *    *    * 

The  court  erred  in  giving  this  charge:  "If  you  find  that  ITvcr  had 
authrjrity  from  the  defendant  to  hire  the  barge  iirainard  for  the  tri|) 
from  Pensacola  to  St.  Andrews  and  return,  yet  the  existence  of  such 
power  would  not  authorize  him  to  bind  the  defendant  bv  a  contract 
that  the  barge,  during  the  possession  of  her  under  such  hiring,  should 
be  at  the  risk  of  the  defendant."  The  defendant  in  error  asserts  that 
this  instruction  "was  intended  to  present  boldly  to  the  jurv  the  asser- 
tion that  tlierc  was  no  evidence  to  show  that  Hyer  had  the  power,  or 
that  the  plaintiffs  had  the  right  to  rely  on  his  having  the  power,  to 
bind  the  defendant  by  a  contract  that  the  barge  during  bailment  should 

■iC' Sec.  tilso.  Siivji^'f  V.  rdtim.  1  Colo.  Ai»|i.  MS.  L>7  pnc.  94.S  (IMU).  One 
who  (Ifjils  with  ail  aK<'iit  Mffiii;;  iiii(1«m-  a  wriHiMi  authority  is  to  Iti'  ropirdcd 
as  dfaliiiK  with  tiic  (lowfr  licforc  hliii.  and  must  at  his  peril  know  thai  the 
act  of  tiic  au'i'iit  is  ono  that  is  autlmii/cd  hy  the  ixiwcr.  Staiuluu-k  v.  Itcad. 
11  (Jrat.  2S1.  (;2  Am.  ]>(><•.  (J4.S  dsril);  Saiidford  v.  Handy,  2.'!  Wend.  2t;(J 
(1H40)  ;  Cuniniiiis  v.  ISoauniotit,  (>s  .\la.  2ni  (iss(»,  nntc,  p.  U'.ti  :  (jnav  v.  Pre- 
sidio &  Kcrries  Co..  S2  Cal.   1.  22  Par.  92.')  (1889). 

•'■■  I'iirt  of  the  ..pinion  is  oitiKted. 


340  THE  AUTiTOuiTT  (Part  2 

be  at  defendant's  risk."  Wo  shall  accept  this  interpretation  of  the 
charge. 

There  was  evidence  from  which  we  can  legitimately  infer  that  Tlycr, 
who  alone  participated  in  Ihc  transaction  on  behalf  of  the  bailee,  was 
at  the  time  acting  as  his  general  agent  in  the  barge  and  towboat  bnsi- 
ness,  though  Saunders  had  other  lines  of  business  not  represented  by 
Hycr,  and,  further,  that  subsequent  to  the  loss  of  the  barge  when 
Hyer  was  charged  with  having  made  the  contract,  Saunders,  though 
present,  did  not  deny  his  authority.  There  was  no  proof  of  custom  or 
usage  or  previous  dealings,  or  that  the  bailors  had  knowledge  of  any 
limitations  upon  the  agent's  apparent  authority.  While  a  general 
agent's  authority  is  confined  to  such  transactions  and  concerns  as  are 
incident  and  appurtenant  to  the  business  of  his  principal,  and  to  that 
branch  of  his  business  that  is  intrusted  to  his  care,  yet  within  these 
limits  the  principal  is  bound.    IMcchem  on  Agency,  §§  286,  287. 

The  same  authority  says :  "Where  the  agent  is  authorized  to  trans- 
act all  the  principal's  business  of  a  certain  kind,  the  very  breadth  of 
the  employment  and  variety  of  the  duties  to  be  performed  necessarily 
involve  more  or  less  of  discretion  and  choice  of  methods,  and  render 
impracticable,  if  not  impossible,  much  of  particularity  or  precision, 
either  as  to  the  exact  means  and  method  to  be  employed,  or  as  to  the 
scope  or  extent  of  the  authority  itself.  Where  so  little  is  expressed, 
more  may  well  be  implied.  The  fact  of  such  an  authority,  of  itself, 
presupposes  a  general  confidence  bestowed  upon  the  agent,  and  a 
general  committal  to  his  discretion  and  judgment  of  all  beyond  the 
essential  objects  to  be  attained  and  the  outlines  of  the  course  to  be 
pursued.  It  may  not  unreasonably  be  presumed,  where  nothing  is 
indicated  to  the  contrary,  that  such  an  agent  possesses  those  powers 
which  are  commensurate  with  his  undertaking,  and  which  are  usually 
and  properly  exercised  by  other  similar  agents  under  like  circum- 
stances. This  presumption  may  well  be  and  is  constantly  relied  upon 
by  persons  dealing  with  such  agents,  and  so  reasonable,  proper,  and 
necessary  is  this  reliance,  that  it  may  justly  be  required  that,  if  the 
principal  would  impose  unusual  restrictions  upon  the  authority  of  such 
an  agent,  he  should  make  them  known  to  persons  who  may  have  oc- 
casion to  deal  with  the  agent."*'^ 

37  Some  independent  judgment  on  the  part  of  the  agent  is  usually  neces- 
sary, liilliard  v.  Weeks,  IT.i  Mass.  304,  53  N.  E.  818  (18'J9).  This  is  especially 
true  where  the  agent's  duties  are  not  merely  ministerial,  capable  of  being  de- 
fined and  executed  strictly,  but  involve  large  powers  and  wide  discrotk)n. 
Howard  v.  Baillie,  2  H.  Bl.  618  (179G).  If  the  principal,  by  his  declarations 
or  conduct,  has  justified  the  opinion  that  he  had  in  fact  given  to  the  agent 
more  extensive  powers  than  those  in  the  writing,  then  to  that  extent  he  will 
be  bound  by  acts  outside  the  express  authority.  Rawson  v.  Curtiss,  19  111. 
4o(i  (1858);  Merchants'  Ins.  Co.  v.  New  Mexico  Lumber  Co.,  10  Colo.  App. 
22.3,  51  Pac.  174  (1897).  A  written  power  may  be  expanded  by  the  declara- 
tions or  acts  of  the  principal.  Philadelphia  Trust,  Safe  Deposit  &  Ins.  Co. 
V.  Seventh  Nat.  Bank  (D.  C.)  6  Fed.  114  (1881).  Cf.  Mechanics'  Bank  v. 
Schaumburg,  38  Mo.  228  (1866).  When  the  appointment  has  been  expressly 
made  in  writing,  it  frequently  happens  that  much  of  the  agent's  resulting 


Ch.  1) 


NATURE    AND    EXTENT 


341 


For  the  purpose  of  conducting  this  business  over  which  he  had  gen- 
eral charge,  should  the  circumstances  arise,  rendering  such  a  course 
necessary,  we  see  no  limitation  upon  his  power  from  the  facts  disclosed 
here,  to  buy  a  barge  outright  and  bind  his  principal  thereby.  Much 
less  are  there  limitations  upon  his  power  to  buy  the  barge  for  the 
limited  time  required  for  the  performance  of  this  contract,  since,  as 
it  may  be  gathered  from  the  evidence,  these  were  the  only  terms  upon 
which  he  could  secure  it. 

The  question  of  the  scope  of  the  authority  of  an  agent  is  generally 
one  of  fact,  or  of  mixed  law  and  fact,  and  therefore,  under  our  system, 
that  prohibits  charges  upon  the  facts,  such  question  is  best  left  to  the 
determination  of  a  jury  under  general  instructions  for  its  guidance. 
Other  and  different  facts  may  be  evidenced  on  another  trial,  and  we 
refrain  therefore  from  any  further  expression  of  our  views. 

It  is  unnecessary  to  discuss  the  form  or  effect  of  the  verdict. 

For  the  error  pointed  out,  the  judgment  is  reversed  at  the  cost  o 
the  defendant  in  error  and  a  new  trial  awarded. 


REESE  V.  MEDLOCK. 

(Supreme  Court  of  Texas,  18G3.     27  Tex.  120,  84  Am.  Dec.  611.) 

Action  for  the  recovery  of  land  and  the  cancellation  of  a  deed  ex- 
ecuted by  one  Powers  as  agent  for  Reese,  deceased.  Verdict  for  de- 
fendant. 

JMooRE,  J.^®  It  is  a  well  settled  general  principle  that,  when  an 
agency  is  created  and  conferred  by  a  written  instrument,  the  nature 
^ncT extent  of  the  authority  given  by  it  must  be  ascertained  from  the 
Instrument  itself,  and  cannot  be  enlarged  by  parol  evidence  of  the 
usage  of  other  agents  in  like  cases,  for  that  would  be  to  contradict  or 
vary  the  terms  of  the  written  instrument. '  There  may,  however,  be 
some  qualifications  and  limitations  properly  belonging  to  this  general 
rule,  whereby,  especially  in  cases  of  general  or  implied  agencies,  the 
usages  of  a  particular  trade  or  business,  or  of  a  particular  class  6i 
persons,  are  properly  admissible,  not,  indeed,  for  the  purpose  of  en- 
larging the  powers  of  the  agents  employed  therein,  but  for  the  means 
of  interpreting  and  rightly  understanding  those  powers  which  are 
actually  given.  /The  power  of  attorney  under  which  the  agent  sold 
the  land  in  controversy  to  the  defendant,  MedlocW,  did  not  authorize 
him  to  barter  or  exchange  it  for  other  property.  /It  cannot  surely  be 
seriously  insisted  that  there  has  become  such  a  ^general  and  uniform 
custom  or  usage  of  trade,  by  agents  for  the  sale  of  land  in  this  state. 

authority  l.s  Imiilled,  Itecanse,  even  where  lutin;:  under  a  luhiutcly  dftiiilcd 
power  of  uttonicy,  soiiio  Item  is  almost  ln<'vlt;iMy  omitted  In  (lrawni«  the 
instrument.  Adams  Express  Co.  v.  Byers  (Ind.)  95  N.  E.  513  (1011),  quotlnj; 
31  Cyc.  l."..-,n. 

88  Part  of  the  opinion  Is  omitted. 


t^ 


^ 


t^ 


'M'2  TiiK  AriiiciKiTY  (Part  2 

in  contravontion  to  tlio  1cj;al  inipdrt  of  the  instrument  imdor  which 
thov  ilcrivo  their  authority,  as  to  overturn  and  ahroqate  the  well  estab- 
lished rules  of  lei;al  construction,  by  which  the  courts  wouUl  other- 
wise be  govcrnetl.  If,  however,  such  was  the  fact,  the  testimony  of- 
fered by  the  defendant  falls  far  short  of  justifying::  the  application  in 
this  case  of  such  an  exception  to  the  general  rule  to  which  reference 
has  been  made,  and  the  com-t  did  not  err  in  excluding  it  from  the 


jury     *    *    * 


For  error  in  instructions  as  to  ratification,  reversed  and  remanded.^" 


SECTION  5.— GENERAL  AND  SPECIAL  AUTHORITY 


PACIFIC  BISCUIT  CO.  v.  DUGGER. 

(Supreme  Court  of  Oregou,   1901.     40  Or.   ;!02,  07  I'ae.   32.) 

Verdict  and  judgment  for  the  defendant.     Plaintiff  appeals. 

Bean,  C.  J.  This  is  an  action  to  recover  the  value  of  goods,  wares, 
and  merchandise  alleged  to  have  been  sold  and  delivered  to  the  de- 
fendant.   In  March,  1899,  the  defendant  purchased  of  her  son  a  cigar 

"-■* 9  Quoted  and  applied  in  Henry  v.  Lane.  128  Fed.  243,  02  C.  C.  A.  025. 
As  to  the  extent  of  express  and  implied  authority,  see  Gregory  v.  Loose, 
19  Wash.  599.  54  Pac.  33  (1898).  ante,  p.  51.  In  discussing  the  power  of  tlie 
trustee  of  a  church  to  hind  the  church  hy  agreements  with  the  contractor, 
outside  the  huilding  contract,  the  court  said  in  Moyle  v.  Congregational  So- 
ciety. 10  Utah.  69.  50  Pac.  800  (1897):  "But  if  ^Ir.  llollister,  in  a  public  man- 
ner, and  lor  such  a  length  of  time  that  it  would  he  presumed  that  the  de- 
fendant kiu'w  of  such  acts,  exercised  autliority  of  a  snjterintendent.  and  did 
all  he  is  shown  to  liave  done,  the  law  would  imply  that  he  had  authority  to 
do  those  things  of  a  similar  character.  Implied  authority  to  do  certain  things 
confers  on  the  agent  no  greater  power  than  express  authority  to  do  the  same 
thiui:.  Mr.  Mechem.  in  his  excellent  work  on  Agency  (section  274),  says: 
'Although,  as  has  heen  seen,  authority  may  he  implied  from  the  words  and 
conduct  of  the  parties,  or  from  the  circumstances  of  the  case,  yet  the  extent 
of  ti)e  authority  so  implied  cannot  exceed  the  necessary  and  legitimate  effect 
of  the  facts  from  which  it  is  inferred,  hut  nmst  he  linutcd  to  the  perform- 
ance of  like  acts  mider  like  circumstances.'  And  in  section  312  the  same 
author  says:  'If  the  agency  arises  hy  implication  from  acts  done  by  the  agent 
with  the  tiicit  consent  or  acrpiiescence  of  the  principal,  it  is  to  be  limited  in 
its  scope  to  acts  of  a  like  nature.  If  it  arises  from  the  general  habits  of 
dealing  lietween  the  parties,  it  nuist  he  confined  in  its  operations  to  dealings 
of  the  same  kind.  If  it  arises  from  the  previous  employment  of  the  agent  In 
a  particular  business,  it  is,  in  like  manner,  to  be  linuted  to  that  jiarticular 
business.  In  other  words,  an  imjilied  agency  is  not  to  be  extended  by  con- 
struction Ijeyond  the  obvious  purjiose  for  which  it  is  apparently  created.'  In 
order  for  an  agent  to  bind  tlie  principal,  it  nmst  appear  that  the  acts  done 
by  the  agent  were  in  the  exercise  of  the  ])ower  delegated  to  him,  and  within 
tlie  limits  and  scope  of  the  power.  Blum  v.  Robertson,  24  Cal.  128-141; 
Hirshfield  v.  Waldron.  54  Mich.  049,  20  N.  W.  028." 

The  facts  and  part  of  the  opinion  in  this  case  are  given  on  p.  104. 

As  to  the  limits  of  implied  power,  see,  also.  Gates  Iron  Works  v.  Denver 
Kngineering  Works,  ante,  p.  313. 


r\  -7 


Ch.  1)     -  /      NATURE    AND    EXTENT  343 


and  confectionery  business  in  Independence,  some  miles  distant  from 
her  home  in  Linn  county.  It  was  agreed  that  he  should  remain  in 
general  charge  of  the  store  as  her  agent,  with  authority  to  sell  an 


dispose  of  the  goods  and  replenish  the  stock  as  it  might  be  necessary,  // 
but  he  was  instructed  not  to  buy  on  credit.  In  October,  November, 
and  December,  1899,  he  purchased  on  credit  of  the  traveling  salesman 
of  the  plaintiff  and  its  assignors,  who  had  no  knowledge  of  his  instruc- 
tions, the  merchandise  mentioned  in  the  complaint,  which  was  received  ' 
in  the  store,  and  either  sold  and  disposed  of  by  him  in  due  course  of 
business,  or  by  the  defendant  a  short  time  thereafter,  when  the  stock 
was  sold  in  bulk. 

Upon  these  facts,  the  single  question  presented  is  whether  the  de- 
fendant is  liable  for  the  goods  so  purchased  by  her  son,  and  this  de- 
pends upon  whether  he  is  to  be  regarded  as  a  general  or  special  agent. 
If  his  agency  was  special,  the  defendant  is  not  liable,  because  he  ex- 
ceeded his  authority ;  but,  if  general,  his  principal  is  bound,  notwith- 
standing he  acted  contrary  to  her  instructions;  A  general  agent  is 
one  authorized  to  transact  all  his  principal's  biisiness,  or  all  his  busi- 
ness of  some  particular  kind,  while  a  special  agent  is  one  authorized  to  , 
do  one  or  more  specific  acts  in  pursuance  of  particular  instructions,  or  "  •'  /, 
within  restrictions  necessarily  implied  from  the  act  to  be  doney   1  Am.  _ 

&  Eng.  Enc.  Law  (2d  Ed.)' 985.*"     Within  these  definition/ the  de-  y^   ^   ^/f 
fendant's  son  must  be  regarded  as  a  general  agent.     The  mere  fact/^      /  w 

that  his  authority  was  confined  to  a  particular  business  did  not  make 
him  a  special  agent.  He  was  given  full  charge  and  control  of  the 
business,  with  power  to  sell  and  dispose  of  the  stock  and  replenish  it 
by  purchasing  new  goods ;  and  therefore  his  pciticipal  is  liable  for  his 
acts,  within  the  scope  of  his  apparent  authoaty,  notwithstanding  he 
may  have  disregarded  his  secret  instructions. |  If  a  general  agent  dis- 
regards his  instructions,  his  acts  will  ncvertllclcss  be  binding  on  his 
principal,  so  far  as  third  persons  who  deal  with  him  without  notice  are 
con^rncd,  although  he  may  be  personally  liable  to  his  principal  there- 
for. J 

Tl/s  rule  has  been  frequently  applied  by  the  courts  to  facts  similar 

to-Wose  in  hand.    Thus,  in  Drug  Co.  v.  Lyneman,  10  Colo.  App.  249, 

\ 
*'>  For  d<*tiiiili(iiis  of  u(Micr;il  aii<l  sptfial  jik<'Ii1s,  st'c  uiiLo,  p.  20.  'I'liat  there 
Is  a  well-.';('ttl»(l  distiiirtion  in  tlio  ruk's  of  liability  for  tlio  acts  of  Koiicral  and 
of  .special  aKi-nts  is  often  asserted,  iiarlieularl.v  in  tlie  older  cases.  Minui  v. 
Couiniisslon  Co..  !">  Joliiis.  44.  s  Am.  I  >(K'.  LMt>  (ISIS).  That  the  autiiority  is 
limited  to  a  partieular  Inisiness  does  not  make  it  special.  therefor(>  it  may  he 
ns  general  in  regard  to  that  as  tlnamh  its  range  were  nMlimite<l.  .Vnderson 
V.  Coonley.  lil  \Vend.  1^7!)  (is:!;>),  api'roved  and  elahoraled  in  Crnzan  v.  Sndth, 
41  Ind.  iiss  (\S~2).  Sec,  also.  I'Mshliaiit;h  v.  Spnnangle,  US  Iowa.  .'{.'{7,  5>2 
X.  W.  r.S  (l!K)liK  Ntihle  V.  Nn^'eiit,  SO  111.  .-.22  (1S7S);  Wheeler  v.  MctJnire,  S(! 
Ala.  402.  5  Scaith.  1!»(».  2  L.  U.  A.  SOS  (1SSS);  I.iddell  v.  Sahline,  .'"..-.  Ark.  (!27. 
17  S.  W.  70.->  (ist)l).  Kven  in  courts  niaking  this  distinction,  it  is  neverthe- 
less recognized  that  a  general  agent,  acting  nnder  siie<|lie  instructions  known 
to  third  persons,  has  no  more  power  to  hind  his  iiriiicipal  hy  .'lets  oiitsido 
those  instrnctlons  than  has  a  special  agent.  U.  S.  v.  Williams,  Fed.  Ca.s.  No. 
1P..724.  1  Ware  (17".)  n.*?  (ISTW). 


'  U'i^-^ 


/u/u 


L 


"^^44  TOK  ArTiK^itriY  (Part  2 

50  Pac.  736,  a  drug;  business  belonging  to  a  married  woman  was  con- 
ducted by  her  husband  as  general  manager,  and  she  was  held  liable 
for  the  goods  purchased  by  him,  although  she  told  plaintiflf's  salesman 
that  her  agent  must  no  longer  buy  goods  of  his  company ;  it  being 
assumed  that,  because  the  goods  were  delivered  and  mingled  with 
the  stock  and  sold,  the  limitation  on  the  authority  of  the  agent  had 
been  withdrawn.  In  White  v.  Leighton,  15  Neb.  424,  19  N.  W.  478, 
the  defendant  was  carrying  on  a  business  through  an  agent,  under  an 
^Sigreement  that  he  was  not  to  give  orders  for  goods  without  the  con- 
sent of  his  principal.  The  court  held,  however,  that  because  the  agent 
was  in  charge  of  the  business,  and  held  out  to  the  world  as  having 
authority  to  do  everything  necessary  to  carry  it  on,  his  principal  was 
liable  for  merchandise  purchased  by  him  of  parties  having  no  notice  of 
the  limitation  of  his  authority.  In  Palmer  v.  Cheney,  35  Iowa,  281,  the 
defendant  was  engaged  in  the  mercantile  business,  which  was  under 
the  control  of  her  son  as  her  general  agent.  The  goods  constituting 
the  foundation  of  the  plaintiff's  claim  were  purchased  by  the  son,  re- 
ceived at  the  store,  and  sold  as  other  goods  were.  The  defendant  was 
held  to  be  liable,  although  she  was  present  when  the  order  was  given, 
and  directed  her  son,  in  the  presence  of  the  plaintiff's  agent,  to  buy 
no  more  goods  than  he  could  pay  for  at  the  time.  The  court  ruled 
that  the  fact  that  the  goods  were  received  at  the  store  and  disposed 
of  by  the  defendant's  agent  amounted  to  a  ratification  of  the  contract 
of  purchase,  and  that  the  instruction  given  by  defendant  to  her  agent 
to  buy  no  more  goods  than  he  could  pay  for  did  not  have  the  effect 
of  limiting  his  authority,  or  depriving  him  of  the  character  of  a  general 
agent.  In  McDowell  v.  McKenzie,  65  Ga.  630,  it  was  held  that  a  mer- 
chant whose  agent  purchased  goods  in  New  York  on  credit,  although 
the  credit  was  unauthorized,  could  not  refuse  to  pay,  when  he  had 
received  and  sold  the  goods  and  pocketed  the  proceeds.  See,  also, 
Smith  V.  Holbrook,  99  Ga.  256,  25  S.  E.  627;  Webster  v.  Wray,  17 
Neb.  579,  24  N.  W.  207;  Stapp  v.  Spurlin,  32  Ind.  442;  Cruzan  v. 
Smith,  41  Ind.  288. 

It  follows  from  these  views  that  the  judgment  of  the  court  below 
must  be  reversed,  and  a  new  trial  ordered. 


SORREL  V.  BREWSTER. 

(Supreme  Court  of  Michigan,  1850.     1  Mich.  373.) 

Assumpsit.     Verdict  for  plaintiff.     New  trial  denied. 

Green,  J.*^  The  first  inquiry  which  naturally  arises  in  this  case, 
is,  what  was  the  nature  and  extent  of  Raitte's  agency,  in  purchasing 
the  furs  in  question,  as  between  Brewster,  his  principal,  and  the  plain- 
tiff?    If  we  are  able  to  arrive  at  a  satisfactory  conclusion  upon  this 

*i  I'art  of  the  opinion  is  omitted. 


Ch.  1)  NATURE    AND    EXTENT  345 

question,  there  will  be  no  serious  difficulty  in  determining  the  rights  of 
the  parties  involved  in  this  suit. 

The  only  evidence  of  Raitte's  power  to  act  as  the  agent  of  Brew- 
ster, is  found  in  the  letters  of  Brewster,  dated  the  24th  of  April,  1844, 
one  of  which  is  addressed  to  the  plaintiff,  and  the  other  to  Raitte. 

In  his  letter  to  the  plaintiff,  the  defendant  says:  "On  my  return 
to  Fort  Wayne  yesterday  from  the  south,  I  found  your  letter  of  the 
9th  inst.,  advising  me  that  you  had  from  five  thousand  to  eighi  thou- 
sand fur  skins,  mostly  coon,  which  you  wished  to  sell,  and  which  I 
should  be  glad  to  purchase.  As  my  business  will  detain  me  one  or 
two  weeks  yet  in  this  country,  I  have  this  day  written  to  Mr.  Thos. 
G.  Raitte,  of  Norwalk,  who  is  my  agent,  to  make  you  a  visit  for  the 
purpose  of  purchasing  your  furs,  and  I  hope  and  trust  that  you  and 
Mr.  R.  will  be  able  to  make  a  bargain  for  your  lot  of  furs." 

In  his  letter  to  Raitte  of  the  same  date,  the  defendant  says :  "An- 
nexed I  hand  you  a  copy  of  a  letter  which  I  received  yesterday  at 
Wayne,  from  Mr.  Sorrel  of  Lithopolis,  and  I  wish  you  to  see  Mr.  S. 
without  delay,  and  see  if  you  can  purchase  his  lot  of  furs ;  but  if  you 
cannot  make  a  trade  with  him  for  them,  I  wish  you  to  write  me  at 
Fort  Wayne  (to  which  place  I  shall  return  and  remain  one  or  two 
weeks),  and  also  to  Maumee  City  and  Detroit,  so  that  I  shall  get  your 
letter  at  one  of  those  places,  and  I  will  go  and  see  Mr.  S.  with  you, 
and  see  if  I  can't  purchase  them.  If  you  can't  buy  Mr.  S.'s  furs,  I 
wish  you  to  make  an  agreement  with  him  to  keep  them  until  I  can 
see  him,  as  it  will  not  do  for  us  to  lose  so  large  a  lot  of  furs  this 
season." 

There  does  not  appear  to  be  any  evidence  that  the  contents  of  this 
last  letter  were  made  known  to  the  plaintiff  at  or  before  the  time  of 
the  sale,  nor  is  it  at  all  material  whether  such  was  the  fact  or  not,  there 
being  nothing  in  it  which  does  not  harmonize  perfectly  with  that  writ- 
ten to  the  plaintiff. 

The  defendant,  then,  must  be  held  bound  by  the  acts  of  Raitte,  as 
his  agent,  to  the  extent  to  which  he  held  him  out,  in  his  letter  to  the 
plaintiff,  as  being  authorized  to  act  for  him.  In  that  letter  he  informs 
the  plaintiff  that  Raitte  is  his  agent,  and  that  he  has  written  to  him  to 
make  the  plaintiff  a  visit  for  the  purpose  of  purchasing  the  lot  of  furs 
in  question,  and  hopes  they  will  be  able  to  make  a  bargain  for  them. 
Here  is  no  restriction,  or  limitation,  or  condition  whatever  imposed 
upon  the  power  of  the  agent  in  making  the  purchase  indicated  by  the 
principal ;  but  the  fact  of  the  agency  is  announced  in  the  most  gen- 
eral terms,  accompanied  by  an  invitation  on  the  part  of  the  principal 
to  the  plaintiff  to  bargain  with  the  agent  as  such.** 

<2  Some  ca.scs  distinguish  betwoon  tlw  oxfcnt  of  tho  nuthority,  whether  llni- 
Jtf'd  or  uriliinltod,  niid  the  nnture  nf  the  imi'iicy.  whether  ;:('iienil  or  sii(<'i;il. 
In  either  case  an  agent,  acting  witliin  the  general  scope  of  tlie  authority,  held 
out  to  the  world  by  the  prlnelpal,  will  bind  him.  Noble  v.  Is'ugeut,  S9  111. 
522  (1878),  citing  Doan  v.  Duncan,  17  111.  272  (IKft.')).     Others  regard  an  agency 


346  THK  ArriioiMTY  (Part  2 

This  case  is,  tlicn,  very  (.k-arly  distins^iiishable  from  that  chiss  of 
special  ai:;cncics,  in  whicli  tlic  aj^ciuy  is  not  hcUl  out  by  the  principal, 
hy  any  acts,  or  declarations,  or  implications,  to  be  general  in  regard 
to  the  particular  act  or  business.  In  the  latter  case  it  must  from  neces- 
sity be  construed  according  to  its  real  nature  and  extent ;  and  the 
other  party  must  act  at  his  own  peril,  and  is  bound  to  inquire  into 
the  nature  ami  extent  of  the  authority  actually  conferred.  Story  on 
Agency.  §  Lxv 

In  a  note  to  this  section.  Judge  Story  very  justly  remarks,  that  "the 
whole  dilticulty.  in  considering  this  doctrine,  arises  from  confounding 
two  things  with  each  other,  which  are  essentially  distinct,  namely,  the 
extent  of  the  authority  given  to  an  agent,  whether  it  be  limited  or 
unlimited,  with  the  nature  of  the  agency  in  which  he  is  employed, 
whether  it  be  general  or  special.  A  person  may  be  a  general  agent, 
that  is,  he  may  be  employed  in  the  general  business  of  his  principal, 
and  yet  he  may  be  privately  limited  in  the  exercise  of  his  agency,  by 
certain  instructions  given  by  his  principal,  far  within  the  general 
scope  of  that  business.  On  the  other  hand,  he  may  be  a  special  agent, 
that  is,  he  may  be  employed  for  a  particular  object  only,  and  yet  he 
may  have  an  unlimited  authority  to  act  within  the  scope  of  his  agency 
in  that  particular  affair,  or  he  may  be  limited  therein  by  like  instruc- 
tions." 

In  section  133,  before  referred  to,  Judge  Story  illustrates  the  doc- 
trine thus:  "If  a  merchant  should  appoint  a  special  agent  pro  hac 
vice,  to  buy  or  sell  a  cargo  of  cotton  for  him  in  his  discretion,  and 
he  should,  by  an  open  letter,  state  that  he  had  so  authorized  the  agent 
to  buy  or  sell  on  his  account,  and  that  he  would  ratify  and  confirm 
his  acts  in  the  premises ;  a  person  who  should  deal  with  the  agent 
upon  the  faith  of  that  letter,  and  buy  or  sell  the  cargo  of  cotton  ac- 
cordingly, would  be  entitled  to  hold  the  principal  bound  by  the  acts 
of  the  agent,  although  the  latter  might  have  violated  his  secret  instruc- 
tions as  to  the  price  of  the  cotton  purchased  or  sold."  See,  also,  note 
2  to  section  127,  Id. 

Let  us  apply  this  doctrine,  thus  explained  and  illustrated,  to  the 
case  before  us.  The  defendant  advertises  the  plaintiff  that  Raitte  is 
his  agent,  and  that  as  such  he  has  requested  him  to  visit  the  plain- 
tiff, to  purchase  his  lot  of  furs.  He  makes  no  allusion  whatever  to 
any  restriction  of  his  agent's  power.  He  thus  recommends  Raitte 
to  the  plaintiff's  confidence,  as  one  with  whom  he  may  safely  bargain 
for  the  sale  of  his  furs.  What,  then,  had  any  arrangement  between 
the  defendant  and  Raitte,  of  which  the  plaintiff  had  no  knowledge, 
to  do  with  the  rights  of  the  parties?    The  plaintiff  has  a  right  to  hold 

under  limited  and  circumscribed  powers  as  a  special  agency.  See  Gibson  v. 
Snow  Hardware  Co.,  94  Ala.  34G,  10  South.  304  (1S91),  ante,  p.  10;  Bohart 
V.  Oberne.  36  Kan.  2.S4,  13  Pac,  .388  (1887),  and  Littleton  v.  Loan  Ass'n,  97 
(Ja.  172,  25  S.  E.  826  (1895),  especially  the  dissenting  opinion  of  Atkin- 
son, J. 


Ch.  1)  NATURE    AND    EXTENT  347 

the  defendant  bound  by  the  acts  of  his  agent,  within  the  scope  of  that 
agent's  authority,  notwithstanding  such  agent  may  have  acted  in  bad 
faith  towards  his  principal,  or  violated  any  instructions,  or  private 
understanding  or  agreement  between  them.  Hence,  the  testimony 
which  was  offered  on  the  part  of  the  defendant,  of  an  agreement  be- 
tween himself  and  Raitte,  in  regard  to  the  advance  of  moneys  and 
the  purchase  of  furs,  was  irrelevant,  and  the  objection  made  to  its 
introduction  was  well  grounded. 

Putting  this  testimony  entirely  out  of  the  case,  the  facts  appear 
thus :  Raitte,  as  the  agent  of  the  defendant,  acting  under  a  general 
authority  for  that  purpose,  bargained  with  the  plaintiff  for  his  entire 
lot  of  furs.  Upon  ascertaining  the  quantity,  it  appeared  that  they 
amounted  to  more  than  the  parties  had  anticipated,  and  Raitte  stated 
to  the  plaintiff  that  he  had  not  funds  enough  with  him  to  pay  the  en- 
tire sum  to  which  they  amounted.  For  the  balance,  it  was  then  agreed 
that  Raitte  should  give  the  plaintiff  Brewster's  due  bill,  which  was 
done,  and  the  furs  were  all  afterwards  delivered  by  Raitte  to  the 
defendant.     ♦     *     * 


^^  li 


^'  "  McALPIN  v.  CAS  SIDY. 
(Supreme  Court  of  Texas,  1856.     17  Tex.  449.) 

Suit  for  $915.20  for  goods  and  merchandise  furnished,  sold,  and 
delivered.     Answer,  payment  to  agents  of  plaintiffs. 

Wheeler,  J.*^  There  were  two  principal  questions  contested  at 
the  trial:  (1)  Whether  Hill  was  the  agent  of  the  plaintiff's;  (2)  wheth- 
er, as  agent,  he  had  authority  to  receive  payment  of  the  debt  of  his 
principal  in  satisfaction  of  his  own  individual  debts.  The  decision 
of  the  case  turned  mainly  on  the  latter  question;  and  the  verdict  and 
judgment  affirm  that  he  had  such  authority. 

There  is  no  question  that  Field  was  the  general  agent  of  the  plain- 
tiffs. He  appears  to  have  had  authority  for  soliciting,  receiving  and 
forwarding  orders  upon  their  house,  collecting  moneys  due  them,  and 
promoting  generally   the   extension  of  their  business.     This  appears  ^       \^ 

to  have  been  the  general  scope  of  his  authority;  and  the  evidence  was, 
perhaps,  sufficient  to  authorize  the  jury  to  conclude  that  Hill  had  a 
like  agency  and  authority.  This,  however,  is  the  utmost  which  the 
evidence  respecting  his  general  authority  can  be  claimed  to  have  es-  >^ 
tablished.  The  question  then  is,  whether  it  was  within  the  sco])e  of  '  ' 
his  authority,  as  such  agent,  to  accept  satisfaction  of  the  debt  of  his 
principal  in  the  payment  of  his  own  debts.  And  it  is  clear  that,  with- 
out the  consent  of  his  principal,  express  or  implied,  it  was  not.  His 
authority  as  a  collecting  agent  gave  him  no  right  to  change  the  secu- 
rity of  his  princii)al  for  the  debts,  or  to  make  himself  the  debtor  to 
the  principal   for  the  like  amount  in  lieu  of  the   persons  who  owed 

<•''  Tart  of  (he  ()|)iuioii  is  ouiitted. 


,N 


0         ,  r 


348  Tiiio  AuriioKiTY  (Part  2 

the  debts,  without  the  consent  of  the  principal,  express  or  implied, 
to  that  etTect.    Story  on  Ajjency,  §§  99,  413. 

There  is  no  evidence  of  any  cxi)ress  authority  or  assent,  on  the 
part  of  the  plaintilTs,  to  any  such  arrangement;  or  of  any  usage  of 
trade,  or  of  any  course  of  dealing  between  the  parties,  from  which 
such  authority  might  be  implied.  There  is  nothing  in  the  evidence 
to  warrant  the  belief  that  the  agent  had  authority  to  receive  payment 
otherwise  than  in  the  ordinary  mode  of  business ;  and  that  is,  ordi- 
narily, to  receive  it  in  money  only.  Story  on  Agency,  §§  98,  99,  181 ; 
Robson  V.  Watts,  11  Tex.  764.  There  may  be  circumstances  which 
will  vary  this  duty.  But  there  are  none  such  in  this  case.  The  same 
general  principle  pervades  all  cases  of  agency,  whether  general  or  spe- 
cial ;  that  is,  that  the  principal  is  bound  by  all  the  acts  of  his  agent 
within  the  scope  of  the  authority  which  he  holds  him  out  to  the  world 
to  possess.  But  when  the  agent  exceeds  the  scope  of  that  authority, 
no  act  of  his  is  binding  on  his  principal.  A  general  agency  properly 
exists  where  there  is  a  delegation  of  authority  to  do  all  acts  con- 
nected with  a  particular  trade,  business  or  employment.  But  such  an 
agent  can  no  more  bind  his  principal  when  he  transcends  the  scope 
of  his  employment,  than  can  a  special  agent  whose  authority  is  lim- 
ited to  a  single  act.  Every  agency  carries  with  it,  or  includes  in  it 
as  an  incident,  all  the  powers  which  are  necessary,  or  proper,  or  usual, 
as  means  to  effectuate  the  purposes  for  which  it  was  created,  and 
none  other. 

In  this  respect  there  is  no  distinction,  whether  the  authority  given 
to  an  agent  is  general  or  special,  expressed  or  implied.  In  each  case  it 
embraces  the  appropriate  means  to  accomplish  the  desired  end,  and 
is  limited  to  the  use  of  those  means.  If  the  agency  arises  by  impli- 
cation from  acts  done  by  the  agent  with  the  tacit  consent  or  acquies- 
cence of  the  principal,  it  is  deemed  to  be  limited  to  acts  of  a  like  na- 
ture ;  if  from  the  general  habits  of  dealing  between  the  parties,  it 
is  deemed  to  be  limited  to  dealings  of  the  same  Ivind ;  if  from  the 
employment  of  the  agent  in  a  particular  business,  it  is  in  like  manner 
deemed  to  be  limited  to  that  particular  business.  "And  the  authority 
must  be  implied  from  facts  which  have  occurred  in  the  course  of 
such  employment,  and  not  from  mere  ^rgument,  as  to  the  utility  and 
propriety  of  the  agent's  possessing  it.  fi  it  arises  from  an  authority 
to  do  a  single  or  particular  act,  the  agency  is  limited  to  the  appropri- 
ate means  to  accomplish  that  very  agi,  and  the  required  end;  and 
the  implied  agency  stops  there.  In  snort,  an  implied  agency  is  never 
construed  to  extend  beyond  the  obvious  purpose  for  which  it  is  ap- 
parently created.  The  intention  of  parties,  deduced  from  the  nature 
and  circumstances  of  the  particular  case,  constitutes  the  ground  of 
every  exposition  of  the  extent  of  the  authority,  and  when  that  inten- 
tion cannot  be  clearly  discovered,  the  agency  ceases  to  be  recognized 
or  implied."  Story  on  Agency,  §  87.  It  is  upon  this  principle  that 
it  is  held  that  an  agent  employed  to  receive  payment  is  not,  in  general. 


c# 


Ch.  1)  NATURE    AND    EXTENT  340 

clothed  with  authority  to  compound  the  debt,  or  to  commute  it  for 
something  else,  as  his  own  debt;  but  can  only  receive  it  in  money, 
unless  his  particular  employment  confers  the  authority,  or  it  can  be 
implied  from  the  general  usage  of  business,  or  the  habits  of  dealing^ 
between  the  parties.  This  is  the  well  settled  doctrine  of  the  law,  and 
it  is  obviously  founded  in  reason  and  justice. 

The  only  evidence  of  an  express  authority  to  Hill  to  collect  the  debt 
or  receive  payment  is  found  in  the  testimony  of  Hill  himself,  to  the 
effect  that  Field,  after  collecting  a  part,  placed  the  balance  of  th€  claim 
in  his  hands,  telling  him  that  he  was  satisfied  that  Cassidy,  one  of 
the  defendants,  was  considerably  involved,  and  authorized  him  to  set- 
tle the  claim  in  any  way  that  would  be  advantageous  to  the  plaintiffs. 
It  cannot  be  pretended  that  this  gave  the  authority  claimed  for  Hill, 
of  using  the  claim  to  pay  off  his  own  various  indebtedness,  when- 
ever and  however  contracted,  even  if  Field  had  been  empowered  by 
the  plaintiffs  to  confer  such  authority.  The  attempt  seems  to  have 
been  to  justify  the  assumption  of  authority  by  Hill,  and  the  extraor- 
dinary mode  of  settling  the  debt  due  the  plaintiffs  on  the  ground 
that  Cassidy  was  in  failing  circumstances.  But  if  it  were  so,  the  ob- 
vious duty  of  Hill  under  the  authority  from  Field  was,  to  take  meas- 
ures to  secure  the  ultimate  payment  of  the  debt.  The  authority  went 
to  that  extent  and  no  further,  unless,  at  least,  it  were  proved  that  the 
other  disposition  made  of  it  was  most  to  the  advantage  of  the  plain- 
tiffs. But  the  attempt  to  justify  the  assumption  of  authority  on  that 
ground  appears  to  be  unfounded  in  point  of  fact,  as  well  as  in  law. 
The  proof  is  that  Cassidy  was  at  that  time  considered  solvent,  and 
there  is  no  evidence  that  his  codefendant,  who  was  jointly  liable  for 
the  debt,  was  in  failing  circumstances.  But  it  would  make  no  differ- 
ence, as  respects  the  authority  of  the  agent,  if  both  were  in  failing 
circumstances  and  the  plaintiffs  were  in  danger  of  losing  their  debt; 
since  the  mode  of  settlement  adopted  was  not  in  accordance  with  the 
ordinary  mode  of  business  under  the  circumstances,  and  there  is  no 
evidence  of  any  usage  of  trade,  or  business  habits  of  the  parties,  or 
any  authorization  or  assent  by  the  plaintiffs,  express  or  implied,  to 
such  an  arrangement.     *     *     * 

For  errors  in  the  trial,  reversed  and  remanded. 


BATTY  V.  CARSVVELL. 

(Siiprome  Court  of  Judicntiire  of  Now  York,  IKnO.     2  Tolina.  48.) 

Assumpsit  upon  a  promissory  note.     Verdict   for  plaintiff. 

Livingston,  J.,  delivered  the  ojiinion  of  tiic  court.  This  was  a 
special  power,  and  ought  to  have  been  strictly  pursued.  But  the  note, 
to  which  Abner  Carswell  authorised  the  witness  to  put  his  name,  was 


350  TTTT  AT'TTioniTy  (Part  2 

to  be  payable  in  six  immtbs  ;  wbeieas,  tbe  one  be  sii^ned  bad  only 
sixty  days  to  run.  Tbe  note,  tben,  as  far  as  it  concerned  Abner,  ad- 
mitting tliere  was  no  revocation,  was  made  witbout  bis  autbority.  Mis 
confession,  after  tbe  suit  was  commenced,  does  not  alter  tbe  state 
of  tbe  case.  It  was  merely  tbat  be  bad  allowed  David  to  put  bis  name 
to  a  note.  Tbis  nuist  bave  been  tbe  one  of  wbicb  tbe  first  witness 
speaks,  wbicb  was  to  be  payable  in  six  nioiUbs. 

Tbere  nuist  be  a  new  trial,   wilb  costs  to  abide  tbe  event  of  tbe 
suit.     New  trial  granted. 


YOUNG  V.  HARBOR  POINT  CLUB  HOUSE  ASS'N. 

(Appellate  (\nirt  of  Illinois,  1901.    09  111.  App.  200.) 

Harker,  p.  J.''*  Tbe  plaintiff  in  error  brougbt  tbis  suit  to  re- 
cover for  breach  of  an  alleged  contract  witb  tbe  defendant  in  error 
whereby  be  was  employed  as  room  clerk  for  the  hotel  of  the  defend- 
ant in  error  for  tbe  summer  season  of  1899,  at  a  salary  of  $100  per 
month.  The  case  was  tried  by  the  court  by  agreement  witbout  a  jury 
in  connection  with  the  one  brought  by  L.  C.  Young  against  the  Harbor 
Point  Club  House  Association  already  considered  in  review  by  this 
court,  99  111.  App.  292.  The  court  found  the  issues  against  the  plain- 
tiff and  entered  judgment  against  him  for  the  costs. 

We  agree  with  tbe  conclusion  reached  by  the  trial  court.  There  was 
no  valid  contract  of  employment  made  between  the  plaintiff  and  bis 
father  as  agent  of  the  defendant.  The  agency  of  plaintiff's  father  was 
a  special  and  not  a  general  one.*°  He  was  authorized  to  employ  a 
room  clerk  subject  to  the  approval  of  defendant  as  to  salary.  The 
proper  construction  to  place  upon  tbe  language  of  Tracy  in  his  letter 
of  March  25th,  "We  have  always  paid  $75  per  month  for  this  position 

4*  Part  of  the  opinion  is  omitted. 

*5  "This  distinction  between  general  and  special  agencies  is  sometimes  very 
unsatisfactory.  Whether  the  authority  be  general  or  limited,  the  servant  can- 
not charge  the  master  if  he  exceeds  it.  lie  is  of  course  more  likely  to  tran- 
scend the  bound.s  of  a  narrow  than  of  an  extended  power;  hut  the  princi- 
ple in  either  case  is  the  same:  Within  his  commission  he  binds  his  master, 
beyond  it  he  does  not."  1  Minor's  Institutes,  20(;,  api)roved  in  Cross  v.  A., 
T.  &  S.  F.  R.  K.  Co.,  141  Mo.  132,  42  S.  W.  G75  (1897).  In  the  dissenting 
opinion  of  Comstock,  J..  Farmers'  &  Mechanics'  Bank  v.  Butchers'  &  Drover.s' 
Bank,  16  X.  Y.  125.  148.  GO  Am.  Dec.  (178  (1857),  it  is  said  that  the  distinc- 
tion between  general  and  special  agencies  is  valuable  in  some  cases,  but  In 
most  of  no  value  wliatever.  The  difficulty  is  in  ai)])lyiiig  the  general  prin- 
ciples to  the  particular  facts,  so  as  to  determine  from  the  facts  the  character 
of  the  agency  and  the  authority.  Mcintosh  &  Huntington  Co.  v.  Kice,  13 
Colo.  App.  303,  58  Pac.  .358  (1800).  It  seems  impossil)le  to  define  the  terms 
"genera!"  and  "special"  in  terms  which  make  the  definition  applicable  to  each 
particular  case.  It  by  no  means  follows  that  one  called  a  general  agent  has  a 
certain  power,  but  that  when  he  is  called  a  special  agent  this  power  may  not 
he  taken  to  be  within  the  limits  of  his  authority.  Mcrdiants'  Insurance  Co. 
v.  N.  M.  Luiiil)er  Co.,  10  Colo.  App.  223,  51  Pac.  174  (1S07). 


Ch.  1)  NATURE    AXD    EXTENT  351 

and  trust  you  can  see  your  way  to  have  your  son  accept  at  that  price," 
is  that  it  was  a  Hmitation  upon  his  authority  as  to  price.  When  the 
agency  is  special,  the  authority  must  be  strictly  pursued,  and  the  prin- 
cipal is  not  bound  if  the  agent  exceeds  his  authority.  It  is  the  duty 
of  a  person  dealing  with  a  special  agent  to  ascertain  the  extent  of  his 
authority,  and  if  he  does  not,  he  must  suffer  the  consequences.  Wil- 
liams V.  IMerritt,  23  111.  623;  Blackmer  v.  Summit  Coal  &  ^^lining  Co., 
187  111.  32,  58  N.  E.  289."  All  the  knowledge  the  plaintiff  had  of  his 
father's  agency  was  derived  from  Tracy's  letters.  His  father  was  not 
in  control  of  the  hotel  but  was  more  than  a  thousand  miles  away  from 
ji.      *     *     * 

Judgment  affirmed. 


BASS  DRY  GOODS  CO.  v.  GRANITE  CITY  ^lANFG.  CO. 

(Supreme  Court  of  Georgia.  190.3.     119  Ga.  124,  45  S.  E.  9S0.) 

Action  on  contract  for  failure  to  deliver  goods  sold.  Verdict  for 
defendants. 

Lamar,  J.*^  The  court  charged:  "If  you  believe  from  the  evi- 
dence *  *  *  that  Arnold  sent  Brown  to  the  plaintiff  with  instruc- 
tions to  sell  the  goods  in  question  to  theni  at  a  certain  price,  or  at 
figures  not  below  a  certain  price,  you  would  be  authorized  to  find  that 
Brown  was  the  special  agent  of  Arnold,  and.  as  between  Arnold  and 
plaintiff,  the  plaintiff  would  be  bound  to  take  notice  of  the  instruction 
given  Brown  by  Arnold."  This  was  error.  Assuming  that  the  goods 
were  not  on  hand,  and  that  therefi)re  Arnold  was  principal,  it  appeared 
that  he  had  written  Brown,  "While  in  Atlanta  call  on  Bass  Dry  Goods 
Co.  and  try  to  close  them  the  following  pants."  As  Brown  had  been 
appointed  traveling  salesman,  it  could  hardly  be  claimed  that  this 
letter  amounted  to  a  suspension  of  his  general  powers  as  such. 

Puit  even  if  it  be  treated  as  creating  a  special  agency  to  sell  particu- 
lar goods  to  a  particular  jjerson,  the  purchaser  was  only  reciuired  tc 
examine  his  authority.  This  the  purchasers  did  when  they  read  the 
letter.  They  were  not  bounfl  by  private  instructions  not  included  in 
the  writing,  but  were  justified  in  assuming  that  he  could  fix  the  price; 
that  being  an  essential  element  in  the  contract  of  sale.  While  a  gen- 
eral agent  has  broader  jjowers  than  one  selected  to  do  a  particular  act, 
the  authority  in  both  cases  must  be  construed  to  include  all  necessary 
and  usual  means  for  effectually  executing  it.  Where  one  is  appointed 
to  sell  a  particular  article  to  a  particular  person,  this  confers  on  the 

^u'lliis  Is  the  nmrc  triw  wlini  tlic  spfcial  aiitliiprlty  is  in  writing',  and  (lif 
act  of  tlic  ayrnt  is  not  t'sscritlal  to  tlic  acconiiilislinifiit  of  llic  iinriio.sr.  .Marlin 
V.  rarnswortli,  49  \.  Y.  .'">.'>.'".  (1s7'-'».  See,  ulso,  Feuu  v.  llariLson,  li  T.  11.  757 
(17'.Hn. 

*'  Tart   of  tin-  opinion  Is  omitted. 


.'>."2  Tun  AUTHORITY  (Part  2 

special  agent  authority  to  agree  on  the  price;  otherwise  tlie  appoint- 
ment is  ilhisory,  and  not  real.     Civ.  Code  1895,  §  3023;  P.arclay  v. 
Hopkins,  59  Ga.  562 ;  Ilohiian  v.  Ga.  R.  Co.,  67  Ga.  595.-'«     *    *     * 
Judgment  reversed. 


SECTION  6.— AUTHORITY  FOR  PARTICULAR  PUJIPOSES 

I.  To  Buy 
/ 


V.  VENN.      Lx^V 


BEECHER 

(Supreme  Court  of  Michigan,  1877.     35  Mich.  466.) 

^Tarston,  J.  Venn  brought  an  action  of  assumpsit  against 
Beecher  to  recover  a  balance  due  on  meat  ordered  for  and  delivered  at 
the  Biddle  House  in  1875.  This  meat  was  ordered  by  one  Maxwell, 
and  evidence  was  given  on  the  part  of  the  plaintiff  tending  to  show 
that  "Maxwell  was  in  Beecher's  employ  at  thirty  dollars  per  month; 
that  Beecher  was  the  owner  and  proprietor  of  the  hotel  and  employed 
Maxwell  as  his  agent  in  and  about  the  hotel,  and  in  running  it."  The 
plaintiff  further  introduced  evidence  tending  to  show  "that  the  defend- 
ant had  caused  to  be  inserted  in  the  Detroit  Tribune,  and  other  papers, 
an  advertisement,  in  which  Maxwell  was  named  as  manager  of  the 
Biddle  House."  There  was  no  evidence  given  tending  to  show  any 
custom  or  established  course  of  business  which  would  authorize  an 
agent  in  the  employ  of  the  proprietor  of  a  hotel  to  purchase  supplies 
for  the  same  on  credit  of  the  proprietor,  or  that  defendant  had  ever 
established  such  custom  or  practice.  Evidence  was  also  given  by  the 
plaintiff  tending  to  show  that  defendant  recognized  his  liability  and 
agreed  to  pay  any  balance  found  due. 

Evidence  was  also  given  tending  to  show  that  while  defendant  had 
held  himself  out  as  proprietor  and  owner  of  this  house,  that  he  had 
also  held  out  one  G.  M.  Pettee  as  his  agent,  and  that  a  balance  was 
due  plaintiff'  for  meat  ordered  by  and  delivered  to  Pettee  for  use  at 

4  8  Tlie  general  principles  as  to  special  authority  have  been  stated  many 
times,  but  the  great  dilliculty  arises  in  applying  them,  in  determining  what 
is  the  extent  of  the  special  authority,  and  what  powers  may  be  deemed  neces- 
sary for  its  execution.  "White  v.  Langdon,  30  Vt.  599  (1858).  The  authority 
"includes,  unless  the  inference  is  expressly  excluded  by  other  circumstances, 
all  the  usual  modes  and  means  of  accomplishing  the  ends  and  objects  of  the 
agency."  Mich.  So.  &  N.  Ind.  R.  R.  Co.  v.  Day,  20  111.  875,  71  Am.  Dec.  278 
(1858^  And  if  the  principal  clothes  the  special  agent  with  the  apparent  muni- 
ments of  a  greater  authority,  he  will  be  bound  accordingly.  Lister  v.  Allen, 
31  Md.  543,  100  Am.  Dec.  78  (1809) ;  In  the  case  of  the  special  agent,  how- 
ever, third  persons  are  under  special  duty  to  make  inquiry  concerning  the  nu- 
thority.  Dispatch  Ptg.  Co.  v.  Nat.  Bank  of  Com.,  109  Minn.  440,  124  N.  W. 
230  (1910). 


Ch.  1)  NATURE    AND    EXTENT  353 

the  Biddle  House.  Evidence  was  given  by  defendant  having  a  con- 
trary tendency  to  the  above. 

It  is  insisted  that  there  was  no  evidence  tliat  Maxwell  had  authority 
to  buy  the  meat  on  defendant's  credit,  and  that  the  evidence  did  not 
show  any  subsequent  recognition  by  the  defendant  of  his  liability,  or 
of  Maxwell's  authority,  and  that  the  court  erred  in  not  so  instructing 
the  jury. 

We  do  not  discover  any  error  in  the  charge  as  given,  or  in  refusing 
to  charge  as  requested,  upon  this  part  of  the  case.  The  evidence  fairly 
tended  to  show  that  Maxwell  had  authority  to  bind  the  defendant  in 
making  the  purchase.  Where  the  owner  and  proprietor  of  a  hotel 
employs  another  as  his  agent  in  and  about  the  hotel,  and  in  running  it, 
and  holds  such  person  out  as  manager  of  the  house,  we  are  of  opinion 
a  jury  would  be  warranted  in  finding  from  such  evidence  that  such  a 
person  had  authority  to  purchase  the  usual  and  necessary  supplies  for 
the  hotel,  and  to  bind  his  employer  in  making  such  purchases.  Such 
an  agent  cannot  well  manage  and  properly  take  care  of  a  hotel  if  he 
has  not  the  authority  claimed  in  this  case.*** 

Complaint  is  also  made  of  that  part  of  the  charge  illustrating  this 
case  by  the  authority  of  a  wife  to  purchase  necessaries.  The  jury,  we 
think,  could  not  have  been  misled  by  what  was  said;  they  were  cau- 
tioned against  applying  the  illustration  or  analogy  fully  to  the  case 
before  them. 

As  we  discover  no  error,  the  judgment  must  be  affirmed  with  costs. 
The  other  Justices  concurred. 


BORN  V.  SIMMONS. 
(Supreme  Court  of  Georgia,  1900.     Ill  Ga.  SG9,  36  S.  E.  056.) 

Action  between  W.  H.  Born  and  W.  E.  Simmons.  From  the 
judgment,  Born  brings  error.     Reversed. 

Simmons,  C.  J.  Uy  a  power  of  attorney  which  authorizes  the 
agents  "to  transact  all  such  business  as  I  may  not  be  able  to  attend 
to  in  person,  to  take  charge  of  and  attend  to  the  collection  of  all  my 
outstanding  debts,  *  *  *  to  look  after  the  collection  of  rents, 
make  divisions  of  crops  with  tenants,  make  such  compromises  and 
settlements  as  in  their  judgment  is  for  my  interest,  make  sale  of 
such  property  as  I  may  desire  to  disjjose  of  fr(jm  time  to  time,  and 
generally  to  do  and  perform  all  acts  that  I  might  do  were  I  in  good 
health,  and  for  this  purpose  *  *  *  ^^  j^j^,^  j^^y  i^m^^e  ^q  bonds, 
receipts,  and  such  other  papers  as  may  be  necessary  in  the  transac- 
tion of  the  business  heretofore  set  forth,"  the  agents  arc  not  given 

*"  A  sup('rintoiid«'iit  nf  n  iiiinc  liiis  audntrlty.  Iiy  virtue  of  Ills  position  mIoiic. 
to  Imi.v  provisions  for  n  liojirclin;:  lioiisi'  wliidi  arc  alisolulcly  iicccssjiry  to 
cnalilc  the  iiiin«>  tf)  rondnuf  lii  o|ii'i:i1ioii.  Imt  not  to  Iniy  articles  wliiili  arc 
clearly  not  si»  riMpilrcd.     Ilealil  v.  llciidy.  s<»  Cal.  ti;;:*,  L'T  I'ue.  <»7  (.INOl). 

(JoDD.rit.iSc  A. — L'.". 


:?.-4 


Tin:  Ai  riioitiTY 


(T^irt  2 


power  to  purchase  imiles  ami  waj^diis  and  qivc  promissory  notes 
therefor.  The  general  wurtls  in  the  ]>ii\ver  nnisl  ])c  construed  witli 
reference  to  tlic  specified  ohjecls  to  be  acci)nii)lished,  and  Hniited  by 
the  recitals  made  in  rei^ard  thereto.  Mechem.  .\j;.  §§  30h-30S;  Claflin 
V.  jersey  Works.  11  S.  \\.  7_'l,  S3  ("ia.  27,  and  cases  cited. '■^ 
Vi'M  Crui.xM.      lud^nient   reversetl. 


\h 


SMITH   I'RK.MIKR  TYlMi\\RlTl-:R   CO.  v.   NATIONAL 
HARTEL  LIGHT  CO. 

(Suiin-nio  Court  ot  New  York.  Ai)i)(>llate  Term,  1911.     72  Misc.  IJep.  405,  130 

X.  Y.  Supi).  i;{(3.) 

Skaiu'kv,  J.  I'his  action  was  brought  to  recover  $100  alleged 
to  be  the  agreed  price  of  a  typewriter  sold  and  delivered  to  the  de- 
fendant corporation.  The  evidence  is  insnf^cient  to  establish  that 
the  defendant  purchased  or  ratified  the  alleged  purchase  of  the  type- 
writer. It  appears  from  the  record  that  the  defendant  had  in  its 
employ  a  bookkeeper.  On  November  10,  1910,  the  defendant's  book- 
keeper, under  the  express  direction  of  an  officer  of  the  defendant, 
signed  an  order  for  one  tyj^ewriter.  This  typewriter  was  delivered 
and  paid  for.  On  December  1,  1910,  the  same  bookkeeper  signed  a 
second  order  for  an  additional  typewriter.  The  typewriter  was  de- 
livered to  the  defendant.  Upon  receiving  the  typewriter,  the  defend- 
ant promptly  repudiated  the  order  given  by  the  bookkeeper,  and  re- 
juested  the  plaintiff  to  remove  the  typewriter  from  the  defendant's 
)lace  of  business.  , 

The  record  affirmatively  sho\^  that  the  bookkeeper  had  no  actual 
ithority  to  make  the  purchase.\  ftWhile  it  is  true  that  authority  of 
an  assumed  agent  to  make  a  pt^dSase  will  be  implied,  where  the  al- 
leged principal  has  repeatedly  recognized  and  approved  of  similar 
acts,  still  a  single  act  done  under  express  authority  is  insufficient  to 
justify  the  inference  that  the  assumed^agent  has  the  apparent  author- 
ity to  suDject  the  alleged  principal  toKliability  upon  subsequent  pur- 
chases made  without  actual  authorit}?!!  Woods  v.  Francklyn  (Com. 
PI.)  19  N.  Y.  Supp.  377.  As  the  booMkeeper  was  without  actual  or 
apparent  authority  to  make  the  pu^hase,  the  defendant  was  not 
bound  by  his  act  in  attempting  so  to  do. 

The  judgment  is  reversed,  and  a  new  trial  ordered,  with  costs  to 
the  appellant  to  abide  the  event.    All  concur. 

~  50  An  ajieiit  of  a  manufacturing:  company,  in  charge  of  a  branch  store  for 
the  sale  of  its  jcood.s,  has  no  authority  to  buy  from  another  household  goods 
to  lie  delivered  to  third  persons,  though  he  represents  to  the  seller  that  he  has 
authority.  Cowan  v.  Sargent  Manfg.  Co.,  141  Mich.  87,  104  X.  \V.  :{77  (li)0.j). 
There  is  no  warrant  for  the  assumption  that  the  superintendent  of  one  mill 
has  any  authority  to  buy  for  another  mill.  Ilinde  I'aper  Co.  v.  Atterhury, 
107  C.  C.  A.  200.  is;j  Fed.  70  (1011).  A  manager  of  a  l)usiness  has  not  tlierehy 
authority  to  buy  upon  his  employer's  account.  Meyer  &  Co.  v.  Baldwin,  52 
Mi.ss.  2f;.'J  (1876). 


Cll.  1)  NATURE    AND    EXTENT  355 


^\\LArOX  V.  AUSTRO-AMERICAX  STAVE  &  LUMBER  CO 

(Circuit  Court  of  Appeals  of  United  States,   Second  Circuit,  1911. 
187  Fed.  564,  10!)  C.  C.  A.  254.) 

Lacombe,  Circuit  Judge. ^^  *  *  *  'p|-,g  paper  which  is  rehed 
upon  as  showing  the  terms  of  the  alleged  contract  is  in  the  form  of  a 
letter,  dated  Shreveport,  La.,  April  26.  1904.  addressed  to  defendants 
in  Xew  York,  and  signed  by  the  manager  of  plaintifif' s  mill,  who  had 
authority  to  make  contracts  of  sale.  The  Mr.  Gott  referred  to  in 
the  letter  was  a  representative  of  defendants  who  had  come  to 
Shreveport  from  Xew  York  in  reference  to  the  sale  of  plaintiff's  1904 
cut.  The  important  parts  of  the  letter  are  as  follows :  "We  confirm, 
herewith  our  verbal  agreement  made  with  your  Mr.  Harry  J.  Gott. 
We  agree  to  sell  to  you  and  you  agree  to  buy  from  us  all  the  selects 
and  the  firsts  and  seconds  and  box  boards  contained  in  our  cut  of 
Cottonwood  lumber  beginning  from  May  1,  1904  and  ending  Dec.  3L 
1904,  this  cut  to  consist  of  the  maximum  of  eight  million  feet  in  all. 
The  prices  will  be  as  follows :  $17  for  selects,  $20  for  firsts  and  sec- 
onds, and  $25  for  box  boards.  These  prices  are  for  1,000  feet  board 
measure  f.  o.  b.  cars,  Shreveport.  Xet  cash.  You  will  advance  to  us 
on  each  first  of  the  month  for  the  month  previous  on  this  contract  $10 
per  1,000  feet  board  measure  on  basis  of  log  run  mill  cuts  or  Xo.  3 
common  cut.  This  advance  to  be  made  on  the  box  conmion  lumber 
which  is  not  sold  under  this  contract,  in  consideration  of  a  rate  of  6 
per  cent,  interest,  and  on  the  other  lumber,  will  say  selects  and  better, 
the  advance  is  made  free  of  interest.  The  lumber  is  to  be  well  manu- 
factured and  sawn  *  *  *  g^  as  to  be  one  inch  thick  when  dry. 
The  lumber  is  to  be  well  piled  by  us  in  our  mill  yard.  The  advance 
of  $10  per  1,000  feet  board  measure  has  to  be  based  upon  the  meas- 
urement of  our  inspector  as  said  lumber  is  sawn,  after  allowing  5  per 
cent,  for  shrinkage  for  drying.  The  payment  is  to  be  made  in  such 
a  way  that  we  will  draw  sight  draft  on  you,  attaching  to  the  said 
draft  a  bill  of  sale  for  the  lumber  cut  during  the  month.  *  *  * 
All  the  lumber  under  this  contract,  selects  and  better,  has  to  be 
shipjjcd  and  paid  for  in  full  inside  of  six  months  after  it  is  cut." 

After  provisions  for  revision  of  measurement,  segregating,  num- 
bering, and  marking  each  pile  subject  to  advance,  inspection,  and 
loading  on  cars,  the  contract  proceeds:  "The  advance  of  $10  per 
1,000  on  box  lumber  which  grade  is  not  sold  under  this  contract,  lias 
to  be  repaid  to  you  according  to  shipments  made  at  the  end  of  tlu- 
month,  including  the  6  per  cent,  interest  less  the  difference  in  the 
])rice  of  the  selects  and  better  shipped  out  during  the  month.  I"<ir 
instance,  if  we  slii])  out  .500,0(X)  fett  of  l)ox  luinbrr  during  one  niontli. 
we  have  to  pay  back  to  you  at  the  end  of  the  month  .$5,(KK1  jijus  b 

6)  I'iW,  of  tlu'  M]iiiii(»n  is  oiiiilh-d. 


350  Tiir:  AUTiiouiTT  (Part  2 

per  cent,  iiilcrcst  on  this  $5,000.  I'Vcini  this  amount  is  to  he  deducted 
the  ditTerenee  hetween  the  $10  antl  tlie  price  ai^jreed  upon  the  selects 
and  hetter  shipped  out  durint;  the  said  month.  On  account  of  the 
short  time  your  Mr.  Gott  had  to  spend  here,  we  leave  it  to  you  to 
draw  up  a  contract  under  the  terms  mentioned  in  this  letter,  and  we 
agree  to  sign  and  return  it  to  you." 

There  is  a  sharp  conllict  of  testimony  as  to  what  took  place  when 
this  paper  was  drawn  up ;  but,  the  verdict  being  for  plaintiff,  we 
must  accept  the  narrative  of  Kobler,  its  manager.  The  writing  em- 
bodied correctly  the  terms  of  an  agreement  between  himself  and 
Gott,  it  was  signed  "The  Austro-American  Stave  and  Lumber  Com- 
pany," by  Kobler,  and  Gott  also  signed  with  his  own  name,  "H.  J. 
Gott,"  in  the  presence  of  a  witness  who  also  signed.  There  was  a 
carbon  copy.    Gott  took  the  original  away  with  him. 

The  first  question  raised  in  the  case  was  whether  Gott  had  any  au- 
thority, or  any  apparent  authority,  to  enter  into  this  contract  on 
behalf  of  the  plaintiff.  He  was  a  young  man  of  27,  sent  down  to 
Shreveport  by  defendants  after  some  correspondence  between  them 
and  the  plaintiff.  Examination  of  the  alleged  contract  shows  that 
it  is  a  peculiar  one.  It  provides  for  the  sale,  purchase,  and  delivery 
of  lumber  to  be  cut,  which  shall  be  of  certain  specified  grades.  It 
further  provides  for  advances  on  account  of  the  purchase  price  to  be 
made  from  time  to  time  as  such  lumber  is  cut,  and  also  for  measure- 
ment, inspection,  shipping,  etc.  All  these  clauses  are  usual  in  con- 
tracts of  this  sort,  and  any  one  who  had  apparent  authority  from  an- 
other person  to  purchase  lumber  for  such  other  might  very  well  be 
supposed  to  have  authority  to  bargain  as  to  those  provisions,  as  to 
when  advances  should  be  made,  in  what  amounts,  etc. 

But  this  document  contains  other  provisions  which  are  certainly 
unusual.  It  requires  the  purchaser  of  the  higher  grades  to  make 
advances,  not  only  on  the  monthly  cut  of  such  grades,  but  also  on 
the  monthly  cut  of  the  lower  grade,  which  he  had  not  agreed  to  buy. 
And  this  lower  grade,  as  we  have  seen,  is  more  than  one-half  of  the 
total  amount  of  lumber  cut.  In  other  words,  at  the  end  of  each 
month  the  purchaser  is  to  pay  part  of  the  purchase  price  of  the  lum- 
ber "cut  for  him  during  that  month,  and  is  also  to  lend  to  the  seller 
a  sum  of  money,  at  the  rate  of  $10  per  1,000  feet  board  measure  for 
all  box  common  lumber  cut  by  the  seller  for  his  own  use  or  to  be 
sold  by  him  to  some  one  else.  For  this  loan  the  seller  is  to  pay  in- 
terest at  6  per  cent,  until  it  is  repaid.  Moreover,  the  time  of  such 
repayment  is  left  uncertain.  The  language  is,  "If  we  ship  out  500,000 
feet  of  box  lumber  (common)  during  one  month  we  have  to  pay  back 
to  you  at  the  end  of  the  month  $5,000  plus  6  per  cent,  interest,"  but 
there  is  no  guarantee  that  500,000  feet,  or  e"Ven  one  foot,  will  be 
"shipped  out"  in  any  particular  month.  If  the  seller  were  not  able 
to  find  a  purchaser  for  his  box  common  month  by  month  as  it  was 


Ch.  1)  NATURE    AXD    EXTENT 


357 


cut,  it  would  not  be  shipped  out,  and  it  would  soon  come  to  pass, 
that,  besides  paying  advances  on  their  own  lumber  defendants  would 
be  loaning  plaintiff  many  thousands  of  dollars  to  enable  it  to  carry 
its  lumber  and  to  continue  cutting  more  of  it  to  sell  to  some  one  else. 

We  are  clearly  of  the  opinion  that  Gott's  assent  to  this  proposal 
cannot  be  held  to  bind  defendants,  unless  the  record  discloses  ap- 
parent authority  to  make  some  such  unusual  contract.     *     *     * 

The  court  found  no  evidence  of  such  authority  to  the  agent.  Judg- 
ment for  plaintiff  reversed. 


BROWN  V.  JOHNSON. 

(High  Court  of  Errors  and  Appeals  of  Mississippi,  1849.    12  Smedes  &  M.  398, 

51  Am.  Dec.  118.) 

Sharkey,  C.  J.''^  R.  M.  Johnson  authorized  B.  F.  Johnson  to  pur- 
chase for  him  a  particular  parcel  of  land,  being  part  of  section  32  in 
township  9,  range  4  west,  which  was  about  to  be  sold  under  a  decree 
of  the  chancery  court,  for  default  of  payment  by  a  purchaser  from 
the  state,  it  being  part  of  the  seminary  lands.  The  agent  did  not 
buy  the  land  he  was  authorized  to  purchase,  but  bid  off  and  pur- 
chased, in  the  name  of  his  principal,  part  of  section  thirty-one.  He 
borrowed  money  in  the  name  of  his  principal,  to  make  the  cash  pay- 
ment required  by  the  terms  of  the  sale,  and  in  his  name,  also,  ex- 
ecuted bonds  to  the  state  for  the  remaining  two  thirds  of  the  pur- 
chase money. 

So  soon  as  R.  M.  Johnson  was  informed  of  what  had  been  done, 
he  disaffirmed  the  contract  of  the  agent,  and  filed  a  petition  in  the 
chancery  court  to  prevent  the  confirmation  of  the  sale,  and  the  chan- 
cellor thereupon  set  it  aside,  and  ordered  the  bonds  to  be  delivered 
up,  and  also  that  the  land  should  be  resold  according  to  the  terms  of 
the  original  decree.  Governor  Brown,  some  time  afterwards,  filed 
a  petition  that  the  order  of  rescission  should  be  set  aside,  which  was 
refused,  and  thereupon  an  appeal  was  prayed,  which  professes  to  be 
an  appeal  from  the  original  order.  As  counsel  have  filed  a  written 
agreement  that  the  merits  of  the  case  only  shall  be  considered,  we 
pass  over  objections  that  might  arise  to  the  regularity  of  the  pro- 
ceedings. 

The  case  was  decided  at  last  January  term,  but  a  re-argument  was 
granted.  It  was  then  decided  that  the  sale  was  void,  because  the 
agent  had  exceeded  his  auth«jrity.  This  is  undoubtedly  so.  The 
authority  in  this  instance  was  particular  or  special,  and  recjuircd  to 
be  strictly  pursued.  If  the  agent  vary  from  an  authority  of  this  de- 
scription, his  act  is  void  as  to  his  j)rincipal.     Palcy  on  Agency,  150. 

•  2  Tart  of  the  oiiini"ii  is  lunidi-il. 


o."iS  Tin:  Ai  riiDuri'Y  (Pari  - 

Tho  ai^iMU  IkuI  no  :uitliorit\  whatovcr  to  purcltaso  any  part  of  section 
thirty-one,  aiul  the  principal  was  cntitK'd  to  lia\o  his  bonds  delivered 
up.'"''     *     *     * 

l\e\ersed  and  remanded  ior  other  reast)ns. 


SAl'Cd'KTIl'.S  .S:  X.  Y.  STI'.AMBOAT  CO.  v.  MTLLKR. 

iSupivmo  Court  of  .W'W  York.  .XpiPi'lhitc  Divisimi,   I'.XfJ.     70  App.  Div.   KM,  7S 

X.  V.  Supp.    ir.l.) 

Action  to  recover  charges  for  carrying  horses,  carriages,  and  bag- 
gage of  defendant  between  his  residences  at  Rhinecliff  and  at  New- 
port. Dcfenchint  hatl  directed  his  head  coachman  to  have  them  trans- 
ported, and  had  given  liini  the  money  to  pay  the  expenses,  but  the 
coachman  liad  it  charged  to  defendant.     ', 

Smith,  j.     In  Mechem.  Ag.  §  363,  th^  right  of  an  agent  to  pledge 
the  credit  of  his  principal  is  thus  stated 
chase  goods    for  his  principal,   and  who 

that  purpose,  has  no  implied  authority  to 'bind  his  principal  by  a  pur 

•  chase  on  credit ;  and  in  such  a  case  the  principal  will  not  be  bound  by 

a  purchase  on  credit,  although  the  goods  come  in  fact  to  his  use,  unless 

he  has  knowledge  of  the  fact,  and  does  something  in  ratification  of  it. 

'''-'X  or  unless  it  be  shown  that  it  is  the  custom  of  the  trade  to  buy  on 

V^redit."' ■"■' \ 

In  Broois  v.  Mortimer.  10  App.  Div.  518.  42  N.  Y.  vSupp.  299,  the 

opinion,  in  part,  reads:  "In  orde'r  to  uphold  this  position,  we  must  es- 

/■   tabli.-h  it/as  a  rule  of  law  that  thi  mere  relation  of  master  and  servant 

/      implies''a  right  in  the  servant  to  lise  the  credit  of  the  master  to  obtain 


'An  agent  authorized  to  pur- 
lis   su])plied   with    funds   for 


f^ 


J 


■i  Authority  to  bu.v  cannot  be  interred  from  mere  autliority  to  sell,  for  the 
acts  are  so  distinct  in  nature  that  neither  is  in  general  dependent  upon  nor 
incidental  to  the  other.  Keyes  v.  F.  P.  Tea  Co.,  81  Vt.  420,  71  Atl.  201  (1008). 
I  It  would  be  a  startling  rule  of  law  that  an  agent,  specially  emi)l()yed  to  sell 
'  his  princiiial's  wares,  can  bind  his  principal  l)y  buying  from  third  persons  on 
his  principal's  account.  Finance  Co.  v.  Old  Pittsburgh  Coal  Co.,  05  iNIinn.  442, 
1,08  X.  W.  70  (1800). 

An  agent  to  manage  a  beer  bu.siness  has  no  authority  to  buy  whisky.  Hack- 
ett  V.  A'an  Frank.  105  .AIo.  App.  .'{84,  70  S.  AY.  101:5  (1904).  One  employed  to 
manage  a  business  in  the  manufacture  and  sale  of  logs  and  lumber  may  hire 
men,  mills,  and  vessels,  but  not  imrchase  mills,  fixtures,  and  make  i)ernianent 
improvements.  Holmes  v.  Morse,  50  Me.  102  (1802).  One  authorized  to  em- 
ploy, pay,  and  discharge  farm  laborers  is  not  authorized  to  purchase  goods 
on  credit,  not  even  clothing  for  the  men  employed  on  the  farm.  Carter  v. 
Burnham.  VA  Ark.  212  (1870). 

The  opinions  of  Clayton  and  Thacher,  .J.7.,  are  omitted. 

.5  4  When  the  principal  has  put  the  agent  in  funds,  and  the  third  person  ac- 
cepts as  part  payment  the  agent's  check,  he  cannot  look  to  the  principal  to 
make  good  the  amount,  for  he  must  be  deemed  to  have  accepted  the  respon- 
sibility of  the  agent  instead  of  the  principal.  Cleveland  y.  Pearl,  o:>  Y't.  127, 
21  Atl.  201,  25  Am.  St.  Hep.  748  (1800).  For  further  extensions  of  the  prin- 
ciple, see  Bohart  v.  Olierne,  HO  Kan.  284,  V.\  Pac.  :{88  (18S7);  Cochran  v.  Rich- 
ardson, 33  Yt.  1<;0  (ISOO):  Komorowski  v.  Krumdick.  .50  Wis.  2;{.  13  X.  AY.. 
■SM  (1882). 


I/U'j 

Ch.  1)  NATURE    AND    EXTENT  359       \ 


ii/i 


such  articles  as  the  servant  uses  in  the  performance  of  his  duties,  and 
that,  where  the  articles  are  furnished  to  the  servant  and  used  by  the  j  / 
master,  an  obligation  is  created  upon  the  master's  part  to  pay  therefor ; 
and  this  without  regard  to  the  limitations  which  the  master  may  have 
imposed  upon  the  servant,  or  the  provisions  which  he  may  have  madj 
to  provide  the  servant  with  supplies  he  is  required  to  use.  We  b^ii€ve 
that  the  doctrine  of  implied  liability  has  never  been  carried  tMs  far. 
It  has  never  been  held,  so  far  as  we  are  aware,  that  the  mere  relation 
of  master  and  servant  created  in  the  servant  the  right  to  use  the  credit 
of  the  master,  and  impose  liability  upon  him.  *  *  *  If,  however, 
Mathieu  is  treated  as  the  agent  of  the  defendant  for  the  purpose  of 
purchasing  supplies  for  his  household,  the  result  would  not  be  differ- 
ent. It  is  settled  that  an  agent  may  not  buy  on  credit,  and  charge  the 
principal,  where  the  latter  has  furnished  funds  with  which  to  buy. 
Laing  V.  Butler,  37  Hun,  144,  affirmed  in  108  N.  Y.  637,  15  N.  E.  442; 
Komorowski  v.  Krumdick,  56  Wis.  23,  13  N.  W.  881 ;  Mechem,  Ag. 
§  363."    See,  also,  Jaques  v.  Todd,  3  Wend.  83. 

This  rule  of  law  is  a  salutary  one,  and  seems  to  be  necessary  for  the 
protection  of  principals  against  the  fraudulent  acts  of  their  agents. 
The  seller  can  always  protect  himself  by  demanding  cash  or  proof  of 
authority  to  purchase  upon  credit.  With  any  other  rule,  the  prin- 
cipal is  powerless  to  protect  himself  against  the  fraud  of  an  agent, 
who  may,  under  the  rule  as  held  below,  squander  the  funds  intrusted 
to  him,  and  pledge  the  credit  of  the  principal  for  the  purchase  made. 
If  the  principal  seeks  to  protect  himself  by  requiring  all  authorized 
purchases  of  his  agent  to  be  made  upon  credit,  and  advancing  no  funds 
therefor,  he  then  renders  himself  liable  for  unauthorized  purchases 
made  upon  his  credit.  It  is  a  well-recognized  rule  of  law  that,  if  a 
principal  authorize  the  agent  to  pledge  his  credit  for  property  or  serv- 
ices which  he  is  authorized  to  procure,  he  gives  to  him  an  implied  au- 
thority to  pledge  his  credit  for  whatsoever  he  may  purchase,  though 
unauthorized,  if  it  be  within  the  .scope  of  his  agency.  Tiie  principal 
could  only  protect  himself  by  personally  superintending  all  purchases. 
This,  of  course,  is  impossible.  The  strict  limitation  of  an  agent's  jiow- 
er  to  pledge  the  credit  of  the  principal  is  an  essential  safeguard  to 
large  commercial  transactions  which  must  be  conducted  through  agents. 
It  is  a  limitation  of  which  the  law  gives  notice  to  all  persons  dealing 
with  agents. 

I  am  unable  to  see  any  distinction  in  principle  between  the  i)urchase 
of  property  on  credit  and  the  purchase  of  service  upon  credit.  If  there 
be  no  implied  authority  from  the  fact  of  agency  in  an  agent  to  pledge 
the  credit  «jf  his  princijjal  for  pro])crty  ])urcliased  and  used  by  the  ])rin- 
cipal,  I  am  unable  to  see  why  there  .should  be  any  im])licd  authority 
in  the  agent  from  the  mere  fact  of  agency  to  jiledge  the  credit  of  his 
principal  for  services  rendered.  This.  ])IaintilT  could  have  |)rotectcd 
himself  by  demanding  cash  for  the  transportation,  and  could  even  have 
enff)rccd  that  demand  by  asserting  its  lien.     This  is  not  a  case  where 


.'?G0  TiiK  Ariiu^KiTY  (Part  2 

one  of  two  innocent  parties  must  sulYcr.  Tf  tliorc  be  no  implied  au- 
thority in  the  agent  from  the  mere  fact  of  ai;\MU-y  to  pledge  the  credit 
of  his  principal,  the  plaintitT  was  not  an  innocent  jxarty  in  giving  that 
credit.  'I'he  rule  is  untiucstioncil  that  an  a^ent  may  charge  his  princi- 
pal not  only  within  his  actual  authority,  hut  within  his  apparent  au- 
thority ;  but  there  is  no  apparent  authority  to  pledge  the  credit  of  the 
principal  from  the  mere  fact  of  agency.  It  is  not  claimed  that  there 
are  any  surrounding  circumstances  here  from  which  such  apparent 
authority  could  be  found,  except  that  Council  was  acting  confessedly 
and  openly  as  the  agent  of  the  defendant  in  contracting  for  this  trans- 
portation. There  is  evidence  to  the  effect  that  property  had  thereto- 
fore been  transported,  and  a  bill  afterwards  paid  by  Connell,  the  coach- 
man. There  is  no  evidence  that  this  fact  was  known  to  the  defendant. 
In  fact,  the  proof  is  to  the  contrary.  Upon  the  evidence,  it  stands  un- 
contradicted that,  at  all  times  when  transportation  was  contracted  for 
by  Connell,  he  had  in  his  possession  funds  from  the  defendant  to  pay 
therefor. 

The  question  here  raised  is  an  important  one,  and  cannot  be  in- 
fluenced by  any  apparent  hardship  to  the  plaintiff.  I  am  unable  to  see 
any  principle  of  law  upon  which  the  defendant  can  be  held  liable.  The 
judgment  should  be  reversed. 

Judgment  reversed,  and  new  trial  granted,  with  costs  to  appellant  to 
abide  event. 


SPRAGUE  V.  GILLETT. 

(Supreme  Judicial  Court  of  Massachusetts,  1845.    9  Mete.  91.) 

Wilde,  J.  This  is  an  action  of  assumpsit  for  the  price  of  a  quan- 
tity of  cordage  purchased  of  the  plaintiffs  by  the  defendants'  agent; 
and  the  defence  is,  that  the  agent  was  not  authorized  to  make  the  pur- 
chase on  a  credit.  That  he  was  not  in  terms  expressly  so  authorized 
is  admitted ;  but  he  was  authorized  to  make  the  purchase,  and  no  funds 
were  advanced  to  him,  to  enable  him  to  purchase  for  cash.^^  This,  by 
implication,  unquestionably  authorized  him  to  make  the  purchase  on 
the  defendants'  credit.  When  an  agent  is  authorized  to  do  an  act  for 
his  employer,  all  the  means  necessary  for  the  accomplishment  of  the 
act  are  impliedly  included  in  the  authority,  unless  the  agent  be  in  some 
particular  expressly  restricted.  Thus,  if  an  agent  is  employed  to  pro- 
cure a  note  or  bill  to  be  discounted,  he  may,  unless  expressly  restricted, 

5  5  Tlie  fact  that  the  principal  did  not  at  all  times  furnish  the  awnt  money 
to  pay  for  goods  he  was  authorized  to  purchase  may  make  him  liaMe  on  pur- 
chases for  which  he  did  put  the  agent  in  funds.  See  Spear  &  Tietjen  Supply 
Co.  V.  Van  Kiper  (D.  C.)  lO.'i  Fed.  GS9  (1900).  The  effect  of  the  acceptance 
and  use  by  the  principal  of  the  property  purchased  on  credit  by  the  agent  is 
well  brought  out  in  Brittain  v.  Westall,  137  N.  C.  ?.0,  49  S.  E.  54  (1904).  The 
court  gives  a  valuable  notice  of  leading  cases  on  the  subject,  including  I'atton 
V,  Brittain,  32  N.  C.  (10  Ired.)  8  (184S),  and  Komorowski  v.  Krumdick,  5G  Wis. 
23,  13  N.  W.  881  (1882j,  which  may  be  compared  with  advantage. 


Ch.  1)  NATURE    AND    EXTENT  361 

indoise  it  in  the  name  of  his  employer,  and  thereby  bind  him.  So  an 
authority  to  a  broker  to  effect  a  policy  will  authorize  him  to  adjust  a 
loss  under  the  policy.  Story  on  Agency,  §§  58-60;  Richardson  v. 
Anderson,  1  Campb.  43,  note.  \\'ithout  doubt,  therefore,  the  defend- 
ants' agent  was  authorized  to  purchase  on  credit,  and  to  bind  the  de- 
fendants to  pay  the  purchase  money.  This  authority  is  necessarily 
implied  from  the  admitted  fact,  that  the  agent  was  not  furnished  with 
any  funds  wherewith  to  pay  the  purchase  money ;  and  certainly  he 
was  not  bound  to  advance  his  own  funds,  nor  to  become  chargeable 
himself. 

It  has  been  objected,  that  a  longer  time  of  credit  was  allowed  than 
was  usual  in  like  purchases,  and  that  the  defendants  were  thereby  led 
to  believe  that  their  agent  had  paid  for  the  cordage,  and  that,  about 
two  months  after  the  purchase,  they  paid  him  the  amount.  There  is 
no  foundation  for  this  objection.  It  is  not  admitted  by  the  plaintiffs 
that  six  months  was  an  unusually  long  credit  in  like  purchases ;  nor 
would  it  be  material,  if  it  were  admitted.  The  plaintiffs  are  not 
responsible  for  the  misconduct  of  the  defendants'  agent.  If  the  de- 
fendants have  been  deceived  by  him,  their  remedy  is  against  him. 
That  can  be  no  defence  in  this  action.  It  is  not  material  whether  the 
agent  was  authorized  to  give  a  note  in  the  defendants'  names;  for, 
whether  he  was  or  not,  the  defendants  are  liable  in  this  action. 

Exceptions  overruled. 


MOREY  V.  WEBB. 

(Court  of  Appeals  of  New  York,  1874.     58  N.  Y.  .350.) 
Action  for  balance  alleged  to  be  due  for  cheese  sold  and  delivered  to 
defendants.     The  agent  had  been  provided  with  funds  to  pay  for  the 
same,  but  had  converted  them  to  his  own  use. 

Rapai.lo,  J.  According  to  the  course  of  dealing  between  these 
parties,  the  shipment  of  the  cheese  bought  by  Chapman  for  Webb, 
Turner  &  Co.  usually,  if  not  invariably,  preceded  the  payment  of  the 
price.  No  notice  to  the  plaintiff  was  shown  that  Chapman's  authority 
was  limited  to  purchases  for  cash  on  delivery.  On  the  contrary,  the 
plaintiff  testified  that  he  had  no  knowledge  of  any  such  restriction. 
Chapman  was  introduced  to  him  by  one  of  the  defendants'  firm,  as 
authorized  to  purchase  cheese  for  them.  With  defendants'  knowledge 
he  put  up  a  sign  as  agent  for  them.  His  dealings  as  such  agent  were 
numerous  and  extensive.  The  cheese  was  delivered,  marked  and 
shii)pcd  to  the  defcnrlants  according  to  Chapman's  directions,  and  reg- 
ularly paid  for  at  a  subsequent  time,  with  the  exception  of  the  three 
lots  now  in  controversy. 

We  see  no  ground  upon  which  the  judgment  should  be  disturbed. 
Judgment  affirmed,  with  costs."' 

6«  Sc'f.  Hlso,  LMrivcp  V.  A'llcarn.  207  MnHs.  2SS,  m  N.  E.  70.'',  (10]  1),  In  wlildi 
the  pilnciital  furni.slied  tlie  agent  money  at  stated  intervals. 


;>G3  Tin:  al  ihokity  (Part  2 

11.    Tl)    SKI.T.    ri:uS()\AT,    PuOlTvUTY 

(A)   In    General 
PEERLESS  MACHINE  CO.  v.  CATES. 

(Siii>ivuH'  Court  of  Miniu'sota.  1805.    (51   .Minn.  ILM,  <i;{  N.  W.  200.) 

Ca.ntv,  J."^  This  is  an  action  of  rc])lcvin,  for  the  recovery  of  the 
possession  of  a  threshing  i-nachine.  Both  parties  claim  title  from  the 
same  vendor — the  Geiser  Manufacturing  Company.  Plaintiff  claims 
that  it  purchased  the  machine  from  the  Geiser  Company  July  17, 
1892.  and  defendant  claims  that  he  purchased  it  from  the  Geiser  Com- 
pany, and  took  possession  of  it,  prior  to  that  time,  to  wit,  in  October. 
1891.  On  the  trial,  defendant  had  a  verdict,  and  from  an  order  de- 
nying its  motion  for  a  new  trial  plaintiff  appeals. 

1.  There  is  evidence  tending  to  prove  that  defendant  got  the  ma- 
chine from  the  Geiser  Company  for  the  purpose  of  putting  it  on  trial, 
and  introducing  this  class  of  machines  among  the  farmers.  However, 
both  parties  agree  that  defendant  first  took  the  machine  on  trial  at 
the  agreed  price  of  $480,  and  that  after  trial  he  refused  to  accept  it. 
Defendant  claims  that  after  this  he  purchased  the  machine  from  the 
Geiser  Company,  through  one  Lyttle,  who  he  claims  was  its  agent, 
for  the  price  of  $240,  from  which  was  to  be  deducted  a  discount  of 
$50.  and  also  $30  which  he  had  paid  for  freight.  Plaintiff  denies 
this,  and  claims  that  there  is  no  evidence  that  Lyttle  had  any  author- 
ity from  the  Geiser  Company  to  sell  the  machine,  and  therefore  no 
evidence  to  sustain  the  verdict.  The  evidence  of  his  authority  is  cer- 
tainly not  very  satisfactory.  However,  plaintiff  introduced  evidence 
tending  to  prove  that  one  Bell  was  the  "traveling  agent"  of  the  Geiser 
Company,  and  defendant  testified  that,  in  the  presence  of  Bell,  Lyttle 
represented  to  plaintiff  that  "he  was  the  agent  for  the  company,  and 
had  full  control  in  this  part  of  the  country."  We  are  of  the  opinion 
that,  under  all  the  circumstances  of  the  case,  the  question  of  Lyttle's 
authority  was  for  the  jury.     *     *     * 

5.  Several  parts  of  the  charge  are  excepted  to.  The  court  charged 
the  jury  as  follows :  "The  court  charges  you  that  the  possession  of 
the  property  by  a  man  is  presumptive  evidence  of  ownership — pre- 
sumptive evidence  of  the  right  to  sell  it;  and  there  is  only  one  place 
where  such  a  thing  can  be  questioned,  and  that  is  where  the  property 
has  been  stolen,  and  there  is  no  such  claim  here.  Consequently,  the 
property  being  in  possession  of  Lyttle,  he  had  a  right  to  sell  or  dis- 
pose of  it."  "Plaintiff  asks  for  certain  instructions:  *  *  *  Sec- 
ond. 'That  it  is  the  duty  of  the  party  who  deals  with  one  not  a  gen- 
eral agent  to  inquire  into  the  nature  and  extent  of  his  agency,  and 

•""  Tart  of  the  opinion  is  omitted. 


Ch.  1) 


NATURE    AND    EXTENT 


(jul 


3G3 


to  deal  with  the  agent  accordingly.'  This  the  court  gives  to  you,  with 
this  modification :  that  where  the  party  represents  himself  to  be  an 
agent,  and  has  the  property  sought  to  be  disposed  of  in  his  possession, 
that  the  rule  is  entirely  altered.  Third.  'That  no  man  has  a  right,  in 
dealing  with  an  agent,  to  rely  upon  his  own  statements  as  to  his  au- 
thority.' The  court  gives  you  that,  with  the  same  modifications  just 
stated.  Fourth.  'You  are  instructed  that  the  defendant  has  no  right 
to  rely  upon  the  declarations  of  Lyttle  as  to  his  agency."  This  the 
court  gives  you,  with  the  same  modification :  that,  if  he  had  made  this 
statement  about  any  other  property  than  that  which  he  had  in  his 
possession,  it  would  have  been  good  law ;  but,  with  the  property  in 
his  hand  and  possession,  the  rule  is  otherwise.  Fifth.  'You  are  in- 
structed that  if  the  agent  of  the  Geiser  Company,  Lyttle,  was  only  a 
special  agent,  in  dealing  with  him  it  was  incumbent  upon  Gates 
to  inquire  into  Lyttle's  authority,  and  not  rely  upon  his  own  declara- 
tions and  acts.'  This  the  court  gives  you,  with  the  modifications  stated 
before." 

From  this  it  will  be  seen  that  the  trial  court  held,  as  a  question  of 
law,  that  Lyttle  was  in  possession  of  the  machine  when  he  sold  it  to 
defendant,  while  there  is  hardly  a  shadow  of  evidence  in  the  case 
tending  to  show  that  he  ever  was  even  in  apparent  possession  of  the 
machine.  But,  even  if  he  was  in  possession  of  it,  his  possession  was 
the  possession  of  his  principal.  None  of  the  indicia  of  ownership 
was  given  to  him.  He  did  not  pretend  to  be  the  owner  of  the  prop- 
erty, and  his  apparent  possession  of  it  was  not  evidence  of  his  au- 
thority to  sell  it.  Even  if  Lyttle,  having  such  possession,  had  rep- 
resented himself  to  be  the  owner  of  the  property,  and  had  sold  it  as 
such  owner,  the  purchaser  would  have  no  title,  even  though  there 
was  apparently  nothing  to  put  him  on  his  guard.  Greene  v.  Docken- 
dorf.  13  Minn.  70  (Gil.  66). 

This  disposes  of  all  the  questions  raised  having  any  merit.  The 
order  appealed  from  is  reversed,  and  a  new  trial  granted. 


^. 


'-< 


COVILL  V.  HILL.''" 

(SnproniP  Citurt  of  N<'\v   York,   IMT.     4  Donln.  .'',2n.)^i> 

Trover  for  white  pine  lumber,  shipped,  according  to  the  bill  of 
lading,  "for  .Miles  Covill,"  by  one  Potter,  to  defendants  for  sale.  No 
bill  of  lading  was  sent  to  defendants.     Covill  had  a  written  contract 

n«  Approved  In  Kdwiirds  v.  Doolcy,  I'JO  N.  Y.  540,  1!4  N.  V..  SL'7  (IS'.IO).  Sco, 
nlso,  .loliiison  V.  Krisliif,  !.'!»  Md.  TtJ.  !H!  Am.  IK'O.  HOS  (ISCS).  Merc  possession 
snid  control  is  entirely  consistent  wltli  tlie  lehition  of  princiiiMl  inid  a«ent. 
\Vils(.n  V.  Loeli,  (,'.»  III."  Ap|..  4  I'.  (IS'.K'.). 

•'.'•.See  1  N.  Y.  Wl'l  (1.S4S).  In  wliicli  tlie  ( "onrt  of  Api»enls  onlererl  tlie  eiise 
lijuk  for  a  new  triiii.  on  the  ground  tliat  tlie  fiiets  neeessiiry  to  constitnte  a 
eoiiversioii  h::d   not    I  ei-n  shown.  ' 


.'?64  Tin-:  ArTiioiarv  (Part  2 

wiih  Potter  that  the  lumber  sluniKl  ho  shipped  by  Potter,  as  the  agent 
ami  in  the  name  of  the  i^lainlilY,  title  to  remain  in  plaintilT  until  the 
purchase  money  was  paid.  When  plaintiff  incjuired  of  defendants 
as  to  the  lumber,  they  answered  that  Potter  was  largely  indebted  to 
them  and  they  had  given  him  credit  for  the  lumber  on  account  of 
such  indebtedness.  They  refused  to  deliver  the  lumber  unless  plain- 
tilt"  would  reimburse  them  for  the  advances  they  had  made  Potter. 
The  latter  for  many  years  had  been  in  the  lumber  business,  shipping 
to  defendants  for  sale  on  his  account  large  amounts  each  year, 

Bronson,  C.  J.""  It  is  a  principle  of  the  common  law,  which  has 
but  few  exceptions,  that  a  man  cannot  be  divested  of  his  property 
without  his  consent.  And  although  possession  is  one  of  the  most 
usual  evidences  of  title  to  personal  chattels,  yet,  as  a  general  rule, 
mere  possession  will  not  enable  a  man  to  transfer  a  better  title  than 
he  has  himself  or  than  he  has  been  authorized  by  the  owner  to  grant. 
Exceptions  in  favor  of  trade  are  allowed  in  the  case  of  money  and 
negotiable  instruments.  But  as  to  other  personal  chattels,  the  mere 
possession,  by  whatever  means  it  may  have  been  acquired,  if  there 
be  no  other  evidences  of  property,  or  authority  to  sell  from  the  true 
owner,  wall  not  enable  the  possessor  to  give  a  good  title.  In  Pic'.:ering 
V.  Busk,  15  East,  38,  ante,  p.  319,  which  is  one  of  the  strongest  cases  in 
the  books  against  the  true  owner,  the  broker  not  only  had  the  posses- 
sion of  the  hemp,  but  it  had  been  transferred  to  his  name  in  the  books 
of  the  wharfinger  by  direction  of  the  owner ;  and  from  this  evidence,  in 
connection  with  the  fact  that  it  was  the  ordinary  business  of  the  bro- 
ker to  make  sales,  an  authority  from  the  owner  to  sell  was  implied. 
So  far  has  the  rule  for  protecting  the  owner  been  carried,  that  al- 
though he  sell  and  deliver  possession  of  the  property,  if  there  be  a 
condition  that  the  title  shall  not  pass  until  the  price  is  paid,  the  volun- 
tary assignee  of  the  purchaser  wall  acquire  no  right  as  against  the 
owner.  Haggerty  v.  Palmer,  6  John.  Ch.  437.  Nor  will  the  creditors 
of  the  vendee  acquire  any  such  right,  by  receiving  the  property  on 
account  of  their  debts,  or  taking  it  by  virtue  of  their  executions  or 
attachments.  Strong  v.  Taylor,  2  Hill,  326;  Hussey  v.  Thornton, 
4  Mass.  405,  3  Am.  Dec.  224;  Marston  v.  Baldwin,  17  Mass.  606; 
Barrett  v.  Pritchard,  2  Pick.  512,  13  Am.  Dec.  449.  And  see  Root  v. 
French,  13  Wend.  570,  28  Am.  Dec.  482.  But  in  the  case  of  a  con- 
ditional sale,  with  a  delivery  of  possession,  it  may  be  that  a  bona  fide 
purchaser,  who  parts  with  his  money;  or  one  who  makes  advances 
to  the  vendee  on  the  property,  trusting  to  the  credit  of  appearances, 
will  obtain  a  good  title  or  lien;  on  the  principle  which  is  sometimes 
applied,  that  when  one  of  two  innocent  persons  must  suffer  from  the 
fraud  of  a  third,  the  loss  shall  fall  on  him  who  has  enabled  such  third 
person  to  do  the  wrong.  See  IIag<,^erty  v.  Palmer,  6  John.  Ch.  437; 
Root  v.  French,  13  Wend.  570,  28  Am.  Dec.  482;  2  Kent,  497. 

««  Part  of  the  opinion  is  omitted. 


Ch.  1)  NATURE    AND    EXTENT  365 

But  it  is  not  now  necessary  to  decide  that  question ;  for  there  was 
no  conditional  sale,  nor  a  sale  of  any  kind  from  the  plaintiff  to  Pot- 
ter. The  title  was  never  to  vest  in  Potter;  but  only  in  such  persons 
as  should  purchase  from  the  defendants,  to  whom  the  lumber  was 
to  be  shipped,  and  who  were  to  sell  it  as  the  property  of  the  plaintiff, 
and  account  to  him  for  the  avails,  to  the  extent  provided  for  by  the 
contract.  The  plaintiff  was  to  hold  the  possession  as  well  as  the  title 
to  the  property  until  the  purchase  money  should  be  paid.  And  al- 
though Potter  was  to  ship  the  lumber  to  the  defendants,  he  was  to  do 
it  as  the  agent,  and  in  the  name  of  the  plaintiff.  The  transaction 
amounted  to  nothing  more  than  a  bailment  of  the  lumber  to  Potter 
for  the  purpose  of  forwarding  it  to  the  defendants  to  be  sold,  with 
an  interest  in  the  bailee  as  to  all  which  the  property  might  bring  be- 
yond the  specified  sum  of  $8.25  per  thousand  feet.  Potter  had  no 
more  power  over  the  property  as  against  the  plaintiff,  than  though  he 
had  received  it  as  a  common  carrier  for  hire,  and  without  any  other 
interest;  nor  did  the  plaintiff  do  any  thing  which  was  more  likely  to 
mislead  third  persons,  than  though  he  had  delivered  the  property  to 
Potter  as  such  common  carrier.  And  it  hardly  need  be  said,  that  a 
mere  bailee  can  neither  give  a  good  title,  nor  create  a  valid  lien  as 
against  the  true  owner.     *     *     * 

Judgment  for  the  plaintiff. 


HEATH  V.  STODDARD. 
(Supreme  Judicial  Court  of  Maine,  1898.    91  Me.  499,  40  Atl.  547.) 

WiswULL,  J.  Replevin  for  a  piano.  The  piano  was  at  one  time 
the  property  of  the  plaintiff,  who  intrusted  it  to  one  Spencer  for  the 
purpose  of  taking  it  to,  and  leaving  it  at,  tiic  house  of  the  defendant, 
but  without  any  authority,  as  the  plaintiff  claims  and  as  has  been  found 
by  the  jury,  to  sell  the  piano  or  to  make  any  contract  for  its  sale ;  the 
arrangement  being,  as  the  plaintiff  claims,  that  Spencer  should  merely 
take  it  to  and  leave  it  at  the  defendant's  h(iuse,  and  that  a  day  or  two 
later  the  plaintiff  would  go  there  and  make  a  sale  of  it  if  he  could. 

Spencer  had  the  piano  taken  to  the  defendant's  house,  but,  instead  of 
simply  leaving  it  so  that  the  plaintiff  might  subsequently  sell  it,  he 
assumed  authority  in  himself  to  sell  it  to  the  defendant,  who  bought  it 
and  paid  in  cash  and  otherwise  the  full  imrchase  price  fixed  by  Spen- 
cer, without  any  knowledge  of  his  want  of  authority. 

Spencer  was  himself  a  deak-r  in  |)ianos  and  nuisical  instruments,  and. 
upon  the  very  day  when  he  made  the  arrangement  with  the  plaintifl 
to  take  one  of  his  (plaintiff's)  pianos  to  the  defendant's  house,  he  had 
seen  the  defendant  and  attempted  to  scl^him  one  of  his  pianos. 

I'pon  the  question  of  Spencer's  authority  as  an  agent  the  presiding 
justice  instructed  the  jury  as  follows:/  "The  mere  fact  that  S])enctr 
had  possession  of  that  piano  and  soldit  to  the  defendant,  even  as  the 


•  >'><)  Tin-:  Ai  riioKiTY  (Part  2 

(Ictondaiit  says.  TTcatli's  iiaim-  not  ]ia\in<;  been  nu-ntioiu'd  to  Iho  dc- 
toiulaiit.  would  not  necessarily  i;ivc  a  title  to  the  defendant.  To  illns- 
irato:  Suppose  you  are  a  livery  stabli'  kei'per,  and  you  let  a  man  have 
a  horse  to  go  from  here  to  Portland.  \'ou  let  him  have  that  horse, 
hut  it  is  for  a  special  ])urpose — to  i^o  from  here  to  Portland,  lie 
lueets  a  uiau  on  the  road,  and  asks  him  what  he  will  j.;ive  him  for  the 
luirse.  and  they  dicker,  and  iinally  the  man  whom  he  meets  buys  that 
horse  for  $125.  ^'ou  do  not  suppose  that  would  divest  you  of  the 
title  as  a  livery  stable  keeper,  because  you  never  have  given  authority 
to  that  man  to  sell  ?  You  gave  authority  to  that  man  to  drive  to 
Portland  and  back,  and  if  any  man  was  foolish  enough  to  buy  that 
horse  of  that  man  he  will  have  to  stand  his  chances.  I  give  you  this 
as  an  illustration.  It  may  be  an  extreme  illustration.  Now,  if  a  party 
allows  another  to  take  a  piano,  and  go  into  the  country  to  leave  it, 
and  that  party  who  takes  it  sells  it.  and  there  is  not  any  authority  for 
that  sale,  then  whoever  purchases  it  in  the  country,  or  wherever  it  is 
left,  or  on  the  way,  can  obtain  no  greater  title  than  the  party  has  who 
sells  it.  So,  it  comes  back  to  the  question  of  whether  this  man  Heath, 
the  plaintiff  in  this  case,  ever  authorized  Spencer  to  so  deal  with  that 
property,  in  the  way  of  a  sale  of  it,  as  to  constitute  him  an  agent  for 
that  purpose." 

While  these  instructions  were  technically  correct,  so  far  as  they  go, 
we  do  not  think  that  they  were  adequate,  in  view  of  the  defendant's 
position,  and  we  fear  that  the  illustration  given  was  so  extreme  as  to 
j^  misleading.  ^_ 

/  A  principal  is  not  only  bound  by  the  acts  of  his  agent,  whether 
/  general  or  special,  within  the  authority  which  he  has  actually  given 
him,  but  he  is  also  bound  by  his  agent's  acts  within  the  apparent  au- 
thority which  the  principal  himself  knowingly  permits  his  agent  to 
assume,  or  which  he  holds  the  agent  out  to  the  public  as  possessing. 
1  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  p.  969,  and  cases  cited. 

Whether  or  not  a  principal  is  bound  by  the  acts  of  his  agent,  when 
--pealing  with  a  third  person  who  does  not  know  the  extent  of  his 
authority,  depends,  not  so  much  upon  the  actual  authority  given  or 
intended  to  be  given  by  the  principal,  as  upon  the  question,  what  did 
such  third  person,  dealing  with  the  agent,  believe,  and  have  a  right 
to  believe,  as  to  the  agent's  authoritv  from  the  acts  of  the  principal? 
Griggs  v.  Selden,  58  Vt.  561,  5  Atl.  504;  Towle  v.  Leavitt,  23  N.  H. 
360,  55  Am.  Dec.  195 ;    Walsh  v.  Insurance  Co.,  7Z  N.  Y.  5. 

For  instance,  if  a  person  should  send  a  commodity  to  a  store  or 
warehouse  where  it  is  the  ordinary  business  to  sell  articles  of  the  same 
nature,  would  not  a  jury  be  justified  in  coming  to  the  conclusion 
that,  at  least,  the  owner  had  by  his  own  act  invested  the  person  with 
whom  the  article  was  intrusted  with  an  ap])arent  authority  which 
would  protect  an  innocent  purchaser? 

In  Pickering  v.  Busk,  15  East,  43,  ante,  p.  319,  quoted  by  Mellen,  C. 
J.,  in  Parsons  v.  Webb,  8  Me.  38,  22  Am.  Dec.  220,  Lord  Ellenborough 


Ch.  1), 


NATURE    AND    EXTENT 


361 


says  :f  "Where  the  commo^lity  is  sent  in  such  a  way,  and  to  such  a  place, 
as  to^exhibit  an  apparent  purpose  of  sale,  the  principal  will  be  bound 
and  the  purchaser  safe." 

Let  us  apply  this  priiiciple  to  the  present  case.  Spencer  was  a 
dealer  in  pianos.  Immediately  before  this  transaction  he  had  been 
trying  to  sell  a  piang/to  the  defendant.  There  was  evidence  tending 
to  show  that  the  plaintiff  knew  these  facts.  With  this  knowledge,  he 
intrusted  the  possession  of  this  piano  with  Spencer  for  the  purpose  of 
its  being  taken  by  Spencer  to  the  defendant's  house  w^ith  a  view  to 
its  sale.  Spencer  was  not  acting  merely  as  a  bailee.  He  did  not 
personally  take  the  piano  to  the  defendant's  house,  but  had  it  done  by 
a  truckman  or  expressman.  Spencer  was  employed  for  some  other 
purpose.  Whatever  may  have  been  the  private  arrangement  between 
the  plaintiff  and  Spencer  or  the  limit  of  authority  given  by  the  plain- 
tiff, would  not  a  jury  have  been  warranted  in  coming  to  the  conclu- 
sion that  the  purchaser  was  justified  in  believing,  in  vkw  of  all  of 
these  facts,  that  Spencer  had  authority  to  sell,  and  tyf  the  plaintiff 
knowingly  placed  Spencer  in  a  position  where  he  coild  assume  this 
apparent  authority,  to  the  injury  of  the  defendant?!  We  think  that 
a  jury  might  have  properly  come  to  such  a  confclusicli,  and  that  con- 
sequently the  instructions  were  inadequate  in  this  respect:  that  it 
was  nowhere  explained  to  the  jury  that  a  principal  might  be  bound 
by  the  acts  of  an  agent,  not  within  his  actual  authority,  but  within 
the  apparent  authority  which  the  principal  had  knowingly  and  by  his 
own  acts  permitted  the  agent  to  assume 

Exceptions  sustained. 


CLOUGH  v.  WHITCOMr.. 
(Supreme  Judicial  Court  of  Massachusetts,  LSTO.     105  ilass.  482.) 

Contract  on  an  account  annexed  for  the  price  of  goods  sold  and 
delivered  by  plaintiff  to  defendant  on  an  order  taken  by  one  Clark, 
traveling  pedler.  Clark  had  agreed  to  accept  from  defendant  goods 
in  exchange  for  the  goods  so  ordered.  The  case  came  up  on  excep- 
tions by  plaintiff  to  '^harges  of  the  court. 

Wkij.S,  J.  It  appears  by  these  excej)tions  that  the  goods  in  ques- 
tion  were  delivered  to  the  defendant   by  the   plaintiff,   directly;    and 

11  In  L<'i«lj  V.  Mol)il<'  &  Ohio  It.  Co..  r,H  Ala.  1('..">  (1S77),  is  a  fiill  and  discrliu- 
liiatiim  discussion  of  tlif  cxccplioiis  to  the  Mia.xlin  of  the  law  <if  sales,  n(  inn 
diit  i/iioil  lion  litihct,  iiicludliii;  the  case  of  the  a;:eiit  who  is  liilrusled  with 
possession  of  his  principal's  property,  and  witli  tlie  indi.ia  of  ownersliiii,  or 
of  aiitliority  to  sell.  Su<h  was  the  case  in  C<dnn)lius  !'.n^;,'y  Co.  v.  'I'liilcy.  7.5 
Miss.  'i-2'.K  i;»  Soulli.  L'.'il.'.  .".L'  I'.  It.  A.  L'tiO.  .">."  Am.  .^1.  Itep.  ."i.".(>  (is;).-,),  w  lieie 
the  jiioi.rietor  of  a  livery  and  i^ale  stalle  was  lntnis|c<l  witli  <-:irria^('s  for 
sale,  which  he  wroimfiilly  sold  for  his  own  dehls.  Compare  Towle  v.  l-eavitt, 
u:'.  .\.  11.  :;<;0.  ,"»  .\m.  I)ec.  ^'.)r,  (is.'il).  in  wi)icli  a  carriaue  was  left  for  re|iair 
with  a  carriage  malver.  and  hy  him  sold  contrary  to  inslrndions.  See.  also. 
Tarry  Mf^'.  Co.  v.  Lowtiiln-ru'.  •'^>>  Miss.  .'>.".L'.  41  South.  (;.">  (UXMl):  Cilman  Oil 
Co.  V    .Norton.  Ml  Juwa,   i::i.  r>r,  N.  W.  W.',,  »S  Am.  St.  \W]>.  !(«»  (IMi::). 


;>1>S  TiiK  At-riiouiTY  (Part  2 

not  through  Clark,  llio  alU-gcd  a:4ont.  Thov  were  so  delivered  upon 
written  orders,  signed  hy  ihe  defendant,  addressed  to  the  plaintiff, 
and  giving  the  deseription.  quantity  and  priees  of  the  goods  desired. 
These  onlers  were  solieited  and  forwarded  by  Clark,  who  was  the 
plaintiff's  agent  for  that  purpose  and  was  to  have  a  commission  upon 
sales  so  made.  Whether  he  was  authorized  to  make  contracts  of  sale 
and  to  receive  payments  or  to  make  agreements  as  to  the  mode  of 
]iayment  was  in  dispute  upon  the  conilicting  testimony  of  the  i)ar- 
ties.  Unless  he  had  such  authority  or  was  held  out  by  the  plaintiff 
as  having  such  authority,  his  receipt  of,  or  agreement  to  receive,  in 
payment,  other  goods,  by  way  of  barter,  would  not  bind  the  plaintiff, 
and  he  may  recover  for  the  goods  in  this  action.  Upon  the  face  of 
the  orders  upon  which  the  goods  were  delivered,  the  price  is  payable 
in  money  to  the  plaintiff. 

The  first  instruction  given  to  the  jury  seems  to  us  exceptionable, 
because  not  properly  adapted  to  the  facts  of  the  case.  There  was 
no  evidence  that  the  goods  were  delivered  to  the  defendant  by  Clark 
upon  a  contract  for  the  same  made  by  himself,  as  agent  of  the  plain- 
tiff, or  otherwise.  It  was  in  dispute  whether  the  contract  of  sale  was 
made  by  Clark,  as  agent,  or  by  the  plaintiff  directly ;  but  the  delivery, 
as  the  case  is  reported,  was  not  made  by  Clark;  and  it  was  made  by 
the  plaintiff,  not  upon  any  verbal  contract  with  Clark,  but  upon  the 
defendant's  written  order,  addressed  to  the  plaintiff  himself.  The  case 
therefore  differs  essentially  from  Brigham  v.  Palmer,  3  Allen,  450. 
The  facts  indicate  a  contract  of  purchase  and  sale  with  the  plaintiff 
directly,  and  not  with  the  agent.     Finch  v.  Mansfield,  97  Mass.  89. 

The  second  instruction  is  erroneous  in  itself.  A  commission,  al- 
lowed to  one  who  solicits  orders,  upon  sales  effected  through  such 
orders,  does  not  constitute  him  or  prove  him  to  be  an  agent  with  au- 
thority to  make  absolute  contracts  of  sale ;  °-  much  less  to  receive 
payments,  and  make  agreements  to  receive  payments  in  other  goods 
by  way  of  barter.  As  we  understand  the  instruction,  it  was  that  an 
agreement  to  give  Clark  a  commission  on  goods  sold  through  his 
solicitation  made  or  proved  him  to  be  an  agent  to  sell  said  goods. 
This  instruction,  taken  with  the  previous  one,  rendered  a  verdict  for 
the  defendant  almost  inevitable.  For  these  reasons,  a  new  trial  should 
be  had. 

There  was  evidence  tending  to  show  that,  either  by  previous  au- 
thority  or   by   subsequent   acquiescence,   the   plaintiff  sanctioned   the 

62  Compare  Le\a  v.  Booth.  .58  Md.  .'^05,  42  Am.  Rep.  r,:>,2  (1SR2),  and  Smith  v. 
Clews,  lOij  X.  Y.  2S.3,  11  N.  E.  6.32,  .59  Am.  Rep.  502  (18S7).  Certainly  one 
formerly  authorized  to  "solicit  orders"  has  no  authority  to  sell.  Abrahams 
V.  Weiller,  S7  111.  179  (1877).  Nor  can  authority  to  sell  sijecified  projierty 
confer  power  to  sell  after  acquired  property.  Union  Trust  Co.  v.  Moans,  201 
Pa.  .374.  .50  Atl.  974  (1902);  Blackmer  v.  Sunnnit  Coal  &  Mininj:  Co.,  187  111. 
32,  58  N.  E.  289  (1900).  Nor  property  of  another  kind.  .MeCord  Co.  v.  WoU- 
pett,  89  Cal.  271,  20  I'ae.  9r,9  (1S91);  Forrest  v.  Vandcrliilt,  107  Fed.  734,  40 
C.  C.  A.  Gil,  52  L.  K.  A.  473  (1901)  (agent  to  sell  yacht,  sold  launch). 


Ch.  1)  NATURE    AND    EXTENT  369 

mode  of  dealing-  adopted  by  Clark.  But  it  does  not  appear  that  the 
verdict  was  rendered  on  that  ground,  and  no  question  is  now  opei? 
before  us  in  relation  to  it.    Exceptions  sustained. 


SCUDDER  V.  ANDERSON. 

(Supreme  Court  of  Michigan,  1SS4.    54  Mich.  122,  19  N.  W.  775.) 

Campbell,  J.®^  Plaintiff,  as  vendee  of  John  Scudder,  brought  this 
action  in  trover  for  the  conversion  of  various  articles  formerly  owned 
by  the  ^Marquette  &  Pacific  Rolling-Mill  Company,  and  used  on  their 
mining   property  in   Marquette  county.     This   company   had,   up   to 

1878,  worked  an  iron  mine  on  40  acres  of  their  own,  and  an  adjoin- 
ing 40  acres  in  which  they  owned  seven  sixteenths  in  fee,  and  had 
a  lease  of  the  other  undivided  interest.  In  October,  1877,  a  levy  of 
execution  on  their  landed  mining  property  was  carried  to  a  sale,  one 
Ward  being  the  purchaser.  On  the  third  day  of  September,  1878, 
William  W.  Wheaton,  who  was  general  agent  in  charge  of  the  com- 
pany's interest,  sold  the  property  in  suit  here  to  John  Scudder,  in  pay- 
ment of  a  claim,  which  Scudder  then  held  against  the  company  for 
his  services  as  secretary,  to  the  amount  of  about  $1,800.     In  August, 

1879,  defendant,  who  was  sheriff  of  Marquette  county,  levied  on  this 
property  under  claim  of  legal  process  against  the  company,  and  sold  it. 

This  case  came  on  for  trial,  and  the  plaintiff  recovered  judgment. 
Various  errors  are  assigned,  relating  chiefly  to  questions  of  title. 
Some  other  objections  were  also  argued,  which  will  be  referred  to. 
A  point  was  made  that  sufficient  evidence  was  not  given  of  Wheaton's 
authority  to  sell.  But,  if  this  property  was  movable  property,  we  can 
see  no  reason  to  doubt  the  power  of  a  general  agent  and  manager 
to  dispose  of  it.  Purchases  and  sales  of  personalty  for  use  about  min- 
ing premises  must  be  of  frequent  occurrence,  and  would  presumably 
be  under  the  control  of  the  general  manager.^*  The  point  was  not 
strenuously  pressed.  We  think  it  was  not  well  taken.  *  ♦  *  A.f- 
firmed. 

83  Part  of  the  opinion  l.s  omitted. 

«*  Authority  to  buy  things  and  have  them  fhargcd  Is  In  no  sense  authority 
to  sell  the  principal'.s  property.  MofTot  v.  .Moffi't.  00  Iowa,  442,  57  N.  W.  054 
(IWM).  r.ut  when  an  at,'ont  l.s  put  in  su'li  a  iM)si(ion  that  a  sale  is  necessary 
to  protect  the  proi)erty,  autliorilv  to  sell  may  be  inferred.  Sherry  Lumber 
Co.  V.  Wi.s.  Cent.  K.  Co.,  37  111.  App.  50:j  (1891). 
Goi)D.l'B.&  A. — 24 


i>TO  TiiH  Aii'iioiciTY  (Part  2 

(B)   To  Make   U'anatitics 

HERRING  V.  SKA(U;S. 
(Supremo  Court  of  AlaltJima,  1S7S.     C12  Ala.  ISO,  ni  Am.  Rep.  4.) 

Action  for  damages  for  breach  of  a  warranty  by  a  sales  agent  that 
a  safe  was  burglar  proof.  The  safe  had  been  broken  open  and  rifled 
of  a  sum  of  money  and  other  valuables. 

Stone,  J.^'^  In  Skinner  v.  Gnnn,  9  Port.  305,  speaking  of  the 
power  of  an  agent  to  bind  his  principal,  this  court  said :  "The  power 
in  this  case  is  to  sell  and  convey  the  negro  in  the  name  of  the  plain- 
tiff, and  the  agent  must,  as  an  incident  of  that  power,  and  in  the  ab- 
sence of  any  prohibition,  have  the  right  to  warrant  the  soundness  of 
the  slave,  as  that  is  a  usual  and  ordinary  stipulation  in  such  contracts, 
and  must  therefore  be  implied  to  effectuate  the  object  of  the  power." 
The  court,  in  the  same  case,  had  said,  "An  authority  to  do  an  act, 
must  include  power  to  do  every  thing  usual  and  necessary  to  its  ac- 
complishment." This  doctrine  was  reafffrmed  in  Gaines  v.  McKinley, 
1  Ala.  -^^6,  and  in  Cocke  v.  Campbell,  13  Ala.  286.  It  will  be  ob- 
served that,  in  these  cases,  the  court  states,  as  matter  of  law,  that 
power  given  to  sell  a  slave  carried  with  it  power  to  warrant  his  sound- 
ness, in  the  absence  of  prohibition.  A  similar  principle  is  found  in 
the  books,  in  reference  to  the  power  of  an  agent  to  bind  his  princi- 
pal, by  warranty  of  the  soundness  of  a  horse  he  is  authorized  to  sell. 
It  is  a  "usual  and  ordinary  stipulation  in  such  contracts,"  say  the 
courts.  Perhaps  the  custom  of  such  warranties  is  so  general,  and 
has  prevailed  so  long,  that  it  has  come  to  be  treated  as  judicial  knowl- 
edge. Certainly  it  was  not  intended  to  be  affirmed,  that  an  agent  with 
general  powers  of  sale,  has  unlimited  power  to  bind  his  principal,  by 
any  and  every  stipulation  the  various  phases  of  traffic  may  be  made 
to  assume.  If  so,  the  words,  "in  the  absence  of  prohibition,"  found 
in  the  case  of  Skinner  v.  Gunn,  supra,  are  meaningless  and  powerless. 

In  the  case  of  Fisher  v.  Campbell,  9  Port.  210,  a  question  arose  on 
the  implied  power  of  an  agent  to  bind  his  principal.  That  was  the 
case  of  a  non-resident  planter,  whose  overseer  in  charge  made  pur- 
chases of  supplies  for  the  plantation  and  hands.  It  was  proved  that 
the  employer  had  given  the  overseer  instructions  to  purchase  pork 
for  his  slaves  from  a  particular  mercantile  house  at  Montgomery,  with 
whom  he  had  made  arrangements  for  that  purpose,  and  had  given 
him  no  directions  to  buy  any  where  else,  nor  had  he  any  authority 
to  purchase  from  any  other  person.  The  plantation  was  in  Lowndes 
county,  and,  the  roads  being  bad,  the  overseer  purchased  pork  in  his 
own  county,  much  nearer  to  him,  and  at  Montgomery  prices.  Com- 
menting on  a  charge  requested  by  plaintiffs,  and  refused  by  the  court 

C5  Part  of  the  opinion  is  omitted. 


/A 


Ch.  1) 


NATURE    AND    EXTENT 


;7i 


below,  this  court  said,  "The  last  branch  of  the  charge  is  stated  as  a 
corollary  from  the  preceding  propositions;  'that  any  special  direc- 
tions given  to  McMay  [the  overseer]  by  the  defendant,  as  to  the 
place  of  purchasing,  was  wholly  immaterial  as  to  this  purchase,  un- 
less from  the  evidence  they  were  satisfied  that  plaintifts  were  in- 
formed at  the  time  of  such  sale  of  such  special  directions;  and  that 
without  this  information,  the  plaintiffs  would  be  entitled  to  recover, 
if  the  proof  was  fully  made  out.'  We  understand  the  law  to  be  the 
exact  converse  of  this  proposition;  When  a  person  deals  with  one 
who  professes  to  be  the  agent  of  ainother  pei'son,  the  person  contract- 
ing with  him  is  bound  to  know  t^ie  exteq^  of  his  authority." — See, 
also,  McCrai^  v.  Slaughter,  58  Ala.  230. 

We  are  not  prepared  to  assent  to  the  ydoctrine,  in  unlimited  sense, 
that  a  general  agent  to  sell  has,  by  virtye  thereof,  the  p^wer  to  bind 
his  principal  by  every  species  of  warranty  a  purchaser  nAy  exact.  In 
Benjamin  on  Sales,  §  624,  is  the  fgdlowing  language  :f  "Warranties 
are  sometimes  given  by  agents,  without  express  authoriW  to  that  ef- 
fect. In  such  cases  the  question  arises  as  to  the  power  of  an  a^nt, 
who  is  authorized  to  sell,  to  bind,  his  principal  by  a  warranty/  The 
general  rule  is,  as  to  all  contracts  including  sales,  that  the  agent  is 
authorized  to  do  whatever  is  usual  to  carry  out  the  object  of  hi« 
agency,  and  it  is  a  question  for  the  jury  to  determine  what  is  usuajfl 
If  in  the  sale  of  the  goods  confided  to  him,  it  is  usual  in  the  mark/r 
to  give  a  warranty,  the  agent  may  give  that  warranty  in  ord^p^o 
effect  a  sale."  We  fully  approve  and  adopt  this  language  of  this  j^ry 
accurate  writer.  We  do  not  intend,  however,  to  overturn  the  doctrine 
declared  in  Skinner  v.  Gunn,  and  Cocke  v.  Campbell,  supra. /As  a 
the  agent  has  power  to  do  whatever  is  usual — 14  enter 
ress  stipulations  as  are  usual  and  customary — in  ettecting 


general  r 
into  such  e 
such  sales. 
What  sti 
is  not  alv 


lations  are  usual  and  customary  in  effecting  such  sales, 
s  matter  of  judicial  knowledge.  It  is  declared  in  the 
sales  of  slaves  and  horses  to  be  within  the  knowledge  of  the  court 
that  it  is  usual  to  give  warranties.  It  can  not  be  affirmed  that  such 
custom  exists  in  the  sale  of  all  chattels.  Generally,  and  we  hold  in  a 
sale  like  the  present,  "it  is  a  question  for  the  jury  to  determine  what  is 
usual."  This,  in  the  absence  of  express  authority  in  the  agent  to  war- 
rant;  for  if  the  agent  had  sucii  express  authority,  then  his  act  is  the 
act  of  his  principal.  And,  in  the  absence  of  express  authority,  the 
question  arises,  and  it  is  one  for  the  jury,  whether  such  warranty  is 
customary  in  the  sale  of  safes.  If  the  jury,  on  the  evidence,  find  there 
was  such  custom,  then  the  principal  is  buund,  "in  the  absence  of  pro- 
hibition" resting  on  the  agent,  and  brcnight  to  the  knowledge  of  the 
purchaser,  to  the  same  extent  as  if  the  principal  had  himself  given  the 
warranty.  On  the  other  hand,  if  there  was  no  such  authority  given, 
and  no  such  custom  found  to  exist,  then  the  principal  would  not  be 
boinid.     True,  if  the  jjrincipal  ratified  the  act  of  such  agent,  although 


^73  TOE  AUTiioitiTY  (Part  2 

tlie  act  itself  had  been  unauthorized,  this  would  bind  the  principal. 
I^ut  the  receipt  of  the  purchase  money  would  have  no  such  effect,  un- 
less received  or  retained  with  knowledge  that  the  agent  had  given 
the  warranty. 

The  sale  in  the  present  case  was  made  by  an  agent.  In  the  absence 
of  proof  of  express  authority  to  warrant,  it  was  incumbent  on  the 
plaintiff  to  show  a  custom  in  the  sale  of  safes,  to  warrant  them  as 
burglar  proof.  Either  the  express  authority,  or  the  authority  implied 
from  such  proven  custom,  would  constitute  the  act  of  the  agent  the 
act  of  the  principal ;  but  the  law  does  not  imply  the  authority  from 
the  fact  that  Stewart,  who  conducted  the  sale,  was  a  general  agent. 
The  third  count  of  the  complaint  avers  that  the  defendants  "did  em- 
ploy an  agent,  and  authorized  him  to  sell  such  safes,  and  did  hold 
him  forth  to  the  public  residing  in  and  about  the  town  of  Talladega, 
Alabama,  and  elsewhere,  as  their  general  agent  for  the  sale  of  iron 
safes."  This  is  the  entire  averment  of  authority,  and  we  hold  it  in- 
sufficient. It  should  have  been  averred  that  the  agent  had  authority 
to  make  the  warranty.  Being  averred,  proof  of  express  authority, 
or  custom  to  warrant,  would  have  sustained  the  averment."*'  The 
third  count  is  insufficient,  and  the  demurrer  to  it  should  have  been 
sustained. 

Under  the  principles  above  declared,  it  became  a  material  inquiry 
whether  Stewart  had  express  authority  to  warrant  the  safe  as  burglar- 
proof.  He  should  have  been  permitted  to  prove  he  had  not  such  ex- 
press authority.  True,  this  would  not  necessarily  exonerate  the  de- 
fendants. It  would  bear  on  only  one  phase  of  the  inquiry;  for,  if 
such  warranties  are  usual  and  customary  in  the  sale  of  iron  safes, 
then  even  a  prohibition  of  such  authority  to  the  agent  would  amount 
to  nothing,  unless  knowledge  of  such  prohibition  was  carried  home 
to  the  purchaser  before  the  sale  was  consummated.  So,  if  the  pub- 
lished descriptive  pamphlet  with  which  the  agent  was  furnished, 
tended  to  disclose  what  classes  of  safes  were,  and  what  were  not  rep- 
resented as  burglar-proof,  and  such  pamphlet  was  exhibited  to  the 
purchaser  pending  the  negotiation,  then  that  pamphlet  should  have 
been  allowed  to  go  to  the  jury,  as  shedding  some  light  on  the  contro- 
verted question  of  warranty  vel  non.     *     *     * 

For  these  and  other  reasons,  reversed  and  remanded. 

««  While  an  agent  of  a  manufacturer  may  warrant  goods  to  be  free  from 
latent  defects  due  to  the  process  of  manufacture,  and  that  they  are  suitable 
for  the  purpose  for  which  they  were  specifically  designed,  he  has  no  authority, 
in  the  absence  of  express  authority  or  usage  of  the  trade,  to  warrant  goods 
to  be  "all  wool."  Ellner  v.  Priestley,  .39  Misc.  Rep.  535,  80  N.  Y.  Supp.  871 
(1902).  Nor  does  authority  to  warrant  goods  extend  to  goods  sold  subsequent 
to  the  warranty.  Wait  v.  Borne,  123  N.  Y.  592,  25  N.  E.  1053  (1S90) ;  Ide  v. 
Brody,  150  111.  .\pp.  479  (1910). 

Three  isolated  instances  of  sales  with  warranties  made  in  three  or  four 
years  are  not  sutUcient  to  establish  a  usage  of  trade  to  warrant.  Herring  v. 
Skaggs,  73  Ala.  446  (1882). 


Ch.  1)  NATURE    AND    EXTENT  373 


BRADY  V.  TODD." 

(Court  of  Common  Pleas,  1861.     9  C.  B.  N.  S.  592,  7  Jur.  N.  S.  827,  30  L.  J. 
C.  P.  223,  4  L.  T.  Rep.  N.  S.  212,  9  W.  R.  483,  99  E.  C.  L.  592.) 

ErlE,  C.  J.  upon  this  rule  to  set  aside  the  verdict  for  the  plaintiff 
and  enter  it  for  the  defendant  on  the  plea  denying  the  warranty  of 
a  horse,  the  question  has  been  whether  the  warranty  by  the  defend- 
ant was  proved.  The  jury  have  found  that  Greig,  in  selling  the  horse 
for  the  defendant,  warranted  it  to  be  sound  and  quiet  in  harness.  The 
defendant  stated,  and  it  must  on  this  motion  be  taken  to  be  true,  that 
he  did  not  give  authority  to  Greig  to  give  any  warranty.  The  relevant 
facts  are,  that  the  plaintiff  applied  to  the  defendant,  who  is  not  a 
dealer  in  horses,  but  a  tradesman  with  a  farm,  to  sell  the  horse ;  and 
that  the  defendant  sent  his  farm-bailiff,  Greig,  with  the  horse,  to  the 
plaintiff,  and  authorized  him  to  sell  it  for  thirty  guineas. 

The  plaintiff  contends  that  an  authority  to  an  agent  to  sell  and  de- 
liver imports  an  authority  to  him  to  warrant. 

The  subject  has  been  frequently  mentioned  by  judges  and  text- 
writers  ;  but  we  cannot  find  that  the  point  has  ever  been  decided.  It 
is  therefore  necessary  to  consider  it  on  principle. 

The  general  rule,  that  the  act  of  an  agent  docs  not  bind  his  prin- 
cipal unless  it  was  within  the  authority  given  to  him,  is  clear.     But 

87  Followed  in  Cooley  v.  Perrinc.  41  N.  J.  Law,  322.  32  Am.  Rop.  210  (1879), 
in  which  it  is  said  by  the  court:  "A  sale  of  a  chattel  is  a  transfer  of  its  title 
by  the  vendor  to  the  vendee  for  a  price  paid  or  promi.sed.  1  Parsons  on  Con- 
tracts, 519.  A  direction  to  sell,  tlicivfore,  nothing  niure  appearinfr.  would 
confer  upon  a  special  agent  no  authority  beyond  that  of  agreeing  with  the 
purchaser  in  regard  to  these  component  particulars.  Under  certain  circum- 
stances a  .sale  legally  imports  more  than  the.se  particulars,  and  in  such  cases 
the  authority  iiiider  a  power  to  sell  would  be  correspondingly  enlarged.  Thus, 
if  a  .sale  be  niade  by  samiilo.  it  is  thereby  impliedly  warranted  that  the  bulk 
is  of  as  good  a  quality  as  the  sample.  Hence  it  has  been  proi)erly  held  that 
where  a  broker  was  empowered  to  sell  g(»ods  which  were  in  bulk,  and  by  the 
custom  of  brokers,  it  was  permissible  to  sell  such  goods  by  sample,  and  he 
was  not  restricted  by  his  instructions  as  to  the  mode  of  sale,  his  sale  by  sam- 
ple, and  the  warranty  of  <piallty  therein  lmi)liiMl.  were  binding  upon  his  prin- 
cipal. The  .Monte  .Vl'lcgre,  9  Wheat.  OKI.  (1  L.  Ed.  174;  Andrews  v.  Ivneeland, 
6  Cow.  :r>4;  Sehuchardt  v.  Allen,  1  Wall.  359,  17  L.  Ed.  G42.  Rut  in  a  sale 
of  a  horse,  subject  to  the  buyer's  inspection,  no  warranty  of  quality  is  im- 
plied, and  it  seems  a  short  and  clear  deduction  of  reasoning  thence  to  con- 
clude that  in  an  authority  to  malic  such  a  sale,  no  authority  so  to  warrant 
Is  inqdied.  Tlie  warranty  Is  outside  of  the  sale,  and  he  who  is  enq»owered  to 
make  tin,'  warranty  nuist  have  some  other  power  than  that  to  sell.  ♦  •  * 
Nor  have  they  any  better  basis  on  principle  than  on  authority.  'I'lieir  under- 
lying i.rinciiije  is  sjiid  to  lie  that  the  agent,  being  (Mupowered  to  s(>ll.  is  in- 
trusted with  all  powers  proper  for  «'lTectuating  the  sale,  and  a  warranty  of 
(piality  is  both  a  i>roiter  and  a  usual  power  for  that  purpose.  If  by  this 
were  meant  that  the  agent  is  inl  rusted  with  all  powers  iHnper  to  the  maUing 
of  :m  I'lTectual  sale,  its  accuracy  could  not  be  (|uestiiuied.  Undonjitedly  bis 
authority  e.xtends  to  whatever  is  jiroper  to  be  done  in  fbxlng  the  price,  and  the 
time  and  mode  of  payment,  and  the  tinu'  and  mode  of  vesting  the  title  and 
delivering  the  chattel.  .Ml  these  things  are  incident  to  the  sale.  I'.ul  if  the 
e.xpressinn  mean  that  the  agent  Is  intrusted  with  all  powers  convenient  for 
the  purjMoe  of  inducing  the  pur<liaser  to  buy,  even  to  the  extent  of  enabling 


;>Tt  THK  Ai  riiouriY  (Part  2 

the  })laintitT  contciuK'd  that  the  circumstaiicos  created  an  authority  in 
the  agent  to  warrant,  on  various  grounds, — among  others,  he  referred 
to  cases  where  the  agent  has  hy  law  a  general  authority  to  hind  his 
principal,  though  as  hetween  themselves  there  was  no  such  authority, 
such  as  partners,  masters  of  ships,  and  managers  of  trading  husiness; 
and  stress  was  laid  on  the  expressions  of  several  judges,  that  the  serv- 
ant of  a  horse-dealer  or  livery-stable  keeper  can  bind  his  master  by  a 
warranty,  though,  as  between  themselves,  there  was  an  order  not  to 
warrant :  see  Hclyear  v.  Hawke,  5  Esp.  N.  P.  C.  72,  Alexander  v. 
Gibson,  2  Campb.  555,  Fenn  v.  Harrison,  3  T.  R.  757.  We  under- 
stand those  judges  to  refer  to  a  general  agent  employed  for  a  prin- 
cipal to  carry  on  his  business,  that  is,  the  business  of  horse-dealing; 
in  which  case  there  would  be  by  law  the  authority  here  contended  for. 
But  the  facts  of  the  present  case  do  not  bring  the  defendant  within 
this  rule,  as  he  was  not  shown  to  carry  on  any  trade  of  dealing  in 
horses. 

It  was  also  contended  that  a  special  agent,  without  any  express 
authority  in  fact,  might  have  an  authority  by  law  to  bind  his  princi- 
pal ;  as,  where  a  principal  holds  out  that  the  agent  has  such  author- 
ity, and  induces  a  party  to  deal  with  him  on  the  faith  that  it  is  so. 
In  such  a  case  the  principal  is  concluded  from  denying  this  authority, 
as  against  the  party  who  believed  what  was  held  out,  and  acted  on 

him  to  make  collateral  contracts  to  that  end,  then  I  think  it  is  in  violation  of 
the  settled  rule  that  the  si)ecial  agent  must  be  confined  strictly  to  his  express 
authorit.v.  and  is  in  opposition  to  well-considcnTd  and  authoritative  decisions. 
For  example,  it  might  very  much  facilitate  the  sale  if  the  agent  could  endorse 
the  vendee's  note  for  the  purpose  of  raising  the  money  to  pay  the  price,  and 
such  an  exercise  of  power  would  jeopardize  the  principal  no  more  than  would 
a  sale  on  credit,  and  very  much  less  than  might  a  warranty  of  quality;  and 
yet  I  imagine  that  a  special  agent  could  not  make  such  an  endorsement  bind- 
ing on  his  employer,  for  in  Gulick  v.  Grover,  3:j  N.  J.  Law,  4G3,  97  Am.  Dec. 
728.  the  Court  of  Errors  held  tliat  even  a  general  agent  had  no  authority  so 
to  endorse,  to  enal  le  his  princiiKiTs  debtor  to  borrow  money  to  pay  the  debt. 
So  in  Upton  v.  Suffolk  County  Mills,  11  Cush.  586,  59  Am.  Dec.  103,  it  was 
adjudged  that  even  a  general  agent  for  the  sale  of  flour  could  not  warrant 
that  it  would  keep  good  during  a  voyage  to  California.  And  in  Bryant  v. 
Moore,  2<i  Me.  S4,  45  Am.  Dec.  90,  a  warranty  of  oxen  by  a  special  agent 
em])o\vered  to  exchange,  was  held  invalid  against  the  principal.  Likewise,  in 
Lipscomb  v.  Kitrell,  11  Humph,  250,  it  was  decided  that  an  authority  to  sell 
a  claim  confers  no  authority  to  guarantee  it — that  sudi  a  guaranty  is  not  a 
necessary  incident  of  the  sale;  and  a  similar  conclusion  was  reached  as  to 
bank  stock,  in  Smith  v.  Tracy,  30  N.  Y.  79." 

Another  portion  of  this  opinion  may  be  found  on  p.  170. 

Cf.  Dennis  v.  Ashley,  15  Mo.  453  (1852),  in  which  giving  a  warranty  is  held 
to  be  a  usual  means  of  making  a  sale,  citing  especially  I>enson,  J.,  in  Nelson 
V.  Cowing,  0  Hill  (N.  Y.)  3:;s  (1844).  But  in  Smith  v.  Tracy,  30  N.  Y.  79  (1807), 
this  is  denied  as  to  a  special  authority  to  sell  particular  i)roi)erty,  and  in 
the  leading  case  of  Wait  v.  B.orne,  123  N.  Y.  592,  25  N.  K.  1053  (1S9()).  the 
implied  power  of  an  agent  to  warrant  qualit.v  is  limited  to  cases  wliere  a 
usage  to  warrant  can  be  shown.  The  distinction  between  usual  and  unusual 
warranties  is  further  brought  out  in  Reese  v.  Bates,  94  Va.  .'{21,  20  S.  K.  805 
(I'OT).  The  question  of  whether  a  warranty  is  usual  in  a  particular  trade  is 
in  general  for  the  iury  upon  the  evidence.  Dingle  v.  Hare,  7  C  B.  N.  S.  145, 
97  !•:.  C.  L.  145  (1859). 


Ch.  1)  NATURE    AND    EXTENT  875 

it:  see  Pickering  v.  Busk,  15  East,  38,  ante,  p.  319.  But  the  facts  do 
not  bring  the  defendant  within  this  rule. 

The  main  rehance  was  placed  on  the  argument  that  an  authority 
to  sell  is  by  implication  an  authority  to  do  all  that  in  the  usual  course 
of  selling  is  required  to  complete  a  sale;  and  that  the  question  of 
warranty  is  in  the  usual  course  of  a  sale  required  to  be  answered,  and 
that  therefore  the  defendant  by  implication  gave  to  Greig  an  authority 
to  answer  that  question,  and  to  bind  him  by  his  answer.  It  was  a 
part  of  this  argument  that  an  agent  authorized  to  sell  and  deliver 
a  horse  is  held  out  to  the  buyer  as  having  authority  to  warrant.  But 
on  this  point  also  the  plaintiff  has  in  our  judgment  failed. 

W'e  are  aware  that  the  question  of  warranty  frequently  arises  upon 
the  sale  of  horses;  but  we  are  also  aware  that  sales  may  be  made 
without  any  warranty  or  even  an  inquiry  about  warranty.  If  we  laid 
down  for  the  first  time  that  the  servant  of  a  private  owner  intrusted 
to  sell  and  deliver  a  horse  on  one  particular  occasion  is  therefore  by 
law  authorized  to  bind  his  master  by  a  warranty,  we  should  estab- 
lish a  precedent  of  dangerous  consequence :  for,  the  liability  created 
by  a  warranty  extending  to  unknown  as  well  as  known  defects,  is 
greater  than  is  expected  by  persons  unexperienced  in  law ;  and,  as 
everything  said  by  the  seller  in  the  bargaining  may  be  evidence  of 
warranty  to  the  effect  of  what  he  said,  an  unguarded  conversation 
with  an  illiterate  man  sent  to  deliver  a  horse  may  be  found  to  have 
created  a  liability  which  would  be  a  surprise  equally  to  the  servant 
and  the  master.  We  therefore  hold  that  the  buyer  taking  a  warranty 
from  such  an  agent  as  was  employed  in  this  case,  takes  it  at  the  risk 
of  being  able  to  prove  that  he  had  the  principal's  authority:  and,  if 
there  was  no  authority  in  fact,  the  law  from  the  circumstances  docs 
not  in  our  opinion  create  it. 

When  the  facts  raise  the  question  it  will  be  time  enough  to  decide 
the  liability  created  by  such  a  servant  as  a  foreman  alleged  to  be  a 
general  agent,  or  such  a  special  agent  as  a  person  intrusted  with  the 
sale  of  a  horse  in  a  fair  or  other  public  mart,  where  stranger  meets 
stranger,  and  the  usual  course  of  business  is  for  the  person  in  pos- 
session of  the  horse,  and  appearing  to  be  the  owner,  to  have  all  the 
powers  of  an  owner  in  resj)ect  of  the  sale.  The  authority  may  under 
such  circumstances  as  are  last  referred  to  be  implied,  though  the  cir- 
cumstances of  the  present  case  do  not  create  the  same  inference.  It 
is  unnecessary  to  add,  that,  if  the  seller  should  repudiate  the  war- 
ranty by  his  agent,  it  follows  that  the  sale  would  be  void,  there  being 
no  f|Ucstion  raised  upon  tliis  jioint. 

Judgment  for  the  defendant. 


o7G  THE  AUTuouriY  (Part  2 

w 

WESTURN  V.  PAGE. 

(Supreme  Court  of  Wisconsin.  1S!»(!.     'M  Wis.  251,  68  N.  W.  1003.) 

Action  for  damages  for  breach  of  warranty  of  a  horse,  traded  to 
plaintiff  by  defendant's  agent,  Hall. 

Marshall,  J.  One  question,  only,  is  necessary  to  be  decided  in  the 
determination  of  this  appeal ;  that  is,  did  the  trial  court  err  in  instruct- 
ing the  jury,  in  substance,  as  follows:  If  Mr.  Hall,  the  defendant's 
agent,  made  an  agreement  of  warranty  respecting  the  soundness  of 
the  horse,  the  defendant  is  bound  by  it,  because  he  gave  Hall  «'*  full 
authority  to  sell  or  exchange  the  horse.  Plaintiff  had  a  right  to  rely 
upon  the  authority  of  Hall  in  making  whatever  agreement  was  made 
as  part  of  the  agreement  or  sale. 

We  assume  that  the  learned  trial  judge  relied  on  Boothby  v.  Scales, 
27  Wis.  626,  where  this  court  decided  that  general  authority  to  an 
agent  to  sell  includes  power  to  sell  with  warranty,  unless  the  purchaser 
knows  the  private  instructions  to  the  agent,  or  that  he  is  exceeding 
his  powers,  overlooking  the  fact  that  such  case  has  been  repeatedly 
overruled  in  subsequent  cases.  In  Pickert  v.  Marston,  68  Wis.  465, 
32  N.  W.  550,  60  Am.  Rep.  876,  the  subject  was  discussed  at  length, 
and  the  general  rule,  laid  down  by  standard  text  writers,  and  sup- 
ported by  the  great  weight  of  authority,  was  there  stated  with  ap- 
proval, as  follows :  "The  general  rule  is  as  to  all  contracts,  including 
sales,  that  the  agent  is  to  do  whatever  is  usual  to  carry  out  the  object 
of  his  agency,  and  it  is  a  question  for  the  jury  to  determine  what 
is  usual.  If,  in  a  sale  of  the  goods  confided  to  him,  it  is  usual  in  the 
market  to  give  a  warranty,  the  agent  may  give  that  warranty  in  or- 
der to  effect  the  sale."  The  subject  was  again  before  the  court  in 
Larson  v.  Aultman  &  Taylor  Co.,  86  Wis.  281,  56  N.  W.  915,  918, 
39  Am.  St.  Rep.  893.  In  the  opinion  of  the  court  by  Mr.  Justice 
Cassoday,  it  is  there  said :  "The  rule  is  well  settled  that  the  agent 
employed  to  sell  has  no  implied  power  to  warrant,  unless  the  sale  is 
one  which  is  usually  attended  with  warranty." 

So,  it  comes  to  this :  that,  in  order  to  make  out  a  cause  of  action 
for  breach  of  an  express  warranty  of  an  article  sold  by  an  agent,  it 
is  incumbent  upon  the  party  seeking  to  enforce  such  warranty  to 
prove  express  authority  from  the  principal  to  make  it,  or  that  such 
sales  are  usually  attended  with  such  warranties;  and  the  question 
of  whether  so  usually  attended  or  not  is  one  for  determination  by  the 
jury  from  the  evidence.  Roche  v.  Pennington,  90  Wis.  107,  62  N.  W. 
946;    Pickert  v.  Marston,  supra.     In  the  light  of  the  foregoing,  the 

68  The  agent  may  make  himself  liaMo  on  the  warrant.y,  or  both  himself  and 
principal,  but  a  recovery  against  one  bars  a  right  against  the  other.  Dahl- 
strom  V.  Geruiunder,  198  N.  Y.  449,  92  N.  E.  lOG,  19  Ann.  Cas.  771  (1910). 


Ch.  1)  NATURE    AND    EXTENT  377 

instruction  under  consideration  is  clearly  erroneous,  which  must  work 
a  reversal  of  the  judgment  appealed  from. 

The  judgment  of  the  circuit  court  is  reversed,  and  the  cause  re- 
manded for  a  new  trial. 


CONKLING  V.  STANDARD  OIL  CO. 

(Supreme  Court  of  Iowa,  1908.     138  Iowa,  596,  116  N.  W.  822.) 

Action  for  damages.  Verdict  and  judgment  for  plaintifif.  Defend- 
ant by  its  agent  sold  plaintilif  Polar  Ice  Oil  for  use  on  his  automobile, 
under  warranty,  as  plaintiff  claimed,  that  it  was  not  inflammable  or 
capable  of  combustion,  and  that  it  was  absolutely  safe  to  be  used  as 
a  cooling  medium.  The  next  day  the  oil  caught  fire  and  his  machine 
was  burned  and  destroyed. 

Bishop,  J.®*  *  *  *  Qj^  tj^g  question  of  the  authority  of  the 
selling  agent  of  defendant  to  warrant  the  oil  sold  to  plaintiff  but  little 
need  be  said.  We  grant  to  counsel  for  appellant  that  there  is  no  evi- 
dence in  the  record  of  authority  granted  in  terms.  And  we  may  con- 
cede for  the  purpose  of  the  case  that,  by  general  rule,  a  bare  authority 
to  sell  does  not  carry  with  it  by  implication  authority  to  warrant.  But 
an  essential  attribute  to  every  agency  "is  the  power  to  do  all  that  is 
usual  and  necessary  to  accomplish  the  object  for  which  the  agency  was 
created."  Alechem  on  Agency,  §  347.  And  every  one  knows  that  the 
manufacturer  of  goods  who  employs  sales  agents  puts  his  goods  into 
the  hands  of  such  agents  to  be  sold.  So,  where  goods  are  designed  for 
a  particular  purpose,  and  therefore  to  appeal  to  a  particular  trade,  he 
naturally  expects  his  agents  to  make  known  that  purpose,  and  to  rep- 
resent to  proposing  purchasers  that  the  goods  are  adapted  to  and  can 
be  safely  used  for  such  purpose. 

Accordingly  it  must  be  presumed  that  that  which  he  expects  to  be 
done,  and  without  which  the  object  of  the  agency  could  not  adequately 
be  accomplished,  he  has  authorized  to  be  done.  And  especially  this 
should  be  the  rule  where  the  article  offered  for  sale  is  of  such  a  char- 
acter as  that  the  projxising  |)urchaser  cannot  be  expected  in  reason  to 
have  knowledge  of  the  projjerties  thereof,  and  must  rely  upon  the 
superior  knowledge  and  skill  ©f  the  manufacturer  and  those  who  rep- 
resent him.  Moreover,  as  we  shall  see  presently,  the  law  will  imply  a 
warranty  in  the  case  of  a  sale  so  made,  and  it  would  be  illogical,  at 
least,  to  permit  a  principal  to  say  he  did  not  authorize  that  which  the 
law  attaches  as  a  consequence  to  the  very  act  the  agent  was  employed 
to  do.  As  defendant  was  the  manufacturer  of  the  oil  in  (luestion,  and 
knew"the  projjcrties  thereof  as  plaintiff  could  not  know,  and  as  it  was 
carrying  such  oil  in  stock  to  be  sold  by  its  agent  in  charge  as  a  cooling 

•  »  I'art  of  the  oipliiloii  Is  omitted. 


:>7Ss  TnK  AUTiioKiTY  (Part  2 

inciliuni  for  gasoline  engines,  we  do  nut  think  it  is  in  any  jiosition  to 
deny  the  anthority  of  sueh  agent  to  make  representation  of  the  jnu"- 
pose  of  the  oil  and  that  it  eonld  he  safely  used  for  that  purpose.    *    *    * 
Judgment  affirmed. 


UPTON  V.  SUFFOLK  COUNTY  MILLS. 

(Supronio  .Tudicial   C'oin-t  of  Massaolmsetts,   185;?.     11  Cush.  5SG,  50  Am.  Dec. 

k;:!.) 

Assumpsit  for  hreach  of  warranty  that  flour  should  keep  sweet 
during  the  voyage  to  California. 

]\Ietcalf,  J.  The  court  have  not  found  it  necessary  to  form  an 
opinion  upon  a  question  which  was  ably  argued,  namely,  whether  the 
contract  declared  on  legally  purports  to  be  a  contract  between  the 
plaintiiT  and  the  defendants.  Assuming  that  it  does,  yet  we  are  all  of 
opinion  that  the  defendants  are  not  bound  by  it,  because  Allcott  had 
no  authority  to  bind  them  by  such  contract.  It  appears  from  his  tes- 
timony that  he  was  their  general  selling  agent,  and  had  no  special  in- 
structions in  regard  to  making  sales ;  that  no  authority  (by  which  he 
doubtless  means  express  authority)  w'as  ever  given  to  him  by  the  de- 
fendants to  make  such  a  warranty  as  that  on  which  this  action  is 
brought;  that  no  extra  price  was  paid  for  the  flour  by  reason  of  the 
warranty;  that  though  the  sale  was  entered  on  the  defendants'  books, 
yet  that  the  warranty  was  not  entered  there ;  and  that  the  defendants 
had  no  notice  of  the  warranty  until  they  were  called  upon  by  the  plain- 
tiff to  answer  for  a  breach  of  it. 

The  single  question  which  we  have  examined  is,  what  is  the  extent 
of  the  implied  authority  of  a  general  selling  agent?  The  answer  is,, 
it  is  the  same  as  that  of  other  general  agents.  And  it  is  an  elementary 
principle  that  an  agent,  employed  generally  to  do  any  act,  is  authorized 
to  do  it  only  in  the  usual  way  of  business.  Smith's  Merc.  Law  (Am. 
Ed.  1847)  105  (5th  Ed.)  129:  Woolrych  on  Com.  &  Merc.  Law,  319; 
Jones  V.  Warner,  11  Conn.  48.  A  general  agent  is  not,  by  virtue  of 
his  commission,  permitted  to  depart  from  the  usual  manner  of  effect- 
ing what  he  is  employed  to  effect.  3  Chit.  Law  of  Com.  &  Man.  199. 
When  one  authorizes  another  to  sell  goods,  he  is  presumed  to  au- 
thorize him  to  sell  in  the  usual  manner,  and  only  in  the  usual  man- 
ner, in  which  the  goods  or  things  of  that  sort  are  sold.  Story  on 
Agency,  §  60.  See  also  Shaw  v.  Stone,  1  Cush.  228.  The  usage 
of  the  business  in  which  a  general  agent  is  employed  furnishes  the 
rule  by  which  his  authority  is  measured.  Hence,  a  general  selling 
agent  has  authority  to  sell  on  credit,  and  to  warrant  the  soundness  of 
the  article  sold,  when  such  is  the  usage.  Goodenow  v.  Tyler,  7  Mass. 
36,  5  Am.  Dec.  22 ;  Alexander  v.  Gibson,  2  Campb.  555 ;  Nelson  v. 
Cowing,  6  Hill  (N.  Y.)  336 ;  2  Kent,  Com.  (6th  Ed.)  622 ;  Russell  on 
Factors,  58;  Smith  on  Master  and  Servant,  128,  129.     I  kit  as  stocks 


Ch.  1)  NATURE    AND    EXTENT  379 

and  goods  sent  to  auction  are  not  usually  sold  on  credit,  a  stock  broker 
or  auctioneer  has  no  authority  so  to  sell  them,  unless  he  has  the  own- 
er's express  direction  or  consent.  Wiltshire  v.  Sims,  1  Campb.  258; 
3  Chit.  Law  of  Com.  &  Man.  205 ;  1  Bell,  Com.  388.  And  it  was  said 
by  Mr.  Justice  Thompson  (The  Monte  Allegre,  9  Wheat.  647,  6  L.  Ed. 
174)  that  auctioneers  have  only  authority  to  sell  and  not  to  warrant, 
unless  specially  instructed  so  to  do. 

As  there  is  no  evidence  nor  suggestion  of  a  usage  to  sell  flour  with 
the  hazardous  warranty  that  it  shall  keep  sweet  during  a  sea  voyage, 
in  which  it  must  twice  cross  the  equator,  we  deem  it  quite  clear  that 
nothing  short  of  an  express  authority,  conferred  on  AUcott  by  the  de- 
fendants, would  empower  him  to  bind  them  by  such  a  warranty.  See 
Cox  v.  Midland  Counties  Railway  Company,  3  Welsh.  Hurlst.  & 
Gord.  278. 

Plaintiff  nonsuit.  y  I 


(C)  To  Fix  Terms  " 

DAYLIGHT  BURNER  CO.  v.  ODLIN. 

(Supreme  Judicial  Court  of  New  Hampshire,  1S71.    51  N.  H.  56,  12  Am.  Hep. 

45.) 

Action  against  the  defendant  as  a  common  carrier  for  delivering 
goods  marked  C.  O.  D.  without  being  paid  for  the  same.  The  goods 
had  been  sold  on  credit  to  one  Berry  by  Moore,  a  traveling  agent  of 
plaintiff,  empowered  to  sell  on  commission.  Defendant  refused  to  de- 
liver until  Berry  brought  an  order  from  Moore  to  deliver  "without 
C.  O.  D."    Verdict  for  defendant. 

Bkllovvs,  C.  J.  From  the  uncontradicted  testimony  of  the  plaintiff 
and  the  finding  of  the  jury,  it  may  be  assumed  that  Moore  was  clothed 
by  the  plaintiff  with  an  apparent  authority,  like  that  of  a  factor,  to  sell 
all  the  goods  of  the  plaintiff  he  could  sell  within  his  business  circuit, 
on  a  commission  of  ten  per  cent. 

As  incident  to  that  general  authority,  he  had  power  to  fix  the  terms 
of  sale,  including  the  time,  place,  and  mode  of  delivery,  and  the  price 
of  the  goods,  and  the  time  and  mode  of  payment,  and  to  receive  pay- 
ment of  the  price,  subject  of  course  to  be  controlled  by  proof  of  the 
mercantile  usage  in  such  trade  or  business. 

There  is  some  conflict  in  the  adjudged  cases  upon  the  question  of  the 
authority  of  a  factor  to  sell  on  credit,  but  we  think  the  weight  of 
modern  autliority  is  in  favor  of  the  position  that  he  may  sell  on  credit, 
unless  a  contrary  usage  is  shown.  Goodenovv  v.  Tyler,  7  Mass.  36,  5 
.\m.  Dec.  22;  Hajigood  v.  Batcheller,  4  Mete.  (Mass.)  576;  Greely  v. 
I'.artlctt,  1  Grecnl.  178,  10  Am.  l^cc.  54;  Van  Men  v.  Vanderpool,  6 
Johns.  70.  5  Am.  Dec.  K^2 ;  Robertson  v.  Livingston,  5  Cow.  473; 
Douglass  V.  Leland,  1  Wend.  490.  And  see  1  Am.  Lead.  Cases  (4th 
Ed.)  662.  note,  where  it  is  said  that  it  is  universally  established  as  the 


380  Tin;  ArnioKiTY  (Part  2 

law-moroliant  that  n  fac(t)r  may  sell  on  credit.  So  is  Laiissalt  v.  Lip- 
pincott,  6  Scrg.  .S:  R.  386,  9  Am.  Dec.  440,  and  May  v.  Mitchell,  5 
Humph.  365,  and  Story  on  Agency,  §  20'). 

The  same  views  are  recognized  in  Scott  v.  Surman,  Willes,  406; 
Russell  V.  Ilankey,  6  T.  R.  12;  Ilauglilon  v.  Mathews,  3  B.  &  T. 
480,  per  Chamhre.  J. ;  3  Selw.  N.  P.  719. 

In  the  case  before  us,  Moore  stands  much  on  the  same  footing  as 
a  factor.  The  most  marked  distinction  is,  that  he  is  a  travelling  mer- 
chant, and  did  not  apparently  have  his  principal's  goods  with  him;  but 
this,  we  think,  cannot  affect  the  rule. 

The  reason  of  that  rule  in  the  case  of  factors  is,  that  it  is  found,  by 
experience  and  repeated  proofs  in  courts  of  justice,  that  it  is  ordinarily 
the  usage  of  factors  to  sell  on  credit;  and  the  same  reason  will  apply 
in  this  case. 

We  have  a  case,  then,  where  the  agent  was  apparently  clothed  with 
the  authority  to  sell  the  plaintiff's  goods,  without  limitation  as  to  the 
quantity,  and  on  commission,  for  cash  or  on  credit  as  he  might  think 
proper;  and  this  being  so,  Moore  must  be  regarded,  in  respect  to  third 
persons,  as  the  plaintiff's  general  agent,  whose  authority  would  not 
be  limited  by  instructions  not  brought  to  the  notice  of  such  third  per- 
sons.   Backman  v.  Charlestown,  42  N.  H.  125,  and  cases  cited. 

As  Moore,  then,  in  respect  to  third  persons,  had  the  power  to  sell 
on  credit,  the  authority  to  control  the  delivery  of  the  goods  so  sold  and 
sent  to  his  order,  for  the  purpose  of  making  it  conform  to  the  contract 
of  sale,  would  necessarily  come  within  the  scope  of  his  agency;  and 
we  think  his  order  to  the  defendant  would  justify  a  delivery  of  the 
goods  without  payment,  unless  he  had  notice  of  the  agent's  want  of 
authority.  As  to  him  the  agent's  apparent  authority  was  real  au- 
thority.^" 

The  marking  of  the  package  by  another  agent  of  the  plaintiff,  to  the 
effect  that  cash  was  required  on  delivery,  was  not  in  law  notice  of  such 
want  of  authority,  although  it  might  be  sufficient  to  put  the  defendant 
upon  inquiry.  That,  however,  was  properly  left  to  the  jury,  and  they 
have  found  it  not  to  be  sufficient  for  that  purpose.  The  marking  of 
the  package  in  that  way  does  not  necessarily  imply  that  the  agent  had 
no  authority  to  sell  on  credit,  but  it  might  indicate  merely  that  the 
person  so  marking  it  supposed  the  sale  to  be  for  cash.  And  it  might 
well  be  considered  to  come  within  the  scope  of  Moore's  agency  to  make 
the  delivery  conform  to  the  contract  of  sale. 

As  the  defendant,  therefore,  is  found  to  have  had  no  notice  of  any 
want  of  authority  in  Moore,  and  was  not  put  upon  inquiry,  there 
must  be : 

Judgment  on  the  verdict. 

TO  When  the  agent  is  anthorizorl  to  sell  on  credit  he  may  take  a  promissory 
note  in  his  own  name,  if  he  exercised  rcasonahle  fare,  and  not  he  answerable 
to  the  principal  for  the  value  of  the  goods  sold  if  the  maker  becomes  bankrupt. 
Goodenow  v.  Tyler,  7  Mass.  .36,  5  Am.  Dec.  22  (1810). 


Ch.  1)  NATURE    AXD    EXTENT  381 


STIRN  V.  HOFFMAN  HOUSE  CO. 

(Common  Pleas  of  New  York,  City  and  County,  General  Term.  1S94.    8  Misc. 
Rep.  246,  28  N.  Y.  Supp.  724.) 

BiSCHOFF,  J.''^  Plaintifif  sued,  as  the  assignee  of  the  claim  of  L. 
Somborn  &  Co.,  to  recover  the  fair  and  reasonable  value  of  the 
champagnes  sold  and  delivered  to  the  defendant.  The  answer  de- 
nied generally  the  sale  and  delivery,  besides  pleading  payment  and 
an  offset  against  the  plaintiff's  assignors  growing  out  of  discounts 
on  former  purchases,  to  which  the  defendant  claimed  to  be  entitled 
by  agreement  with  Somborn  &  Co.'s  agent.  On  the  trial,  Julius 
Somborn,  a  member  of  the  firm  of  Somborn  &  Co.,  called  as  a  wit- 
ness for  the  plaintiff,  testified  to  the  fact  of  the  sale  and  delivery  of 
champagnes  of  the  fair  and  reasonable  value  of  $232  to  the  defend- 
ant. Tliis  testimony  not  only  remained  wholly  uncontradicted,  but 
was  conceded  by  the  defendant's  president,  Stokes,  to  be  true;  and 
the  defendant's  efforts  on  the  trial  were  confined  to  the  proof  of  an 
agreement  with  Somborn  &  Co.'s  agent  that  the  defendant  should 
be  allowed  a  discount  of  10  per  cent,  of  its  purchases,  the  aggregate 
amount  of  the  discounts  claimed  being  $320.13.  There  was  abundant 
testimony  for  the  defendant  to  the  effect  that  an  agreement  to  allow 
the  discounts  was  in  fact  made  by  Somborn  &  Co.'s  general  salesman 
with  the  defendant's  president  some  time  before  the  purchases  on 
which  it  was  claimed  were  made. 

Both  parties  asked  for  the  direction  of  a  verdict — the  plaintiff  for 
the  amount  of  his  claim,  the  defendant  for  the  amount  of  its  offset. 
The  trial  justice  intimated  his  intention  to  grant  the  defendant's  mo- 
tion, whereupon  the  plaintiff's  counsel  requested  submission  of  the 
case  to  the  jury.  This  was  denied,  and  an  exception  taken  to  the 
denial.  A  verdict  was  thereupon  directed  for  the  defendant  for 
$67.13,  the  excess  of  the  defendant's  claim  against  the  plaintiff's  as- 
signors, to  which  direction  plaintiff's  counsel  again  excepted.  On 
appeal  to  the  general  term  below  from  the  judgment  entered  on  the 
verdict  the  court  reduced  the  defendant's  recovery  to  an  amount 
equal  to  the  plaintiff's  claim,  and,  as  so  modified,  afKirmed  the  judg- 
ment.    *     *     * 

The  only  question  of  law  which  is  urged  by  counsel  for  the  appel- 
lant to  have  arisen  on  the  facts  in  evidence,  and  relating  to  the  de- 
fendant's claim  against  the  plaintiff's  assignors,  is  whether  or  not 
a  general  salesman  employed  by  a  firm  of  merchants  to  sell  its  wares 
has  implied  authority  to  fix  the  price  and  terms  upon  a  sale.  The 
affirmative  of  that  proposition  admits  of  no  successful  dispute.  The 
employment  of  the  agent  is  the  measure  of  his  authority,  and  one 
employed  to  sell,  inferentially,  therefore,  has  authority  to  fix  the  i)rice 
and  adjust  the  terms  of  the  sale,  for  without  the  last-nicndoned  au- 

Ti  Part  of  the  opinion  Is  omitted. 


382  Tin:  AiiiioKiiY  (Part  2 

thority  all  other  authority  wouUl  ho  of  no  avail.  "An  ag^cnt  author- 
ized to  sell  either  real  or  personal  estate  may  enter  into  a  contract 
within  the  terms  of  his  authority,  wtiich  will  himl  iiis  ])rincipal.  This 
is  of  the  very  essence  of  the  authority  given — an  authority  to  sell. 
That  he  can  bind  his  principal  by  a  formal  contract  is  the  doctrine  of 
the  books  from  the  earliest  law  on  the  subject"  (Ilaydock  v.  v^tow, 
40  X.  V.  0(0.  o()S);  and.  we  may  add,  that  witht)ut  a  price  and  terms 
there  could  be  no  contract  of  sale.  It  is  conceded  that,  if  the  agent 
has  departed  from  the  instructions  of  his  principal,  to  the  purchaser's 
knowledge,  the  principal  will  not  be  bound;  but  whether  or  not  the 
defendant  or  its  officers  knew  that  Somborn  &  Co.'s  salesman  had 
no  authority  to  stipulate  for  the  discounts  claimed  on  the  trial  was 
a  question  of  fact,  which  we  must  assume  to  have  been  determined 
by  the  trial  justice  in  the  defendant's  favor. 

But  one  alleged  error  in  ruling  on  the  trial  is  urged  by  counsel 
for  appellant,  namely,  the  adrnission  of  the  testimony  of  the  defend- 
ant's witness  Cornish  as  to  the  amount  of  the  discount  claimed  by 
defendant.  It  is  sul^cient  to  say  that  no  exception  appears  to  have 
been  taken  to  the  ruling.    Judgment  afErmed,  with  costs. 


PAYNE  V.  POTTER. 

(Supreme  Court  of  Iowa,   1859.     9  Iowa,  549.) 

Replevin  for  a  horse.  Judgment  for  plaintiff  and  defendant  ap- 
peals. 

Stockton,  J."  The  first  assignment  of  error  is  upon  the  charge 
of  the  court.  The  rule  of  law  is  that  no  man  is  bound  by  the  act  of 
another,  without  or  beyond  his  consent ;  and  where  an  agent  acts 
under  a  special  or  express  authority,  whether  written  or  verbal,  the 
party  dealing  with  him  is  bound  to  know  at  his  peril  what  the  powep 
of  the  agent  is,  and  to  understand  its  legal  effect;  and  if  the  agent 
exceed  the  boundary  of  his  legal  power,  the  act,  as  concerns  the 
principal,  is  void.  Delalield  v.  State  of  Illinois,  26  Wend.  193 ;  Story 
on  Agency,  §  165.  The  power  must  be  pursued  with  legal  strictness, 
and  the  agent  can  neither  go  beyond  nor  beside  it.  The  act  must  be 
legally  identical  with  that  authorized  to  be  done  or  the  principal 
is  not  bound.  1  Am.  Lead.  c.  544,  545,  note  to  Rossiter  v.  Rossiter. 
So  it  is  held  that  an  agent  to  whom  a  horse  is  given  to  sell  for  the 
principal,  cannot  deliver  him  in  payment  of  his  own  debt,  and  the 
owner  may  recover  the  horse  from  a  purchaser  to  whom  he  has  been 
so  delivered.     Parsons  v.  Webb,  8  Greenl.  38,  22  Am.  Dec.  220. 

And  it  is  held  that  a  special  authority  or  direction  to  sell,  does  not 
authorize  a  sale  on  credit,  unless  commercial  custom  has  given  rise 

7  2  Part  of  the  opinion  is  omitted. 


Ch.  1)  NATURE    AND    EXTEXT  383 

to  such  an  understanding  in  some  particular  business.  The  question 
whether  in  such  case  a  discretion  to  sell  on  credit  is  given,  must 
depend  on  the  authority  in  the  particular  case." ^  In  ]\Iay  v.  Mitchell, 
5  Humph.  365,  a  principal  delivered  to  an  agent  three  mules  to  be 
taken  to  the  southern  market,  and  to  be  sold  for  the  best  price  that 
he  could  get,  and  the  proceeds  to  be  returned ;  the  agent  took  them 
to  the  south  and  sold  them  on  credit,  and  the  purchaser  proved  in- 
solvent; it  was  held  that  the  agent  was  vested  with  a  discretionary 
power  to  sell  upon  the  best  terms  that  could  be  procured  according 
to  the  course  of  trade  in  that  part  of  the  country  to  which  the  mules 
\yere  carried,  and  as  this  was  proved  to  be  on  credit,  the  agent  was 
Held  not  to  be  liable  to  the  principal. 

Every  general  power  necessary  irnplies  the  grant  of  every  matter 
necessary  to  its  complete  execution!  Peck  v.  Harriott,  6  Serg.  8c 
RM46,  9  Am.  Dec.  415.  In  the  absence  of  special  instruction  to  the 
contrary,  and  in  the  absence  of  such  prescription  as  to  the  manner 
of  doing  the  act,  as  implies  an  exclusion  of  any  other  manner,  an  au- 
thority or  direction  to  do  an  act,  or  accomplish  a  particular  end,  im- 
plies and  carries  with  it  authority  to  use  the  necessary  means  and  in- 
ducements, and  to  execute  the  usual  legal  and  appropriate  measures 
proper  to  perform  it.  And  not  only  are  the  means  necessary  and 
proper  for  the  accomplishment  of  the  end  included  in  the  authority ; 
but  also,  all  the  various  means  which  are  justified  or  allowed  by  the 
usages  of  trade.  Thus  (says  Judge  Story)  if  an  agent  is  authorized 
to  sell  goods,  this  will  be  construed  to  authorize  the  sale  to  be  made 
on  credit  as  well  as  for  cash,  if  this  course  is  justified  by  the  usages 
of  trade,  and  the  credit  is  not  beyond  the  usual  period.  Story  on 
Agency,  §  60. 

■^  We  think  it  results  from  the  rules  above  laid  down  that  the  burden 
lay  upon  the  defendant  to  show  that  the  sale  by  the  agent  on  credit 
was  justified  by  the  usages  of  trade,  and  that  the  credit  given  was  not 
unreasonable.  Without  such  proof  the  authority  of  the  agent  could 
only  be  construed  into  an  authority  to  sell  for  cash ;  and  in  this  view 
there  was  no  error  in  the  charge  of  the  court  to  defendant's  preju-/^ 
dice.     *     *     * 

Judgment  reversed. 

78  A  soiling  acent  cannot,  wlthont  sporlal  anthnrlty.  rpsort  to  xmusual  and 
extraonllnary  means  for  carrying,'  «n  his  .'iKcncy.  Shaw  v.  Stono,  1  f'ush. 
228  (1.S48).  I'.ut  KlvinK  the  tlilrd  jiarly  a  refusal  for  two  days  is  not  unusual 
or  unreasonable.    Melster  v.  Cleveland  Dryer  Co.,  11  111.  App.  227  (18S2). 


oS4  Tiuo  AuruoKiTY  (Part  2 

TAYT.OR   .^'  KARLEY  ORGAN  CO.  v.  STARKKY. 

(SupieuK'   Court  of  Now   Ilampsliirc,   1S70.     59  N.   II.   142.) 

Trover  for  an  organ  which  the  agent,  Davis,  had  traded  for  a 
buggy  and  $40  cash. 

Stanley.  J.  The  contract  between  the  plaintiffs  and  Davis  was 
properly  admitted.  It  was  evidence  of  the  agreement  under  which 
Davis  was  in  possession,  and  tended  to  show  that  his  authority  was  to 
sell,  and  not  to  exchange.  In  the  absence  of  evidence  to  the  contrary, 
to  sell  means  to  sell  for  cash.''*  Davis,  having  no  authority  except  to 
sell  for  cash,  could  not  lawfully  exchange  for  other  property,  either 
in  whole  or  in  part  (Story  Agency,  §  78),  and  if  he  did  the  title  would 
not  pass,  for  the  plaintiffs  did  not  hold  Davis  out,  or  authorize  him  to 
hold  himself  out.  as  owner  of  the  organ.  Holton  v.  Smith,  7  N.  H. 
446;  Burnham  v.  Holt,  14  N.  H.  367;  Towle  v.  Leavitt,  23  N.  H. 
360,  55  Am.  Dec.  195. 

Judgment  for  the  plaintiflfs.  a  if     h 

—         IfM- 

BROWN  V.  WEST. 

(Supreme  Court  of  Vermont,  1897.    69  Vt.  440,  38  Atl.  87.) 

Tyler,  J.  In  July,  August,  and  September,  1892,  the  plaintiflF  was 
a  retail  merchant  in  Ludlow,  in  this  state,  and  the  defendants  were 
wholesale  grocers  in  Springfield,  Mass.  They  had  in  their  employment 
one  Andrews,  as  a  traveling  salesman,  who  was  under  instructions 
from  them  to  sell  certain  "limited  goods,"  so  called,  according  to  price 
lists  which  they  furnished  him,  and  at  no  other  prices,  and  to  make 
collections  and  receipt  bills  in  their  name  as  rendered  from  their  office. 
The  defendants  were  under  an  express  contract  with  the  manufac- 
turers of  these  goods  not  to  sell  them  for  less  than  the  fixed  prices. 
During  this  time  Andrews  sold  the  plaintiff  several  bills  of  goods, 
including  some  that  were  "limited,"  and  subsequently  settled  with  the 
plaintiff,  and  allowed  him  discounts  as  agreed  upon  at  the  time  of 
sale.    Only  the  last  three  consignments  were  in  controversy  here. 

The  plaintiff  had  no  express  knowledge  of  the  defendants'  instruc- 
tions to  Andrews.  He  knew  that  Andrews  sold  him  these  goods  at 
list  prices;  that  the  orders  therefor  were  sent  to  the  defendants  at 
list  prices ;  and  that  the  defendants  rendered  him  bills  at  those  prices ; 
but  he  supposed  that  the  defendants  knew  and  assented  to  the  deduc- 

7  4  The  a^ont  has  no  authority  to  sell  for  Confederate  bonds  unless  they 
are  circulatiDg  as  money.  Brown  v.  Smith,  G7  N.  C.  245  (1S72).  Nor  to  ac- 
cept in  payment  advertising  of  the  principal's  wares  on  the  building  of  the 
third  person.  Beck  v.  Donohue,  27  Misc.  liop.  2.30,  57  N.  Y.  Supp.  741  (1890). 
Nor  to  exchange  the  goods  of  his  principal  for  other  goods,  even  though  he 
could  make  a  sale  in  no  other  way.  Block  v.  Dundon,  83  App.  Div.  539,  81 
N.  Y.  Supp.  1114  (1003). 


Ch.  1)  NATURE    AND    EXTENT  385 

tions,  and  that  they  adopted  this  method  to  evade  their  contract  with 
the  manufacturers. 

The  salesman  clearly  had  no  authority  from  his  principal  to  sell  the 
limited  goods  for  less  than  the  fixed  prices;  but  the  plaintiff  con- 
tends that  the  defendants  held  Andrews  out  to  the  public  as  their 
general  agent,  and  as  having  competent  authority  to  make  the  sales, 
and  that  they  are  bound  by  his  acts.  This  would  be  the  rule  applicable 
to  the  case  if  the  plaintiff  did  not  know  and  had  no  reason  to  believe 
that  the  salesman's  authority  was  limited.  It  was  said  in  Griggs  v. 
Selden,  58  Vt.  561,  5  Atl.  504,  ante,  p.  300:  "In  determining  the  liabil- 
ity of  the  principal,  the  question  is  not  what  authority  was  intended  to 
be  given  the  agent,  but  what  authority  was  a  third  person  dealing  with 
him  justified  from  the  acts  of  the  principal  in  believing  was  given  him." 

No  principle  is  bettor  settled  in  the  law,  nor  is  there  any  founded  on 
more  obvious  justice/  than  that  if  a  person  dealing  with  an  agent 
knows  that  he  is  acting  under  a  circumscribed  and  limited  authority, 
and  that  his  act  is  outside  of  and  transcends  the  authority  conferred, 
the  principal  is  not  bound ;  and  it  is  immaterial  whether  the  agent 
is  a  general  or  special  one,  because  a  principal  may  limit  the  authority 
of  the  one  as  well  as  that  of  the  other.  See  Walsh  v.  Insurance  Co., 
7Z  N.  Y.  10. 

The  plaintiff  must  have  known  of  the  defendants'  contract  with  tl 
manufacturers,  for  the  referee  finds  that  he  supposed  that  the  deferfd- 
ants'  practice  of  rendering  him  bills  in  accordance  with  the  price 
lists,  and  the  agent  making  discounts  on  payment  thereof,  were  under- 
stood methods  of  evading  the  defendants'  contract  with  the  manu- 
facturers not  to  sell  below  fixed  prices.  He  knew  that  the  defendants 
rendered  him  bills  for  the  goods  ordered  by  him  through  the  sales- 
man at  the  list  prices,  and  that  the  salesman  collected  the  bills  of  him 
at  less  than  those  prices.  These  facts  were  sufficient  to  have  put  the 
plaintiff  on  inquiry  as  to  the  extent  of  the  agent's  authority  to  make 
discounts.  He  should  have  inquired  of  the  defendants  whether  the 
salesman  was  acting  under  their  authority  in  making  the  deductions, 
rather  than  have  assumed  that  they  were  conniving  to  defraud  the 
manufacturers.^^ 

Judgment  reversed,  and  judgment  for  defendants. 

TB  P.iit  whore  tho  third  fXTson  hns  no  knowlerlco  of  the  limits  on  the  agent's 
authority  to  fix  iirlces.  tlif  principal  c.-innot  reimdialp  the  cnnfract  on  tiic 
grounds  alone  that  the  price  is  too  low.  Mahray  v.  Kelly-(;oodfellow  Shoe 
Co..  7.'{  Mo.  Ajip.  7  nsos).  Cf.  Sloan  v.  Hrown,  L'L'S  Pa.  405,  77  Atl.  S21.  l.'tn 
Am.  St.  Hep.  lOlD  (1010),  In  wliich  a  lele^rjini  to  the  af;ent.  "If  can't  sell.' hor- 
row."  was  held  to  he  enough  tf>  i)ut  llic  tliird  person  on  notice  of  liuiitatinn  on 
the  price,  and  Fnlton  v.  Sword  .Mfdicine  Co..  H.'i  Ala.  ;{.'{1.  }(»  South.  .■;;).'{  (I'.KMi). 
In  which  the  written  nnler  for  file  woods  conveyed  siiidlar  iintjco  of  the  linii 
Its  of  file  agent's  antiiuiity.  See.  also.  Seven  Hills  Chaiitau(]ua  Co.  T.  Chus* 
Bros.  Co.,  20  Ky.  Law  Kep.  334,  81  S.  W.  238  (1904).  / 

Gor)i).ri{.&  A.— 25  ^^ 


A. 


3S6  Tiiio  AUTiioiuTT  I  ivjy^  (Part  2 


TTOOK  V.  CROWE. 
(Suproino  Judicial  Court  of  M:iiiu'.  IIKC.     100  Mo.  .".00.  01   All.  10S0.) 

S.WAC.i:,  J.  Action  to  recover  the  price  of  two  a\vninj;s  and  one 
sash  curtain  sold  and  delivered  by  the  plaintiffs  to  the  defendants.  'iMie 
agreed  statement  of  facts  shows  that  one  Harry  F.  Hook,  the  selling 
agent  of  the  plaintiffs,  applied  to  the  defendants  for  an  order,  and 
that  the  defendants  gave  an  order  for  the  articles  mentioned,  on  con- 
dition that  he  (Harry  F.  Hook)  would  take  the  ])ay  therefor  in  cloth- 
ing and  work  out  of  defendants'  store,  which  he  agreed  to  do.  On 
the  same  day  Hook  delivered  to  the  plaintiff's  an  unsigned  order  for 
the  aw'nings  upon  one  of  their  printed  Ijlanks.  The  goods  were 
shipped  to  the  defendants  seven  days  later  and  by  them  received.  A 
bill  for  the  same  was  sent  to  them  by  mail  the  same  day.  The  plain- 
tiffs took  the  order  from  their  agent,  Hook,  without  knowledge  of  the 
agreement  which  he  had  made  with  the  defendants  in  regard  to  the 
manner  of  payment,  and  without  notice  or  suggestion  of  payment 
otherwise  than  in  cash  as  usual.  On  the  day  the  original  order  was 
given  the  agent,  Hook,  had  work  done  by  the  defendants  to  the 
mount  of  $1.50,  and  nearly  a  month  later  he  had  clothing  of  them  to 
the  amount  of  $8.50,  all  in  accordance  wnth  his  agreement  with  them 
when  they  gave  the  order  for  the  awnings.  The  defendants  now 
seek  to  have  these  items  allowed  against  the  bill  sued  by  the  plaintiffs. 
The  court  below  gave  judgment  for  the  plaintiffs  for  the  full  amount 
of  their  bill,  and  the  defendants  took  exceptions. 

The  case  hinges  upon  wdiether  the  defendants  at  the  time  they  gave 
the  order  knew  that  Hook  was  acting  as  agent  for  the  plaintiffs,  or 
whether  they  believed  him  to  be  a  principal.  For,  whatever  may  be  the 
implied  authority  of  selling  agents  to  make  terms  and  provisions  for 
payment,  and  however  principals  are  bound  generally  by  the  condi- 
tions their  agents  agree  to,  we  think  it  cannot  be  gainsaid  that  an 
agent  has  no  implied  authority,  which  binds  the  principal,  to  contract 
that  payment  may  be  made  by  goods  to  be  sold  or  services  to  be  ren- 
dered to  him  on  his  own  personal  account.  The  doctrine  laid  down 
in  Parsons  v.  Webb,  8  Me.  38,  22  Am.  Dec.  220,  and  also  Rodick  v. 
Coburn,  68  Me.  170,  is  analogous,  and  not  distinguishable  in  princi- 
ple. Persons  dealing  with  an  agent  knowing  him  to  be  such,  are 
bound  to  know  that  he  has  no  such  implied  authority.  If  they  deal 
with  him  upon  such  terms,  they  are  bound  to  know  that  the  principal 
will  not  be  bound,  unless  he  ratifies.  Accordingly,  if  these  defend- 
ants made  such  unauthorized  agreement  with  the  agent,  knowing  him 
to  be  such,  and  nevertheless  received  the  goofls  ordered,  they  should 
pay  for  them.  Although  the  contract  with  the  agent  was  express,  it 
was  invalid  as  to  the  manner  of  payment.  If  under  such  circumstances 
the  defendants  chose  to  receive  the  goods,  they  afhrmed  the  order 


"T,- 


Ch.  1)  NATUKE    AND    EXTENT  3ST 

itself,  and  became  liable  to  pay  in  cash.'''  In  this  respect  this  case  is 
to  be  distinguished  from  Billings  v.  Mason,  80  Me.  496,  15  Atl.  59. 

On  the  other  hand,  if  the  defendants  dealt  with  Hook,  the  agent, 
believing  him  to  be  a  principal,  the  plaintiffs,  who  were  undisclosed 
principals,  must  take  the  contract,  if  they  seek  to  enforce  it,  as  their 
agent  and  the  defendants  left  it.  If  they  seek  the  advantages  of  the 
contract,  they  must  suffer  its  burdens,  and  must  allow  the  defendants 
by  way  of  payment  for  the  goods  sold  and  services  rendered  to  the 
agent. 

As  to  whether  or  not  the  defendants  knew  Hook  was  acting  as 
agent,  the  agreed  statement  of  facts  is  vague  and  uncertain.  It  is 
true  that  Hook  delivered  to  the  plaintiffs  a  written,  but  unsigned, 
order.  It  is  true  that  that  order  discloses  on  its  face  that  the  plaintiffs 
were  the  principals,  and  therefore  that  Hook  was  only  an  agent.  But 
it  does  not  appear  satisfactorily,  and  we  cannot  find,  that  the  defend- 
ants saw  the  written  order  or  knew  its  contents,  or  that  they  were  in 
any  way  informed  that  Hook  was  an  agent,  and  not  a  principal.  The 
case  states  that  the  defendants  "did  give  the  order  sued  for."  But  no 
order  is  "sued  for."  The  suit  is  for  the  price  of  goods  ordered,  and 
unquestionably  the  defendants  did  give  an  order  for  the  goods.  The 
question  is  whether  they  gave  the  order  which  Hook  delivered  to  the 
])laintiffs,  and  were  so  advised  of  its  contents,  and  that  plaintiffs  were 
the  principals.  We  think  the  plaintiffs'  case  on  this  point  fails  for 
want  of  proof. 

The  ruling  of  the  court  below,  being  in  effect  to  the  contrary,  cannot 
be  sustained.     Exceptions  sustained. 


LEACH  V.  BEARDSLEE. 
(Supreme  Court  of  Errors  of  Connecticut,  1853.    22  Conn.  404.) 

Case  to  recover  the  value  of  certain  oxen  delivered  to  defendant, 
and  by  him  delivered  in  New  York  City,  together  with  one  of  his 
own,  and  sold  to  butchers.  Defendant  took  in  payment  a  twenty  day 
note,  payable  to  himself.  The  butchers  became  insolvent.  Verdict 
for  defendant.     Plaintiff  moved  for  a  new  trial. 

Church,  C.  J.  We  infer  from  the  verdict  of  the  jury,  that  the 
claim  of  the  plaintiff,  that  his  instructions  to  the  defendant  were  to 
sell  for  cash,  and  not  on  credit,  was  not  sustained  by  the  proof.  This 
leaves  the  case,  as  it  was  submitted  by  the  judge  to  the  jury,  in  the 
charge,  "that  the  implied  undertaking  of  the  defendant  was,  to  sell 
the  cattle,  in  the  usual  and  customary  manner." 

The  defendant  claimed,  that   there  was  a  well   known  usage  and 

TiTo  the  sjinio  cfrort  is  T'.aldwin  v.  Tiir-kcr.  112  I\.v.  2S2.  (\r>  S.  W.  S41,  2:5 
Ky.  Law  licp.  ir^'.S,  ',7  L.  ]l.  A.  4.">1  (I'.tni).  f'iinlainin«  an  cxlcnsivc  and  valu- 
able review  of  the  antlinrltles ;  also.  Wheeler  &  Wilson  v.  (Jlvan,  <'>."i  Mo.  Sl» 
(1S77);  irr.lton  v.  Smith.  7  N.  II.  44<>  (is.",.".);  Gorham  v.  Felker.  102  Ca.  2(iO. 
2S  S.  E.  Hi(»'j  nvit7). 


388  Tuic  AUTuouiTY  (Part  2 

custom  in  the  city  of  New  York,  where  this  sale  was  to  be  made  and 
was  made,  for  drovers  to  sell,  on  short  credit,  and  to  receive  notes, 
in  their  own  names,  for  the  price,  and  that  he  had  conformed  to  this 
custom,  in  the  sale  of  the  dcfcMulant's  cattle. 

In  the  absence  of  clear  stipulations  in  contracts,  usage  of  trade  or 
business  is  often  proved,  to  show  the  actual  intent  and  purpose  of  the 
parties,  though  not  expressed.  Such  usage  must  be  lawful  and  rea- 
sonable, and  so  certain  and  general,  in  the  place  where  the  business 
is  to  be  done,  or  the  contract  performed,  or  among  those  engaged 
in  such  business,  that  the  parties  to  the  contract  may  reasonably  be 
supposed  to  know  it,  and  to  act  in  reference  to  it.  It  such  case,  it 
may  be  taken,  that  the  usage  entered  into,  and  became  part  of,  the 
contract. 

A  general  usage,  affecting  any  branch  of  business,  furnishes  good 
evidence  of  what  is  regarded  as  right  and  reasonable,  in  that  respect, 
and  when  it  is  conformed  to,  negligence  or  misconduct  can  not  be 
imputed.  Barber  v.  Brace,  3  Conn.  9,  8  Am.  Dec.  149;  Casco  Mfg. 
Co.  V.  Dixon  et  al.,  3  Cush.  408;   Chitty,  Con.  20;   1  Sw.  Dig.  10. 

Proof  of  the  general  usage,  claimed  by  the  defendant  to  exist  in 
the  city  of  New  York,  where  the  plaintiff  intended  the  sale  of  his 
cattle  should  be  made,  furnished  strong  evidence,  that  he  not  only 
assented,  but  empowered  his  agent,  the  defendant,  to  sell  on  the 
usual  credit,  and  in  the  usual  manner.  And,  although  commission 
merchants,  in  the  absence  of  instructions  or  custom,  must  generally 
sell  for  cash,  yet,  if  there  be  an  usage  modifying  the  course  of  busi- 
ness, in  this  particular,  or  in  other  respects,  and  the  sale  is  made  in 
the  usual  and  customary  way,  the  agency  is  legally  performed.  Story 
on  Agency,  §§  60,  77,  96,  110,  189,  199,  209,  226;  2  Kent,  Com. 
622.  The  usage  here  offered  to  be  proved,  and  which  was  proved, 
was  not  to  contradict  or  control  the  terms  of  a  contract  definitely 
expressed,  as  it  would  have  been,  if  positive  instructions  to  sell  for 
cash  down,  had  been  proved;  but  only  to  show  the  extent  of  the 
duty  and  obHgation  of  the  defendant,  in  a  matter  not  thus  expressed, 
but  inferable  from  the  nature  of  the  business  in  which  the  defendant 
had  long  been  engaged,  and  the  well  known  manner  in  which  such 
business  had  been  usually  conflucted.  Usage  can  not  control  or  vary 
the  clear  and  unequivocal  stipulations  of  a  contract,  but  will  be  con- 
trolled by  them.  Taylor  v.  Briggs,  2  C.  &  P.  525 ;  Smith  v.  Wilson, 
3  B.  &  A.  728;  Blackctt  v.  Royal  Exchange  Ins.  Co.,  2  C.  &  J.  244; 
Yates  v.  Pym,  6  Taun.  446;  Glendale  Man.  Co.  v.  Protection  Ins. 
Co.,  21  Conn.  19,  54  Am.  Dec.  309;  1  Greenl.  Ev.  §  292.  The  usage 
proved  in  this  case  not  only  extended  to  a  credit  sale,  but  to  the 
manner  of  sale,  which  the  defendant  followed,  in  taking  the  note  for 
the  price  of  the  plaintiff's  cattle  and  his  own,  in  his  own  name. 

But,  if  no  custom  regarding  this  had  existed,  we  could  not  say, 
as  it  was  asked  of  the  judge  at  the  trial,  to  say,  that  the  circum- 
stances of  taking  the  note,  payable  to  himself,  would  subject  the  de- 


Ch.  1)  NATURE    AND    EXTENT  389 

fendant  to  this  loss.  The  plaintiff  was  not  injured  by  this, — the 
purchasers  failed,  before  the  time  of  credit  expired,  and  it  was  there- 
fore, immaterial,  whether  a  note  had  been  taken  or  not,  or  who  re- 
tained the  possession  of  it.  Nothing  is  more  common,  than  for 
factors  to  buy,  sell  and  sue  in  their  own  names.  If  the  isolated  fact, 
that  one  takes  a  note  in  his  own  name,  furnishes,  prima  facie  evi- 
dence, that  a  sale  was  made  on  his  own  account;  yet,  when  ex- 
plained, as  it  may  be,  and  shows  a  mere  agency, — only  a  mode  of 
doing  the  business  for  the  principal,  the  responsibilities  are  not  there- 
by varied.  Codies  v.  Gumming,  6  Cow.  181.  And  yet,  if  a  sale  be 
made,  and  a  credit  given,  without  authority,  and  a  note  taken  for 
the  price,  payable  to  the  agent  personally,  he  has  been  holden  liable 
for  the  amount.  Hemenway  v.  Hemenway,  5  Pick.  389.  And  so,  if, 
after  the  time  of  credit  has  expired,  the  agent  shall  then  give  further 
time,  by  a  note  parable  to  himself.  2  Kent,  Com.  622;  Hosmer  v. 
Beebe,  2  Mart.  (N.  S.)  368. 

In  this  opinion,  the  other  judges  concurred,  except  WaiTE),  J.,  who 
tried  the  cause  in  the  court  below,  and  was  disqualified. 

New  trial  not  to  be  granted. 


(D)   To  Collect 

CAPEL  v.  THORNTON. 
(Ck)urt  of  King's  Bench,  1828.    3  Car.  &  P.  352,  14  B.  0.  L.  605.) 

Goods  sold.  Pica — General  issue.  On  the  part  of  the  plaintiffs, 
who  were  coal  merchants,  it  appeared,  that  coals  were  delivered  by 
their  servant  at  the  house  of  the  defendant  in  Regent's  Park,  with  a 
vendor's  ticket  in  the  name  of  the  plaintiffs.  No  evidence  was  given 
of  any  order,  but  the  vendor's  ticket  was  proved  to  have  been  de- 
livered to  the  defendant's  footman ;  however,  there  was  no  proof  that 
it  ever  reached  the  defendant. 

On  the  part  of  the  defendant  it  was  proved,  that  the  defendant's  son 
had,  for  several  years,  bought  coals  of  a  person  named  Ellsworth,  who 
professed  to  sell  on  his  own  account,  but  who,  unknown  to  the  de- 
fendant and  her  son,  really  sold  on  commission.  It  further  appeared, 
that  the  defendant's  son  always  received  bills  of  parcels  in  the  name 
of  Ellsworth,  and  paifl  him  for  coals,  Ellsworth  giving  receipts  in  his 
own  name ;  and  that  being  asked  by  her  son  to  deal  with  Ellsworth, 
the  defendant  ordered  these  coals  of  him,  and  received  a  bill  of  par- 
cels in  his  name;  and  in  about  a  week  after  the  coals  were  delivered, 
she  paid  him  for  them;  however,  more  than  a  month  after  this  pay- 
ment, the  plaintiffs  sent  the  defendant  a  notice  "to  pay  the  amount  to 
them  or  their  clerk,  and  not  to  Mr.  Ellsworth." 

Lord  Tkn-TKrhkn,  C.  J.     The  plaintiffs  nnist  be  called.    There  is  no 


3i)0  Tuio  AUTiiouiTY  (Part  2 

evidence  that  the  defendant  ever  £:^ave  any  order  to  the  plaintiffs ; 
inileed  it  is  provetl,  that  tlie  dcfemhint  onl)'  dealt  with  l-'Jlsworth,  who 
is  admitted  by  the  notice  to  be  the  agent  of  the  plaintiffs  ;  and  if  he, 
as  their  agent,  had  authority  to  sell  goods,  so  had  he  (in  the  absence 
of  advice  to  the  contrary)  an  implied  authority  to  receive  the  proceeds 
of  such  sale.  The  plaintiffs  cannot  avow  the  acts  of  their  agent  as  to 
one  part  of  the  transaction,  and  repudiate  them  as  to  another  part. 
With  respect  to  the  notice,  as  the  money  was  paid  before  the  notice 
came  to  the  defendant's  hand,  that  cannot  operate  in  the  plaintiff's 
favour.  , 

Nonsuit. 


J^ 


lO^ 


HIGGINS  V.  MOORE. 

(Court  of  Appeals  of  New  York,  1S66.     34  N.  Y.  417.) 

Action  to  recover  $2,569.77,  the  price  of  a  cargo  of  rye,  sold  to 
defendant  by  a  broker  to  whom  defendant  paid  the  price.  Verdict 
for  defendant. 

Pkckiiam,  J.'^''  The  judgment  was  sustained  in  the  Superior  Court 
mainly  on  the  ground  that  a  grain  broker,  wIk)  had  never  had  pos- 
session of  the  rye  sold,  but  was  only  authorized  to  contract  for  its 
sale,  had  thereby  an  implied  authority  to  receive  the  purchase-price. 
The  court  was  not  satisfied  with  the  finding  of  fact  by  the  referee 
as  to  the  usage  of  trade,  which  allowed  a  payment  to  a  broker,  but 
did  not  set  it  aside.  I  agree  that  the  evidence  is  entirely  unsatis- 
factory to  establish  any  such  usage.  To  my  mind  it  is  utterly  insuffi- 
cient. This  court  however  has  no  authority  to  interfere  with  this 
judgment  upon  that  ground.     The  fact  as  found  is  conclusive  here. 

The  first  question  arising  here  is,  had  the  broker,  merely  as  such, 
authority  to  receive  payment?  I  think  he  had  not.  In  Baring  v. 
Corrie,  2  B.  &  Aid.  138,  Holroyd,  J.,  said :  "A  factor  who  has  the 
possession  of  goods  differs  materially  from  a  broker.  The  former 
is  one  to  whom  goods  are  sent  or  consigned.  He  not  only  has  the 
possession,  but  generally  a  special  property  in  them ;  but  the  broker 
has  not  the  possession,  and  so  the  vendee  cannot  be  deceived  by 
that,  besides  employing  a  broker  to  sell  goods  does  not  authorize 
him  to  sell  in  his  own  name." 

In  that  case  it  was  held  that  the  purchaser  from  a  broker  had  no 
authority  to  set  off  a  debt  against  the  broker,  on  the  ground  that 
the  broker  had  no  authority  to  sell  in  his  own  name.  Brokers  are 
defined  to  be  "those  who  make  contracts  between  merchants  and 
tradesmen  in  matters  of  money  and  merchandise  for  which  they  have 
a  fee."     1  Liv.  Agency,  73  (Ed.  1818). 

It  has  been  questioned  among  civilians,  says  Livermore,  whether 

"7  Part  of  the  opinion  is  omitted. 


(3h.  1)  NATURE    AND    EXTENT  391 

an  authority  to  sell  or  let  includes  an  authority  to  receive  the  price 
or  not,  and  that  Pothier  says  this  power  is  not  generally  included. 
Id.  74;  Pothier's  Traite  des  Obligations,  477.  But  that  in  some 
cases  it  will  be  presumed,  as  if  goods  are  put  into  the  hands  of  pubhc 
brokers  to  be  sold,  and  they  are  in  the  habit  of  receiving  the  price. 
Putting  the  goods  in  their  hands  implies  an  authority  to  receive  pay- 
ment. 2  Liv.  284,  285,  as  it  does  to  receive  payment  on  securities. 
3  Chit.  Com.  Law,  207,  208. 

The  general  doctrine  is,  that  a  broker  employed  to  sell  has  no 
authority  as  such  to  receive  payment.     Russ.  Fact.  &  Brokers,  48 
Law  Lib.  68-110;    Mynn  v>  Joliffe,  1  Wood  &  Rob.  326;   Baring  v. 
Corrie,  2  B.   &  Aid.   137.  j    E.xception  is  made  to  \his  general  ^^^^  LVi^Jiy-y 
in  some  cases  where  the  principal  is  not  disclosed.;  Smith  Mer.  L.   /^^T'^^'^^^ 
129,  by  Hoi.  &  Gholson ;   see,  also,  as  throwing  light  upon  this  ques-  '  ^ 

tion,  though  not  directly  in  point,  Whitbeck  v.  W^tham,  1  Sol.  157; 
Morris  v.  Cleasby,  1  M.  &  S.  576.  Story  says  an  agent  to  conclude 
a  contract  is  not,  of  course,  authorized  to  receive  payment  thereun- 
der. Story,  Agency,  §  98,  and  cases  there  cited. 
^  Where  the  person  contracting  for  the  sale  has  the  property  in  his 
possession,  and  delivers  it,  he  is  clothed  with  the  indicia  of  authority 
to  receive  payment,  especially  when  the  owner  is  not  known.     Such        j  j 

are  the  cases  referred  to  by  the  court  below.  He  is  then  clothed  with 
apparent  authority,  and  that  as  to  third  persons  is  the  real  authority. 
Capel  V.  Thornton,  3  Car.  &  P.  352;  Pickering  v.  Busk,  15  East,  38, 
ante,  p.  319.  In  the  latter  case  the  property  had  been  put  into  the  pos- 
session of  the  broker  and  the  title  in  his  name.  "The  sale  was  made  by 
a  person  who  had  all  the  indicia  of  property."     Ireland  v.  Thompson, 

4  C.  B.  149. 

Cross  v.  Haskins,  13  \'t.  536:   In  this  case,  in  the  facts  as  stated,  it- 
does  not  distinctly  appear ;  but  it  was  so  stated  in  the  syllabus  of  the 
case  by  the  reporter.     Hackney  v.  Jones,  3  Humph.  613. 

In  the  case  at  bar  however,  the  broker  never  had  possession  of  the 
rye,"  and  never  delivered  it;  but  the  plaintiffs  retained  possession 
till  they  delivered  to  the  defendant,  and  they  were  well  known  to  the 
defendant;  one  of  them  had  taken  part  in  the  negotiation  for  the 
sale,  as  owner,  in  the  city  of  New  York.  The  broker  was  simply  au- 
thorized to  make  a  contract  for  the  sale.  This  was  the  whole  of  his 
authority  in  reality,  and  he  had  no  other  or  further  apparent  au- 
thority. 
--  Irrespective  of  the  usage  found  by  the  referee  therefore  the  defend- 
ant was  not  discharged  by  a  payment  to  the  broker.  ♦  *  *  Re- 
versed.^" 

7R  As  to  rpoolpt  of  pnvinont  bv  nn  iip'iit  in   jmssosslon  of  the  good.s  sold, 
see  r.nlloy  v.  I'anlri.lK<'.  V'^^  'H-  l'^'^.  -<  N-  •'•  '^'•^  ^l"^'''')- 
TO  The  opinion  of  Wrinlit,  J.,  Is  oinillcd. 


392  Tin:  autuoiuty  (Part  2 

TT(n\\Kl^  V.  RTCE. 
(Supronio  Couit  of  (Jt'oiiiia,   1N75.     54  Gn.  52.) 

\\'arkKn,  C.  J."**  *  *  *  '['i)^^>  qiK'stion  involved  in  this  case  is 
whether  an  agent,  who  is  authorized  to  sell  certain  specific  machines 
for  his  principals,  antl  who  sells  one  on  time,  and  takes  a  note  from 
the  purchaser  thereof,  due  at  a  future  day,  payable  to  his  principals, 
and  delivers  the  note  to  them,  is  then  their  agent  to  receive  the  pay- 
ment of  the  note,  the  same  not  being  in  the  possession  of  such  agent, 
but  in  the  hands  of  his  principals.^ ^  In  other  words,  was  the  payment 
of  the  note  given  by  the  defendant  payable  to  the  order  of  Howard  & 
Soule  for  a  sewing  machine  purchased  of  their  agent,  Shaffer,  a  good 
payment  of  that  note  as  against  them,  when  made  to  Shafifer,  their 
agent,  at  his  offtce  in  Athens,  he  not  having  the  note  in  possession, 
but  promising  the  defendant  he  would  get  the  note  from  the  plain- 
tiffs and  deliver  it  up  to  him. 

The  rule  as  stated  by  Paley  on  Agency  is  well  sustained  by  au- 
thority, and  that  rule  is,  that  if  money  be  due  upon  a  written  security, 
it  is  the  duty  of  the  debtor,  if  he  pay  it  to  an  agent,  to  see  that  the 
person  to  whom  he  pays  it  is  in  possession  of  the  security,  for  though 
the  money  may  have  been  advanced  through  the  medium  of  the 
agent,  yet  if  the  security  do  not  remain  in  his  possession,  a  payment 
to  him  will  not  discharge  the  debtor.  Paley  on  Agency,  274.  Al- 
though the  defendant  in  this  case  may  have  received  the  plaintiffs' 
machine  through  the  inedium  of  their  agent,  he  promised  to  pay  them 
for  it,  and  if  he  took  the  risk  of  paying  the  agent  the  money  due  to 
the  plaintiffs  therefor,  when  he  knew  the  agent  did  not  have  his 
note,  it  will  not  discharge  him  from  its  payment  to  the  plaintiffs  un- 
less he  could  show  that  they  had  received  the  money.  Smith  on 
Mercantile  Law,  68,  thus  states  the  rule :  "Where  money  is  due 
upon  a  written  security,  such  as  a  bill  or  bond,  it  is  the  duty  of  the 
debtor,  if  he  pay  to  an  agent,  to  see  that  such  agent  is  in  possession 
of  the  security,  for  otherwise  he  will  not  be  discharged  unless  the 
money  reach  the  principal ;  not  even  though  the  agent  whom  he  pays 
may  have  been  usually  employed  to  receive  money,  for  his  non-pro- 
duction of  the  security  rebuts  the  implication  of  authority  arising 
from  such  his  employment."  The  same  principle  is  recognized  by 
Story  on  Agency,  §  98.  See  the  case  of  Williams  v.  Walker,  2  Sandf. 
Ch.  325,  in  which  the  authorities  bearing  upon  this  question  are  cited 
and  reviewed. 

80  Part  of  the  opinion  Is  omitted. 

81  For  interesting  illustrations  of  the  variations  of  situation  as  affecting  the 
right  to  pay  the  agent,  see  Law  v.  Stoke.s,  32  N.  J.  Law,  249,  90  Am.  Dec.  655 
(1807) ;  Crawford  v.  Whittaker,  42  W.  Va.  480,  26  S.  E.  516  (1890) ;  and  Butler 
V.  Dorman,  68  Mo.  298,  30  Am.  Kep.  795  (1S7S),  contaiiiiug  a  valuable  review 
of  the  authorities. 


Ch.  1)  NATURE    AND    EXTENT  393 

The  case  of  Capel  v.  Thornton,  14  E.  C.  L.  605,  ante,  p.  389, 
cited  by  the  defendant  in  error,  in  which  it  was  held  that  an  agent 
authorized  to  sell  goods  has,  in  the  absence  of  advice  to  the 
contrary,  an  implied  authority  to  receive  the  proceeds  of  such  sale, 
was  an  action  for  coals  delivered.  There  was  no  written  security 
given  therefor  in  that  case.  If  Shaffer  had  authority  to  sell  the 
plaintiffs'  machines,  as  their  agent,  he  would  have  had  the  implied 
authority  to  have  received  the  money  therefor  from  the  purchaser; 
or  if  authorized  to  sell  on  credit,  to  have  taken  the  purchaser's  note, 
payable  to  them,  as  was  done  in  this  case;  but  it  does  not  follow 
that  the  agent  had  the  authority  to  collect  that  note,  due  eight 
months  after  date,  when  it  had  been  turned  over  to  the  plaintiffs  as 
their  property  by  the  agents,  without  proof  of  any  special  authority 
to  do  so,  or  any  evidence  that  such  had  been  their  habit  and  custom, 
the  agent  not  having  the  note  in  his  possession.  We  have  given  to 
this  question  quite  a  thorough  examination,  on  account  of  the  ap- 
parent hardship  of  requiring  the  defendant  to  pay  for  the  machine 
twice,  but  we  are  well  satisfied  as  to  the  law  applicable  to  the  facts 
of  the  case,  and  feel  bound  to  enforce  the  general  rule  of  the  law 
in  this  case  as  well  as  in  all  other  cases.  This  general  rule  of  law 
will  injure  no  one  who  exercises  the  ordinary  degree  of  prudence  in 
requiring  the  production  of  his  note  before  he  pays  it.  In  our  judg- 
ment, the  court  below  erred  in  overruling  the  motion  for  a  new  trial. 

Let  the  judgment  of  the  court  below  be  reversed. 

J'- 

HAHNENFELD  v.  WOLFF." 

(Common  Pleas  of  New  York  City  and  County,  General  Term,  1895. 
15  Misc.  Rep.  133,  36  N.  Y.  Supp.  473.) 

Action  for  the  price  of  merchandise.    Defense  payment. 

BiscHOFF,  J.  It  was  conceded  by  the  defendant  that  the  sale  was 
made  to  him  through  the  instrumentality  of  one  Grimshaw,  and  it  con- 
conclusively  appeared  from  the  invoice  in  defendant's  possession,  and 
produced  by  him,  upon  which  the  alleged  payments  to  Grimshaw  were 
receipted  for  by  the  latter,  that  the  defendant,  before  such  payments, 
knew  the  plaintiff,  and  not  C^rimshaw,  to  be  his  vendor.  Grimshaw  was 
employed  by  the  idainlifT  to  soHcit  orders  from  customers,  and  did  not 
appear  to  have  been  intrusted  with  the  possession  of  the  whole  or  any 
part  of  the  merchandise  sold.  Under  these  circumstances  the  payments 
to  Grimshaw  were  made  by  the  defendant  at  his  peril  of  the  former's 

82  Accord:  Clnrk  v.  Murphy.  104  Muss.  490,  41  N.  E.  G74  (is;)r>);  Simon 
V.  .Tnlmsoii.  101  Ala.  .'iOS.  W,  .s.iutli.  401  (isl).",).  coiitaliiiiiK  a  dlsciliiiiiiatinR  re- 
view ni  (•Miillictliii:  <;is<'s:  KiiriM-maim  \.  M..iia;:liaii.  L' t  .Midi.  .'It!  (IsTIi; 
Thrown  V.  Lnlly,  79  Minn.  .38,  81  N.  W.  .'">:!S  d'KM)).  Cf.  Iloskiiis  Co.  v.  .lolmson, 
5  Suet'd,  4<iO  (l^riS).  giving  a  mucli  l)roa(ler  hcoik,'  to  the  power  of  the  selling 
agent. 


:51>-4  f  TiiK  Ai  rii(>i!iTY  (Part  2 

want  of  authority.  |  It  is  well  settled  that  an  agent  to  solicit  orders 
merely,  or  to  sell  got^ils.  who  has  not  the  possession  of  tjie  ij^oods,  has 
no  implied  or  apparent  authority  to  receive  payment.'  llii^ijins  v. 
Moore.  o4  X.  Y.  417;  McKindly'v.  Dunham,  5.=^  Wis.  515.  13  N.  W. 
485.  42  Am.  Rep.  740;  Butler  v.  Dorman.  30  Am.  Rrp.  'J'^?\  Meyer  v. 
Stone,  46  Ark.  210.  55  Am.  Rep.  'r^ll  \  Kane  v.  ^.ar^low,  42  Kan.  465, 
22  Pac.  588.  16  Am.  St.  Rep.  4^>0:  K..lin  v.  Washer,  64  Tex.  131,  53 
Am.  Rep.  745. 

Proof  of  C.rimshaw's  authority  to  collect,  cither  hy  plaintiff's  ex- 
press~difecf:r6h,  or  by  inference  from  a  course  of  dealing,  was,  there- 
fore, essential  to  the  defendant's  success  upon  the  trial  (Higgins  v. 
Moore,  supra;  Lamh  v.  Hirschberg,  1  :\Iisc.  Rep.  108,  20  N.  Y. 
Supp.  678).  and  the  absence  of  such  proof  renders  the  judgment  ap- 
pealed from  erroneous.  Judgment  reversed,  and  new  trial  ordered, 
with  costs  to  the  appellant  to  abide  the  event. 


(U)  To  Rescind 

BRADFORD  v.  BUSH. 
(Supreme  Court  of  Alabama,  1846.     10  Ala.  386.) 

Action  on  a  note  for  $500  given  in  payment  of  horses  purchased 
from  the  agent  of  plaintifif.  Upon  evidence  that  subsequent  to  the 
trade  the  agent  said  to  defendant  that  if  one  of  the  horses  was  older 
than  he  represented  he  would  take  her  back  and  allow  for  her  value  on 
the  note,  the  jury  allowed  plaintiff  only  $229.89.  Plaintiff  appeals. 

Collier,  C.  J.**'^  It  does  not  follow  that  if  a  person  is  authorized 
to  sell  property,  his  agency  continues,  so  as  to  permit  him  to  rescind 
the  sale,  or  adjust  the  damages  which  the  vendee  may  sustain  by  a 
breach  of  warranty.  The  transaction  is  complete  by  the  sale,  and  the 
rights  of  the  parties  become  vested,  the  one  in  the  thing  sold,  and  the 
other  in  the  price.  And  it  is  incumbent  upon  the  vendee,  if  he  relies 
upon  the  acts  or  declarations  of  a  third  person  as  furnishing  a  defence 
to  the  payment  of  the  purchase  money,  to  prove  that  that  person  oc- 
cupied such  a  relation  in  respect  to  the  vendor,  as  made  his  acts  and 
declarations  evidence  against  him.     *     *     * 

Reversed  and  remanded. 

««  Part  of  the  opinion  is  omitted. 


^ 


/-i^L^ 


A 


Ch.  1)  NATURE    AND    EXTENT  395 

DEXMAN  V.  BLOOMER. 

(Supreme  Court  of  Illinois,  1849.    11  111.  177.) 

Assumpsit  to  recover  money  paid  by  Denman  to  Bloomer's  agent, 
Johnson.  Johnson  had  sold  Denman  a  raft  of  lumber  on  the  Mis- 
sissippi river  and  landed  it.  Denman  thought  it  not  safely  landed,  but 
Johnson  said  he  would  insure  it.  Denman  paid  Johnson  $300  on  the 
price.  Next  morning  the  raft  was  gone  down  the  river  and  Johnson 
rescinded  the  sale  and  gave  Denman  a  draft  for  $34  on  Bloomer,  which 
Bloomer  now  refuses  to  pay. 

CaTon,  J. 8*  The  fifth  and  eighth  instructions  given  for  the  de- 
fendant, were  erroneous.  The  eighth  instruction  supposes  that  Bloom- 
er was  the  owner  of  the  raft,  and  that  Johnson  was  his  agent  to  sell 
it,  and  receive  the  purchase  money.  The  jury  were  then  instructed, 
that  if  Johnson  had  sold  and  delivered  the  raft  to  Denman,  and  re- 
ceived a  part  of  the  purchase  money,  he  had  no  authority  to  rescind 
je  sale,  and  make  Bloomer  liable  for  the  money  thus  received. 

An  agent  appointed  for  a  special  purpose — to  transact  a  particular 
business,  cannot  go  beyond  the  scope  of  such  an  appointment,  and 
bind  his  principal ;  nor  can  he  act  after  such  employment  ceases,  by 
his  having  completed  and  closed  up  the  business,  to  transact  which  he 
was  constituted  an  agent;  but  within  the  scope  of  such  employment, 
and  until  the  power  conferred  is  thus  exhausted,  or  has  been  revoked, 
the  agent  can  bind  the  priBicipal,  to  the  same  extent  that  the  latter 
could  have  bound  himself.  I  In  this  case,  Johnson's  powers  had  not 
terminated  by  his  having  completed  the  business  confided  to  him.  He 
had  sold  the  raft,  it  is  true,  but  he  had  received  only  a  part  of  the 
purchase  money,  wliile  his  employment  required  him  to  collect  the 
whole.  To  deny  the  authority  of  the  agent  to  take  back  the  raft,  while 
the  transaction  was  thus  incomplete,  would  often  prove  most  detri- 
mental to  the  principal.  /  Suppose  the  agent  had  discovered  that  Den- 
man was  insolvent,  and  pat,  in  all  probability,  the  balance  of  the  pur- 
chase money  would  be|lost,  atithority  to  rescind  the  sale,  and  take 
back  the  raft,  would  have  bceA  indispensable  to  entitle  him  to  pro- 
tect the  interest  of  the  jjrincipal.i 

This  is  not  so  strong  a  casa  as  that  of  Anderson  v.  Coonley,  21 
Wend.  279.  There  the  agent  was  authorized  to  contract  for  barley, 
and  it  was  held,  that  he  might  rescind  a  contract  which  he  had  made, 
so  long  as  his  authority  to  make  other  purchases  still  continued.  The 
case  of  Bradford  v.  Bush.  10  Ala.  386,  does  not  conflict  with  the  prin- 
ciples above  laid  down,  or  with  the  case  referred  to.  There  the  agent 
was  authorized  to  sell  some  hor.ses,  which  he  disposed  of  to  the  de- 
fendant, and  received  other  property,  and  a  note,  in  payment.  It  was 
held  that  the  agent  could  not,  at  a  subsequent  time,  bind  his  principal, 

««  r.'irt   of   tllO  npillinli    Is   OlllittCll. 


396  TiiK  AUTiu)i;ri'i-  (Part  2 

by  a  new  agroomcnt,  to  make  good  a  defect  in  some  of  the  horses. 

Clearly,  in  this  case,  the  powers  of  the  agent  were  exhausted,  and  his 

authority  terminated.  The  case  before  us,  however,  was  very  different. 
Y~  The  agent  had  but  partially  completed  the  transaction,  when  he  thought 
'  proper  to  rescind  what  had  been  done;  and  in  doing  this,  we  think  he 
'      acted  within  the  scope  of  the  aulhorily,  which  the  instruction  supposes 

was  conferred  upon  him,  and  perhaps  for  the  best  interests  of  his 

principal.^'     *     *     * 
Reversed  witli  costs. 


III.  To  Sell  Real  Estate 

(A)  In  General 

MARR  V.  GIVEN. 
(Supreme  Judicial  Court  of  jNIaine,  1843.    23  Me.  55,  39  Am.  Dec.  600.) 

Writ  of  entry.  Given  bought  a  farm,  giving  a  mortgage  back.  Suit 
and  entry  had  been  made  to  foreclose.  To  save  the  place,  Given  gave 
to  Moody  a  power  of  attorney  under  which  he  made  a  quitclaim  deed 
from  Given  to  Rufus  IMarr.  The  latter  paid  the  mortgage,  saying  that 
Given  could  have  the  place  back  by  paying  back  the  money,  but  he  had 
not  done  so.  Henry  IMarr,  claiming  under  quitclaim  to  Rufus  Marr, 
brings  this  action  against  Hannah,  the  wife  of  John  Given. 

Shepley,  J.  The  intentions  of  the  parties  are  to  be  regarded  in 
the  construction  of  the  power  of  attorney  from  John  Given  to  Elias 
Moody.  It  is  not  necessary,  that  a  power  to  convey  lands  should  be 
expressly  delegated.  It  may  be  imparted  by  implication.  Com.  Dig. 
Poiar,  A.  2.  Moody  was  authorized  "to  bargain,  sell,  grant,  release, 
and  convey" ;  "and  upon  such  sale  or  sales,  convenient  and  proper 
deeds,  with  such  covenant  or  covenants,  general  or  special,  of  war- 
ranty, quitclaim,  or  otherwise,  as  to  my  said  attorney,  shall  seem  ex- 
pedient, in  due  form  of  law,  as  my  deed  or  deeds,  to  make,  seal,  de- 
liver, and  acknowledge."  The  power  of  attorney  is  silent  as  to  what 
he  was  to  sell  and  convey.  The  language  used  was  appropriate  to  the 
sale  and  conveyance  of  real  estate  according  to  the  forms  in  use  in  this 
part  of  the  country,  and  not  usual  in  the  sale  and  conveyance  of  per- 
sonal property. 

The  power  is  sufficiently  broad  to  authorize  the  agent  to  sell  and 
convey  whatever  estate  Given  might  then  own.  And  it  would  seem  to 
be  necessary  to  permit  it  to  have  that  effect,  or  to  decide,  that  it  was 
wholly  void.     Aloody,  by  virtue  of  it,  claimed  the  power  to  convey  the 

85  The  power  of  an  agent  authorized  to  sell  mafhinery  to  take  back  the 
machine  if  it  does  not  work  is  discussed  in  Ostor  v.  Mickley,  o.'j  Minn.  245,  28 
N.  W.  710  (188G).  See,  also,  Butler  v.  Dorman,  G8  Mo.  298,  30  Am.  Rep. 
795  (1878J. 


1/ 


Lt 


Ch.  1)  NATURE    AND    EXTENT  397 

right  in  equity  to  redeem  the  estate,  which  Given  had  before  conveyed 
in  mortgage  to  Brinley,  and  made  a  conveyance  of  it  to  Marr,  who 
caused  it  to  be  recorded,  and  entered  into  possession  of  the  greater 
portion  of  the  estate,  and  has  continued  to  possess  it  without  interrup- 
tion ior  nearly  twenty  years.  Given,  during  all  that  time,  has  never 
denied,  that  Moody  was  fully  authorized  to  sell,  has  never  claimed 
any  interest  in  the  land,  and  does  not  now  claim  any.  The  defendant 
was  instrumental  in  procuring  the  conveyance  to  be  made  to  Marr  un- 
der that  power,  and  in  inducing  him  to  advance  the  money  due  upon 
the  mortgage,  and  does  not  therefore  place  herself  in  a  position  to 
claim  such  a  limited  construction  of  the  power,  as  will  wholly  defeat 
it,  and  deprive  Marr  of  the  land.  She  must  be  regarded  as  a  stranger 
to  the  title.  The  language  used  in  the  power  and  explained  by  the 
conduct  of  the  parties  for  so  long  a  period  authorizes  the  conclusion, 
that  it  was  their  intention  to  authorize  a  sale  and  conveyance  of  all 
the  rights  of  Given  in  any  real  estate.®' 
Judgment  for  demandant. 


McCULLOUGH  v.  HITCHCOCK. 
(Supreme  Court  of  Errors  of  Connecticut,  1899.     71  Conn.  401,  42  Atl.  81.) 

Action  for  specific  performance  of  a  contract  for  the  sale  of  land 
purporting  to  be  made  by  defendant  by  Anderson  &  Mead,  his  agents. 
Defendant  had  written  them  saying  he  would  like  to  sell  if  he  could 
do  so  to  advantage,  but  as  he  had  no  knowledge  of  the  value  he  would 
like  to  have  them  give  him  an  idea  of  the  value  and  find  a  purchaser. 

Andrews,  C.  J.  Anderson  &  Mead  had  no  authority  to  make  a  writ- 
ten contract  binding  on  the  defendant  to  convey  the  land  in  question, 
unless  it  can  be  found  in  the  letter  of  November  23,  1896.  That  letter 
does  not,  in  terms,  purport  to  give  any  such  authority.  The  contention 
of  the  plaintiff  is  that  such  authority  is  implied  from  the  request  in  the 
letter  to  find  a  purchaser ;  that  it  is  a  custom  of  the  real  estate  business 
that  a  broker  authorized  to  find  a  purchaser  for  lands  may  sign  a  bind- 
ing contract  for  the  sale  of  that  land.  We  do  not  understand  any  such 
custom  to  exist  in  this  state.  A  custom  can  exist  only  as  a  matter  of 
fact.  Smith  v.  Phipps,  65  Conn.  307,  32  Atl.  367.  There  is  no  finding 
that  any  such  cust<jni  prevails  in  Connecticut,  and  there  is  no  case  cited 
which  recognizes  any  such  rule. 

A  real  estate  broker  or  agent  is  one  who  negotiates  the  sales  of 
real  property.     His  business,  generally  speaking,  is  only  to  find  a  pur- 

««roiiii.nre  Bosspau  v.  O'l^ripn.  4  Hiss.  .'?9r>.  Fed.  Cas.  No.  l.nCT  (isn9i.  in 
whifh  the  fonrt  hoUls  that  authority  to  an  agent  to  sell  real  estate  innsl  be 
clfjir  Mini  (listiiut.  of  siicli  rliMijictiT  fhiit  II  fair  and  candid  imtsoh  nnist  see 
wltiiniif  licsilation  tliat  the  iiutliority  is  Kivcn.  An  answer  to  an  ak'cnl,  "I 
will  sfll"  on  terms  sp<'fifled,  kIvos  tlif  \\v.v\\\  no  aiitliorlty  to  make  a  contract 
of  sale,  evon  on  lliosc  lonna.  P.y  comiiion  law  the  power  fo  convey  must  be 
under  sf-al.     IIcilli  v.  Nutter,  .-.o'Mc  riTS  (IWL'),  anio,  p.  KM. 


,  *^-<.  \ 


:^08  Tin:  AiriioKiTY  (Part  2 

chaser  wlio  is  willinc^  to  l)uy  the  laml  \\\Km  llic  terms  fixccl  by  the 
owner.  vHe  has  no  authority  to  liind  tjie  prineijial  by  signing  a  con- 
tract of  sale."'  A  sale  of  real  estate  involves  the  adjustment  of  many 
matters  besides  tlie  fixing  of  the  price.  The  delivery  of  the  posses- 
sion has  to  be  settled  ;  generally  the  title  has  to  be  examined  ;  and  the 
conveyance,  with  its  covenants,  is  to  be  agreed  upon  and  executed 
by  the  owner.  All  of  these  things  require  conferences,  and  time  for 
completion.  These  are  for  the  determination  of  the  owner,  and  do 
not  pertain  to  the  duties,  antl  are  not  within  the  authority,  of  a  real 
estate  agent.  For  these  obvious  reasons,  and  others  which  might  be 
suggested,  it  is  a  wise  provision  of  the  law  which  withholds  from 
such  an  agent,  as  we  think  it  does,  any  implied  authority  to  sign  a 
contract  of  sale  in  behalf  of  his  principal.  Coleman  v.  Garrigues. 
18  Barb.  60;  Roach  v.  Coe,  1  E.  D.  Smith,  175;  Lindley  v.  Keim,  54 
N.  T.  Eq.  418-423.  34  Atl.  1073;  Dufify  v.  Hobson,  40  Cal.  240,  6 
Am!  Rep.  617 ;  4  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  964,  note ;  3  Waite, 
Act.  &  Def.  286,  287;  Halsey  v.  Monteiro,  92  \^a.  581,  24  S.  E.  258; 
Armstrong  v.  Lowe,  76  Cal.  616,  18  Pac.  758. 

There  is  no  error.     The  other  judges  concurred. 


CARSTENS  V.  McREAVY. 

(Supreme  Court  of  Wu.shington,  1890.     1  Wash.  .'JHO.  2.5  Pac.  471.) 

Action  to  compel  specific  performance  of  an  alleged  agreement  to 
convey  two  lots  in  the  city  of  Seattle. 

Stiles,  J.^®  *  *  *  /pi-jg  appellant  was  the  owner  of  certain 
real  property  in  the  city  of  Seattle,  and  the  court  found  that,  at  a 
certain  date,  agents  named,  who  were  real-estate  agents  in  Seattle, 
"were  the  agents  of  defendant  for  the  sale  of  the  aforesaid  real  estate, 
and  were  then  and  there  duly  authorized  and  empowered  by  the  de- 
fendant, by  writing  under  the  defendant's  hand,  to  make  and  nego- 
tiate a  sale  of  said  real  estate."  The  agents,  thus  authorized,  executed 
and  delivered  to  the  appellee  a  contract  for  the  sale  of  the  appel- 
lant's property,  w-ithout  his  knowledge,  and  in  his  absence  from  the 
state,  and  received  a  portion  of  the  purchase  money.  Appellant  re- 
fused to  recognize  the  contract  thus  made,  claiming  that  the  authority 
by  him  given  to  "sell"  did  not  include  the  authority  to  execute  a  con- 
tract, or  anything  more  than  to  find  a  purchaser.  This  was  the  vital 
point  in  the  case,  upon  which  the  court  held  with  the  appellee,  and 
directed  that  the  contract  thus  made  be  performed. 

The  statute  of  frauds  may  be  satisfied  by  the  execution  of  a  con- 

87  For  an  interesting  discussion  of  the  powers  of  factors  and  brokers,  and 
of  the  consequent  restrictions  of  the  powers  of  real  estate  brokers,  see  Davis 
V.  Gordon,  87  Va.  559,  13  S.  E.  35  (1891). 

8*»  Part  of  the  opinion  is  omitted. 


Ch.  1)  NATURE    AND    EXTENT  309 

tract  for  the  sale  of  lands  by  the  hand  of  another  person  than  the 
party  to  be  charged,  if  that  person  be  thereunto  lawfully  authorized, 
and  it  is  well  settled  that  such  third  person  may  be  thus  lawfully  au- 
thorized orally,  by  written  direction  not  under  seal,  and  even  by  a 
course  of  conduct  amounting  to  an  estoppel.  It,  therefore,  only  re- 
mains to  determine  whether  the  ordinary  real-estate  agent  or  broker, 
authorized  to  sell  land,  is  thereby  empowered  to  enter  into  a  contract 
binding  upon  his  principal,  in  an  action  for  specific  performance.^^ 
A  real-estate  agent  is  a  person  who  is,  generally  speaking,  engaged 
in  the  business  of  procuring  purchases  or  sales  of  lands  for  third  per- 
sons, upon  a  commission  contingent  upon  success.  He  owes  no  affirm- 
ative duty  to  his  client,  is  not  liable  to  him  for  negligence  or  failure. 
and  may  recede  from  his  employment  at  will,  without  notice.  On  the 
other  hand,  courts  almost  unanimously  unite  in  holding  that  in  case 
of  an  ordinary  employment  to  sell-,  when  he  has  procured  a  party  able 
and  willing  to  buy  upon  the  terms  demanded  by  his  principal,  and 
has  notified  him  of  the  purchaser's  readiness  to  buy,  the  agent's  work 
is  ended,  and  he  is  entitled  to  his  commission.  It  is  not  his  duty  to 
procure  a  contract,  or  to  make  one,  and  he  is  not  in  default  if  he 
fails  to  do  either.  Therefore,  to  our  minds,  it  seems  clear  that,  or- 
dinarily, it  is  not  within  the  contemplation  of  the  owner  and  agent, 
where  property  of  this  character  is  placed  in  the  hands  of  the  latter 
for  sale,  that  he  shall,  without  consultation  with  his  client,  execute 
a  contract. 

We  are  aware  that  courts  have  held  to  this  extent,  basing  their  de- 
cisions upon  a  distinction  between  an  authority  to  sell  and  an  au- 
thority to  find  a  purchaser,  and  upon  the  well-known  rule  that  an 
authority  to  an  agent  to  do  a  thing  is  presumed  to  include  all  the 
necessary  and  usual  means  of  executing  it  with  efifect.  But  such  hold- 
ings do  not  commend  themselves  to  our  judgment,  and  as  this  is  a 
new  question  in  this  state,  and  we  are  satisfied  that  it  is  not  the  gen- 
eral practice  of  agents  to  make  such  contracts,  we  do  not  hesitate 
to  dissent  from  the  decisions  above  mentioned,  especially  as  there  is 
no  lack  of  authority  for  the  position  we  take.  We  cannot  shut  our 
eyes  to  the  obvious  defect  in  the  argument  that  authority  to  sell,  in 
this  instance,  necessarily  im])lics  authority  to  execute  a  contract.  A 
sale  of  land  "executed  with  effect"  includes  the  execution  of  a  deed, 
and  the  delivery  of  possession,  neither  of  which  the  agent  can  do, 
unless  his  authority  to  sell  is  supplemented  by  the  delivery  of  posses- 
sion to  him,  and  a  power  of  attorney  to  convey;  so  that  he  does  not, 
although  in  possession  of  the  authority  to  "sell,"  have  all  the  neces- 
sary means  of  executing  that  authority  with  final  efi'cct.  He  stops 
short  somewhere,  and,  when  we  are  iiu|uiring  where  the  probable  and 

"0  Spc  Dnffy  v.  Ilnltson,  40  Ciil.  L'Ki,  <",  Am.  Hop.  (117  (ISTO);  Armstroiii:  v. 
Lowp.  70  ("ill.  CIC.  IS  I'ac.  7'>H  (IKSSi ;  S.ull.v  v.  lUuik.  ."i  Wiisli.  ISL'.  2.s  I'jic 
5ri<}  (ISOl);    Miliio  V.  Kiel),  44  N,  J.  Eq.  37S,  14  Afl.  M(\  (ISSS).  contniiiliiK'  a  rv- 

\if,\-    ipf    tile    CM^i'S. 


400  Tin:  autuoiuty  (Part  2 

proper  place  of  his  stoppage  is,  the  evils  that  would  adend  the  exten- 
sion of  his  actnal  authority,  beyond  the  finding  of  a  purchaser,  fur- 
nisii  ample  reasons  for  fixing  his  limit  there. 

An  agency  of  this  kind  may  be  created  by  the  slightest  form  of 
words,  without  any  writing,  leaving  it  to  litigation  to  determine 
whether  the  substance  of  the  authority  is  "to  sell,"  or  "to  find  a  pur- 
chaser," wherein  the  unscrupulous  and  dishonest  agent  would  be  at 
once  arrayed  as  the  principal  witness  against  his  client,  with  every 
advantage  from  some  note,  "made  at  the  time,"  of  what  the  instruc- 
tion was.  Perjury  would  go  at  a  premium  in  such  cases,  and  the 
confiding  and  unlettered  would  be  its  victims.  Scarcely  any  man, 
when  listing  his  property  with  a  real-estate  agent,  stops  to  give  de- 
tails, either  as  to  the  property  itself  or  as  to  the  arrangements  he 
desires  to  make,  yet  no  one  would  sell  upon  equal  terms  to  a  first- 
class  business  man,  and  to  an  habitual  drunkard,  or  well-known  in- 
solvent; and  the  ordinary  owner  would  not  sell  at  all  to  a  person 
whose  very  occupancy  would  tinge  the  neighborhood  with  a  bad  re- 
pute. These  are  good  reasons,  and  are  probably  some  of  the  reasons 
why  custom  and  the  law  have  made  it  not  necessary  that  real-estate 
agents  should  actually  procure  contracts  in  order  to  earn  their  com- 
pensation, and  why,  in  this  connection,  the  common  understanding 
of  the  phrase  "authority  to  sell"  means  only  authority  to  find  a  pur- 
chaser, whether  the  authority  be  given  orally,  or  by  written  request. 

In  considering  this  case,  we  have  examined  the  numerous  authori- 
ties cited  by  both  sides,  as  well  as  many  others,  and  find  the  position 
we  take  fully  sustained  by  Morris  v.  Ruddy,  20  N.  J.  Eq.  236;  Milne 
V.  Kleb,  44  N.  J.  Eq.  378,  14  Atl.  646;  Duffy  v.  Hobson,  40  Cal.  240, 
6  Am.  Rep.  617;  Armstrong  v.  Lowe,  76  Cal.  616,  18  Pac.  758; 
Mechem,  Ag.  §  966;  Warvelle,  Vend.  213 ;  2  Amer.  &  Eng.  Enc.  Law, 
p.  573,  note  2.  The  earlier  cases  in  New  York  were  to  the  same  ef- 
fect, notably  Coleman  v.  Garrigues,  18  Barb.  60,  and  Glentworth  v. 
Luther,  21  Barb.  145 ;  but  they  were  overthrown  by  Haydock  v.  Stow, 
40  N.  Y.  363,  without  sufficient  reason,  as  it  seems  to  us.  We  note 
that  in  nearly,  if  not  all,  the  states  where  the  courts  at  any  time  held 
agents  to  sell  real  estate  authorized  to  execute  contracts  of  sale,  es- 
pecially in  New  York  and  Illinois,  the  legislatures  very  soon  after 
amended  the  statutes  of  frauds,  so  as  to  require  the  agent's  authority 
to  contract  to  be  in  writing. 

Lyon  V.  Pollock,  99  U.  S.  668,  25  L.  Ed.  265,  presents  a  state  of 
facts  not  found,  to  any  extent  whatever,  in  the  case  at  bar,  and  is 
therefore  not  applicable,  and  the  same  may  be  remarked  of  Ruten- 
berg  V.  Main,  47  Cal.  213.  What  a  broker  must  do  to  "complete  a 
sale"  is  well  defined  in  McGavock  v.  Woodlief,  20  How.  227,  15  L. 
Ed.  884,  thus :  "The  broker  must  complete  the  sale ;  that  is,  he  must 
find  a  purchaser  in  a  situation,  and  ready  and  willing,  to  complete 
the  purchase  on  the  terms  agreed  on,  before  he  is  entitled  to  his  com- 


Ch.  1)  NATURE    AND    EXTENT  401 

mission."  Per  contra,  if  the  broker  has  "completed  the  sale"  so  as  to 
be  entitled  to  his  commissions,  by  finding  a  purchaser,  without  a  con- 
tract, his  duty  is  thereby  performed,  and  his  authority  exhausted. 
The  judgment  of  the  court  below  must  be  reversed,  and  the  action 
dismissed;    costs  to  appellants. 


LYON  V.  POLLOCK.  y   -■ 

(Supreme  Court  of  the  United  States,  1878.    99  U.  S.  668,  25  L.  Ed.  265.) 

Action  in  equity  to  compel  conveyance  by  Lyon  of  land  sold  to  Pol- 
lock by  Lyon's  agent.  Lyon,  who  was  a  Union  man  during  the  Civil 
War,  had  left  Texas. 

Mr.  Justice  Field,  after  stating  the  case,  delivered  the  opinion  of 
the  court. 

This  case  turns  upon  the  construction  given  to  the  letter  of  Lyon 
to  Paschal,  of  the  24th  of  August,  1865.  That  letter  clearly  did  not 
authorize  the  execution  of  a  conveyance  by  Paschal  in  the  name  of 
Lyon  to  the  purchaser.  Its  insufficiency  in  that  respect  was  authori- 
tatively determined  in  the  action  at  law  for  the  lands;  the  instru- 
ment executed  by  Paschal  as  the  deed  of  Lyon  being  held  inoperative 
to  pass  the  legal  title.  The  question  now  is,  was  the  letter  sufficient 
to  authorize  a  contract  for  the  sale  of  the  lots?  To  determine  this, 
and  give  full  effect  to  the  language  of  the  writer,  we  must  place  our- 
selves in  his  position,  so  as  to  read  it,  as  it  were,  with  his  eyes  and 
mind.  It  appears  from  his  answer,  as  well  as  his  testimony,  that  he 
was  in  great  danger  of  personal  violence  in  San  Antonio,  shortly  after 
the  commencement  of  the  rebellion,  owing  to  his  avowed  hostility  to 
secession,  or  at  least  that  he  thought  he  was  in  such  danger.  He  ap- 
prehended that  his  life  was  menaced,  and  was  in  consequence  induced 
to  flee  the  country.  He  possessed  at  the  time  a  large  amount  of  prop- 
erty, real  and  personal,  in  San  Antonio.  This  he  confided  to  the  care 
of  his  partner,  Bennett,  to  whom  he  gave  a  power  of  attorney,  au- 
thorizing him  to  take  charge  of  and  control  the  same,  and  sell  it  for 
whatever  consideration  and  upon  such  terms  as  he  might  judge  best, 
and  execute  all  proper  instruments  of  transfer;  and  also  to  collect 
and  receipt  for  debts  due  to  him.  P.cnnctt  took  possession  of  Lyon's 
property  and  managed  it  until  July,  1865,  when  he  transferred  it, 
with  the  business  and  papers  in  his  hands,  to  Paschal,  and  at  once 
informed  Lyon  by  letter  of  the  transfer.  It  was  under  these  circum- 
stances that  the  letter  of  Lyon  to  Paschal,  which  is  the  subject  of  con- 
sideration, was  written.  Its  language  is:  "I  wish  you  to  manage 
[my  property]  as  you  would  with  your  own.  If  a  good  opportunity 
offers  to  sell  every  thing  I  have,  I  would  be  glad  to  sell.  It  may  be 
parties  will  come  into  San  Antonio  who  will  be  glad  to  purchase 
my  gas  stock  and  real  estate."  .^      ^i 

UouD.rK.&  A.— liO  y     .  /         / 

/  /  S 


402  'I'lii;  Ari'iioitiTY  (I'arl  L* 

Situatotl  as  Iaou  then  was,  a  fui^itivc  from  the  stale,  it  could 
hardly  iiave  hoeti  intended  hy  him  that  it'  i)n)i)ositions  to  purchase  his 
property  or  any  part  of  it  were  made  to  Paschal,  they  were  to  be  com- 
municated to  him.  and  to  await  his  ajiiM-oval  before  beintj  accepted. 
He  was  at  the  time  at  Monterey,  in  Mexico,  and  communication  by 
water  between  that  place  and  San  Antonio  was  infretpient  and  un- 
certain; -and  he  states  himself  that  it  was  impossible  to  send  letters 
by  Matamoras,  as  the  road  wms  blockaded.  Writing  under  these  cir- 
cumstances, we  think  it  clear  that  he  intended  by  his  language,  what 
the  words  naturally  convey,  that  if  an  opportunity  to  sell  his  prop- 
erty presented  itself  to  Paschal,  he  should  avail  himself  of  it  and 
close  a  contract  for  its  sale. 

His  subsequent  conduct  shows,  or  at  least  tends  to  show,  that  such 
was  his  own  construction  of  the  letter,  and  that  he  approved,  or  at 
least  acquiesced  in,  the  disposition  made  of  his  property.  He  must 
have  been  aware,  from  the  laws  of  the  state,  which  he  is  presumed  to 
have  known,  that  taxes  were  leviable  upon  his  property,  and  that 
unless  they  were  paid  the  property  would  be  sold  for  their  payment ; 
yet  he  confessedly  took  no  steps  from  1865  to  1873  to  meet  them, 
and  thus  prevent  a  forced  sale  of  his  property;  a  course  perfectly 
natural  if  it  be  conceded  that  the  property  was  in  charge  of  an  agent, 
with  power  to  manage  and  sell  it  as  his  judgment  might  dictate.  His 
indifference,  also,  after  rumors  reached  him  that  a  sale  of  his  prop- 
erty had  been  made  by  Paschal  in  1867,  can  scarcely  be  explained  upon 
any  other  hypothesis.  The  same  may  be  said  of  his  inattention  to 
the  payment  of  the  assessments  upon  his  stock  in  the  San  Antonio 
Gas  Company,  of  which  he  had  received  intimations.  From  the  time 
Paschal  took  charge  of  his  property,  in  1865  to  1873,  a  period  of  eight 
years,  he  certainly  manifested,  if  his  own  story  be  accepted,  a  most 
extraordinary  want  of  interest  in  regard  to  his  real  property,  of  great 
value,  situated  in  an  unfriendly  community,  subject  to  taxation,  and 
liable  to  be  sold  if  the  taxes  were  not  promptly  paid ;  and  also  in 
regard  to  his  personal  property,  consisting  of  shares  in  the  San  An- 
tonio Gas  Company,  of  great  value,  liable  to  assessments,  and  to  sale 
if  the  assessments  were  not  paid  when  due.  It  is  much  more  rea- 
sonable to  suppose  that  he  knew  of  the  sales  made  of  the  real  prop- 
erty and  of  the  assessments  on  the  shares,  and  that  he  was  undis- 
turbed by  the  reports  wdiich  reached  him,  because  be  considered  that 
the  sales  w'ere  made  and  the  assessments  paid  from  the  proceeds,  by 
his  authorized  attorney. 

The  testimony  of  Bennett  tends  also  to  corroborate  this  view.  He 
states  that  he  knew  from  his  correspondence  with  Lyon  that  he  treat- 
ed Paschal  as  his  agent  for  the  sale  of  his  property.  The  conduct 
of  Lyon,  as  expressive  almost  as  any  language  which  he  could  use, 
cannot,  of  course,  change  the  construction  to  be  given  to  the  words 
contained  in  his  letter  to  Paschal,  but  it  tends  to  strengthen  the  con- 
clusion as  to  the  intention  of  the  writer. 


Tenfold  v.  .7°rner« 
!ts: 

HusbPnd  ?^nd  wife  g^ve  power  of  atty,  to 
)n  to   sell  ptnj   and  p11  re^l  est'^te  belonging  to 
lem  at  the  time.  In  1888,  Husb.  ruit claimed  l°nd 
>  wife,  and  shortly  thereafter  died.  In  1890  son 
I  ^tty,  for  mother  conveyed  the  l«nd,  except  smoll 
)rtion,  to  r)tf.,  for  cons.,  by  w«rr°nty  deed. 
L  1891,  wife  uitclairaed  l^nd ,  except  sm^ll  port- 
m  to  def,  '  tf .  brought  ejectment.  V.  for  def.: 
;f.  ^ppe^^led. 
irt: 

Title  of  l^nd  w«s  vested  in  hus .  ^t  time  oi 
v^.nr^  -power  o-P  '■'t^^.  ".'ife  h«d  no  title,  excent 
>ver  riffht.  ?owerF  of  atty.  must  be  strictly  con- 
;ried  «^nd  c«nnot  be  enl^r^ed  by  construction. 
me%  the  -newer  of  '^tty.  here  conferred  no  greater 
[^■"'^r'ty  th'n  to  convey  the  wife'??  66t>d^  right  of 
\^^r   yn.   p  d^ed  w?ereby  her  husband's  titleshould 
»  c"»nveyed.  As  the  title  then  stood,  Dtf.  h'^d  no 
fft  'n   t-e  ^remlFe?:. 

\rERDICT  FOK  DEP. 


•  •tenx^V/  .V  Blo^ne 


0^  Srti^noled   ©;t^^aa  I^ei  llf*'  bxiB  y^ap^  lies     o^ 
a..,  r    ^^  -  x'^Iod^li;^    .cTsuil  ,8881  nl   .efni;t    orf;t    ^b  -^^ 
L   III   .belfc  ie;rl'^©i©r{;t   ^I^tiorfa   bxiR   ,8^jl 
£I«ma   j^geoxa    ,bnfl   ed^   ba^javnoo   larf^Jofn  io^    .'^;tl*^ 

-liocT  Il^ffia   *qaoxe    ,  5g'^I   JbomlAlottixf     aliw  ,1981 
.'.lafc   10^    •V   •  :tnafndoa(;a   in-gssozd   .^j"  '    ,1:©fe    o^ 

:* 
to   amirt    ^^    .ayfr  ni    6a:taav  a^^w  E)rf*».r  ^o   aI:tiT 

tcraoxa    ,el;ti;t   on  &=^rf'aHv:   •■7;;t*^  'to  lawc"^  -^r  f 

-floo  ■<iI;toiT;t3   ecf   ctaum   .vJiB  lo   ?!iawo1   .^rf^ii  '' 

•  no  lit  out;?  en  0  0   -^cf   ba^t'^Ina   aH"   ^onn^o   bn'^    ^p' 

i©:t?>.©'i§   on   Baiiatnoo   aiarf  \\i^:i^  \o  la'-vocr   ari\1    <• 

xo   :^ff:gii   aatrod   Ji'a^iw  erfit 'v.avnoo   ocf   n^rfit   7;J^^f^ 

'      '  ''        '       '  larf  Y*^®"!®"^^   6ae5    '^  n.^    '■ 

iit    al;t.fi    ©rf;t    aA    ,  ba^avr ' 
•  3»'?inTa'xrr   arCt   r 
.ii3a  JIG'S   TOiaHP/ 


Ch.  1)  NATURE    AND    ENTENT  403 

Holding  the  letter  to  confer  sufficient  authority  to  contract  for  the 
sale  of  Lyon's  real  property  in  San  Antonio,  there  can  be  no  doubt 
of  the  right  of  the  complainants  to  the  relief  prayed.  The  deed  exe- 
cuted to  them  by  Paschal  in  the  name  of  Lyon,  though  invalid  as  a 
conveyance,  is  good  as  a  contract  for  the  sale  of  the  property  de- 
scribed in  it ;  and  is  sufficient,  therefore,  to  sustain  the  prayer  of  the 
bill  for  a  decree  directing  Lyon  to  make  a  conveyance  to  them  and 
enjoining  the  enforcement  of  the  judgment  at  law."** 

Decree  affirmed. 


PEN  FOLD  V.  WARNER. 

(Supreme  Court  of  Michigan,  ISO.'J.     U6  Mich.  179,  55  N.  W.  GSO,  ."5  Am.  St. 

Rep.  591.) 

Hooker,  C.  J.  John  W.  Zimmerman,  being  the  owner  of  a  parcel 
of  land  in  Frankfort,  Benzie  county,  ^Nlich.,  joined  with  his  wife. 
Barbara  E.  Zimmerman,  in  a  power  of  attorney  to  their  son,  IVIorris 
M.  Zimmerman.  This  was  duly  acknowledged  and  recorded.  In 
1888,  John  W.  Zimmerman  quitclaimed  the  premises  to  his  wife,  Bar- 
bara, and.  shortly  after,  died.  In  1890,  Morris  W.  Zimmerman,  as 
attorney  for  Barbara  Zimmerman,  conveyed  the  premises,  except  the 
west  100  feet,  to  the  plaintiff,  for  a  valuable  consideration,  by  war- 
ranty deed.  In  September,  1891,  Barbara  E.  Zimmerman  quitclaimed 
the  premises,  except  the  west  50  feet,  to  the  defendant.  Plaintiff 
brought  ejectment.  Judgment  being  rendered  in  favor  of  the  defend- 
ant, the  plaintiff  appealed. 

This  power  of  attorney  was  given  by  husband  and  wife  at  the 
time  when  the  title  to  the  real  estate  in  (|uestion  was  vested  in  him, 
and  his  wife  had  no  title  to  any  lands,  aside  from  her  inchoate  right 
of  dower  in  this  parcel.  Counsel  argue  from  these  facts  that  the  lan- 
guage of  the  power  should  be  construed  to  cover  lands  subsequently 
acquired,  while  on  the  other  hand  it  is  contended  that  this  power  of 
attorney  conferred  no  greater  authority  than  to  convey  her  right  of 
dower  in  a  deed  whereby  her  husband's  title  should  be  conveyed. 

We  are  impressed  by  the  importance  of  certainty  in  instruments 
authorizing  the  conveyance  of  lands,  and  by  the  serious  consecjuences 
likely  to  arise  if  it  be  determined  that  a  power  of  attorney  mav  mean 
one  thing  or  another,  as  the  tints  of  surrounding  circumstances  resting 
on  parol  testimony  may  vary.  When  jilaccd  u()on  record,  as  under  our 
recording  laws  it  may  be,  there  should  be  no  uncertainty  in  its  niean- 

•^  Authority  to  soil  on  specliil  tfriiis  niitliori/.CMl  an  imciit  to  nuiUf  nii  <'X- 
e<"utor.v  fitiitnict  to  coiivf-y,  Imt  in»t  on  (litT<T«>iit  Icriiis.  .IncUsnii  v.  It.-idiicr, 
.'{.'>  .Minn.  .'.L',  li<;  N.  \V.  'Mts  dssC).  Thi-  power  must  l>«'  Interprctcil  with  ref- 
erence to  till'  sniijcct-niiit.'fr  iinrl  the  cinunistancrs  under  whidi  tlie  «;:<Mit 
act.s.  Cnrson  v.  Smith.  5  .Minn.  ~s  (<;i!.  ."».S)  77  .\m.  I>cc.  .":!•»  (ls<;i»;  Ilissi-Ii  v. 
Terry,  (19  III.  1H4  (1S7.!).  Authority  to  .t.,.  v!;:;  :..;i,]  ns  "if  it  was  your  own" 
given  Du  a-JtLoriiy  to  sell  or  leu-se.     \Vai<l  v.  'i'linisiin   4(j  oiiio  St.  :;t7  (ISN')). 


404  TiiH  AiiTiioiUTY  (Part  2 

ing,  and  strangers  should  not  W  vci\uu\\\  to  look  beyond  the  language 
used.  We  are  aware  that  there  are  authorities  which  appear  to  attach 
importance  to  surrounding  circumstances,  but,  beyond  such  as  may 
be  ileemeil  to  create  an  cstojipel,  we  cannot  aj^prove  them;  and,  inas- 
much as  titles  to  land  cannot  in  Michigan  be  maintained  upon  an 
estoppel,  we  caimpt  recognize  the  authority  of  such  cases.  Eliminat- 
ing extrinsic  cirdumstances  from  the  question,  its  solution  is  com- 
paratively^easy.  No  doctrine  is  better  settled  than  that  these  "powers 
J  of  attorneys  are  ^rictly   construed,   and   cannot  be  enlarged  by  con- 

\\^  struction."    ;  \\'ood^  v.   Goodridge,  6  Cush.    117,   52   Am.   Dec.   771; 

)  Morrell  v.  Frith.  3  Mees.  &  W.  402;    Neilson  v.  Harford,  8  Mees.  & 

W.  806 ;  A\'ithington  v.  Herring,  5  Bing.  442 ;  Rossiter  v.  Rossiter, 
8  Wend.  494,  24\-\m.  Dec.  62;  Jeffrey  v.  Hursh,  49  Mich.  31,  12 
N.  W.  S98 ;  Id.,  58  Mich.  246,  25  N.  W.  176,  and  27  N.  W.  7. 

The  legislature  has  signified  its  approbation  of  this  doctrine  by  re- 
stricting powers  by  statute.  See  How.  St.  c.  215;  Id.  §§  5625,  5629. 
Recurring  to  the  instrument  in  question,  we  find  the  language  to  be  as 
follows :  "John  W.  Zimmerman  and  Barbara,  his  wife,  *  *  *  Jq 
make,  constitute,  and  appoint  Morris  W.  Zimmerman  our  true  and 
lawful  attorney  for  us,  and  in  our  name,  place,  and  stead,  and  in 
the  name,  place,  and  stead  of  either  of  us,  to  bargain,  sell  or  mortgage 
any  and  all  real  estate  belonging  to  us,  or  either  of  us,  in  any  real 
estate  in  the  county  of  Benzie,"  etc. 

The  plain  import  of  this  language  limits  the  power  to  lands  then 
owned  by  the  parties.  Weare  v.  Williams,  85  Iowa,  253,  52  N.  W.  328. 
As  the  title  then  stood,  plaintiff  had  no  title  in  the  premises.  She  had 
an  inchoate  right  of  dower,  which  she  might  release  by  joining  with 
her  husband  in  a  deed  of  the  premises,  or  by  her  conveyance  to  the 
holder  of  the  title.  Rhoades  v.  Davis,  51  Mich.  306,  16  N.  W.  659. 
It  was  not  an  interest  that  could  be  conveyed  by  her  so  long  as  the 
husband  held  the  title  to  the  fee.  But  when  she  received  a  deed  from 
her  husband,  and  became  owner  of  the  fee,  the  inchoate  right  of  dow- 
er was  extinguished  by  the  merger,  and  there  was  nothing  left  for  it 
to  operate  upon,  so  far  as  that  parcel  of  land  was  concerned,  unless  we 
are  to  extend  the  power  by  construction,  which,  as  we  have  seen,  the 
courts  do  not  favor.  This  land  did  not  belong  to  her  when  the  power 
of  attorney  was  executed.^ ^ 

Some  other  questions  are  raised  upon  the  record,  but,  as  the  case 
nnist  hinge  upon  the  power  of  attorney,  we  think  it  unnecessary  to  pass 
upon  them.  The  judgment  will  be  affirmed.  The  other  justices  con- 
curred. 

»i  For  distinction  between  authority  to  sell  "all  the  land  I  own"  and  "any 
lands  I  may  own,"  see  Weare  v.  Williams,  85  Iowa,  253,  52  N.  W.  328  (1892), 
and  the  cases  there  reviewed. 


Ch.  1)  NATURE   AND   EXTENT  405 

(B)  To  Convey  and  Warrant 
VALENTINE  v.  PIPER. 

(Supreme  Judicial  Court  of  Massachusetts,  1S39.    22  Piclc.  85,  33  Am.  Dec.  715.) 

Writ  of  entry,  wherein  was  demanded  the  premises  appurtenant 
to  an  ancient  wharf.  Demandants  relied  on  a  deed,  executed  by  Geo. 
Sullivan  as  attorney  of  Andrew  Price,  a  clergyman  in  England,  to 
Lawson  Valentine,  father  of  the  demandants. 

Shaw,  C.  J.®^  The  present  case  comes  before  the  Court  upon  a 
motion  of  the  defendant  to  set  aside  the  verdict  and  grant  a  new  trial, 
on  the  grounds  of  misdirection,  and  mistake  of  law  in  the  admission 
of  evidence,  and  as  a  verdict  against  evidence. 

The  action  was  brought  by  the  heirs  of  Lawson  Valentine,  to  re- 
cover a  tract  of  flats,  over  which  the  sea  ebbs  and  flows,  as  appurte- 
nant to,  and  parcel  of  a  tract  of  land,  bounded  on  salt  water,  and  the 
plaintiffs  began  by  showing  a  title  to  the  upland,  in  respect  to  which 
this  tract  of  flats  was  claimed.  The  land  consisted  of  a  wharf,  lying 
near  the  bottom  of  Summer  street,  bounding  on  Boston  harbour, 
known  at  different  periods,  as  Valentine's  wharf,  Price's  wharf  and 
Bull's  wharf.  Valentine  claimed  under  several  persons  of  the  name 
of  Price. 

The  first  exception  is  to  an  instrument,  purporting  to  be  a  letter 
of  attorney  from  Andrew  Price  to  George  Sullivan.  Evidence  was 
given,  tending  to  show,  that  Andrew  Price,  at  the  time  of  making  the 
instrument,  and  for  many  years  previous,  had  resided  in  England,  and 
the  instrument  purported  to  have  been  executed  there.  Under  these 
circumstances,  secondary  evidence  was  offered  to  prove  the  execution 
of  the  instrument,  which  was  objected  to,  without  calling  the  attesting 
witnesses,  or  proving  that  they  were  not  within  the  jurisdiction  of  the 
court,  but  the  objection  was  overruled,  and  the  secondary  evidence 
admitted.    And  the  Court  are  of  opinion,  that  this  was  correct.    *    *    * 

Some  objection  was  taken  to  the  legal  effect  of  this  instrument. 
It  purported  to  authorize  the  attorney  to  make  sale  of  the  real  estate 
of  the  constituent,  as  therein  described,  but  there  were  no  express 
words  authorizing  the  attorney  to  execute  a  deed  or  deeds.  But  the 
Court  are  of  opinion,  that  the  instrument  is  not  open  to  this  excep- 
tion. Where  the  term  "sale"  is  used  in  its  ordinary  sense,  and  the 
general  tenor  and  effect  of  the  instrument  is,  to  confer  on  the  attorney 
a  p<j\ver  to  dispose  of  real  estate,  the  authority  to  execute  the  proper 
instruments  reciuired  by  law,  to  carry  such  sale  into  effect,  is  neces- 
sarily incident.  It  is  in  pursuance  of  a  general  maxim,  that  an  au- 
thority to  accomi)lish  a  definite  end,  carries  with  it  an  authority,  so 

»2  Tart  of  the  oi»liii'>n  is  oiiiitt«'(l. 


406  TiiK  AUTuoiJiTY  (Part  2 

far  as  the  constituent  can  c^Mifer  it.  to  execute  the  usual,  lei;al  and 
appropriate  measures  jiropcr  [o  acconiphsh  the  object  proposed.  A 
power  of  attorney  might  he  so  drawn  as  to  authorize  the  attorney  to 
make  sale  of  an  estate,  where  it  mii^ht  he  apparent  that  it  w^as  the 
intention  of  the  constituent  to  authorize  the  attorney  to  negotiate  for 
a  sale,  leaving  it  to  the  constituent  afterwards  to  ratify  it  and  to  ex- 
ecute deeds.  Should  it  apjiear,  either  from  the  restricted  words  used, 
or  from  the  tenor  of  the  whole  instrument,  that  such  was  the  intent, 
it  ought  to  he  construed  as  conferring  such  a  restricted  power  only. 
In  the  present  case,  we  think  it  was  the  intent  of  the  constituent  to 
confer  on  the  attorney  an  authority  to  transfer  the  estate."*  *  *  * 
Judgment  upon  the  verdict  for  demandants.  .      , 


SCHULTZ  V.  GRIFFIN. 

(Court  of  Appeals  of  New  York,  1890.     121  N.  Y.  294,  24  N.  E.  480,  18  Am. 

St.  Rep.  825.) 

Griffin  gave  Schultz  a  contract  to  pay  him  $1,000  upon  his  sale  of 
Griffin's  farm  for  $20,000,  part  cash  and  part  by  payment  of  two  mort- 
gages on  the  farm.  Schultz  sued  for  his  commission  and  recovered. 
Griffin  appeals. 

Andrews,  J.  The  principal  point  urged  for  the  reversal  of  the 
judgment  is  that  the  contract  tendered  to  the  defendant,  whereby 
Longnecker  agreed  to  pay  such  portion  of  the  purchase  money  as  was 
represented  by  the  mortgage  to  the  Buffalo  Savings  Bank  and  the 
mortgage  to  Williams  "by  assuming"  those  mortgages,  was  not  a  com- 
pliance with  the  terms  upon  which  Schultz  was  employed  to  sell  the 
farm.  It  is  insisted  that  his  authority  extended  only  to  a  sale  in  which 
the  purchaser  should  absolutely  pay  and  discharge  the  mortgages,  and 
that  the  agreement  made  by  Longnecker  would  be  satisfied  by  his  pay- 
ing the  portion  of  the  purchase  money  over  and  above  the  mo"rtgages 
to  Griffin  personally,  and  by  his  assent  to  a  covenant  in  the  deed  of  the 
farm  to  assume  the  mortgages.  The  agreement  between  Schultz  and 
the  defendant  is  not  free  from  ambiguity.  The  price  for  which  the 
farm  was  to  be  sold  is  fixed,  and  the  agreement  proceeds  to  specify 
that  the  purchase  money  should  be  paid,  a  part  to  Griffin  personally, 
and  a  part  on  the  mortgages.  The  language  as  to  the  payment  of  the 
mortgages  may  be  susceptible  of  two  meanings,  according  to  extrinsic 
circumstances. 

»3  Accord:  Faniham  v.  Thompson,  ?A  Minn.  .•wO,  2(!  N.  W.  0,  .57  Am.  Kep. 
i>9  (I.S.Sj).  While  power  to  soil  lands  must  lie  strictly  construed,  it  should  not 
he  so  construed  as  to  defeat  the  intention  of  the  parties.  Ilenistreet  v.  15ur- 
dick,  90  111.  444  (1.S78).  The  distinction  hetween  a  power  to  contract  to  convey 
and  a  power  to  convey  is  hrou^rht  ont  in  Hunter  v.  Sacramento  Valley  Beet 
.•<ugar  Co.  (C.  C.>  11  Fed.   1".,  7  Sawy.  498  (1882). 


Shu  It?,  _  v_; riffin . 

tc: 

Def.  gave  iDtf.  p    contr*=^ct  to  v^-j   him  .'1000 
on  his  s°le  of  clef's,  f^-rm  for  cert*=in  price,  v^i 
sh  nnd  nort  "by  p^yt.  of  two  mortgages  on  the  ff'rir 
f .  sues  here  for  the  commission.  Ijef.  sets  utd  ^s 
defense  th^t  the  terms  of  the  agreement  were  not 
miDlied  with  by  Dtf .  in  the  selling  of  the  f«=rm, 

reg? rd  to  the  mortgages.  ?rom  ^  Judg.  for  lotf., 
f.  «T)pe»^ls. 
rt: 

The  contract  between  the  parties  is  -^mbiguou 
t  from  its  n^tur^l  meaning,  it  would  seem  to  be 
j^t  def.  w^s  to  receive  full  satisfaction,  includi 
e  J^^ssumption  of  the  mortgages  by  the  buyer,  befor 

w^s  tp  convey.  At  «ny  r«te  the  burden  w«s  on  ptf 

show  th'^t  the  contract  with  his  buyer  w«^s  such 
one  ^^s  WPS  authorized  by  the  agreement  with  def. 

h^s  ff'itled  to  Throve  this. 

Court  '-■Iso  loid  down  rule  th^^t,  a  power 
thout  restriction,  to  sell  rnd  convey  .l«nd .gives 
thority  to  the  ^f?t.  to  deliver  deeds  with  gener'^1 
rr-  nUr   bind  inf.  o  n  the  prin.,  r>ere,  under  the 
rounst^ncee.^V..  ,s  t^^   com.  ma  umi^l  n,ode  of  «s. 


OOOX'^i  mtr\  v^'^cf  oi   ;to"i:fnoo    -^   .l;tcr  eva-g   •^©C 
x°cr   ,9oii(    nJt-^^i»o  "xol:  mi^'J.   •e'leb  lo   •lag    airl 

u-x^i    •    ■"  ": •T^T    ow:t   lo    .it^^Rcf   \;(f    :ti»<7    ban 

8«   a;  .         aeimmoo   ©rfit   xol   ©lerf  8ej;a 

;ton  ©lew  jnemeo-xs^  erict  lo   amieiJ   er{;t   ;t«rf^    «8ni 

,c:t'^'^    e^-f'i   lo  §nllle8   ©ff:t   ni    .^^a  Tjcf  rf;tlw  br* 

♦  al^eqg-^^ 

uoifsxcTiDf^   ei   seiuX'^cr  ©liit   nd©w^©cf   ;to«i;txioo   erIT 

ecf   o;f  mees   blxrow  ;Ji    ,snlxi'^em  I^'ij;;)«ii  8^i  moi 
tbsjlonl   ^aol^o-'.lsli^Q  ILifl   evleoei  oi   a-^w  •le£ 

l^q  no   a^'w  aobiiicf   ©i{;t    ©J""!  ^n«   d'A    .^©ynoo   o^ 
ifoxxa   a'^w  la-^x/cf  sir:  rf;:tiw  ;to'^i;Jxioo   erliJ   ;f^ri;t 
.l©b  if;tlw  iaem&efg^   Bd^  Tjd   6©siiori;tjjr^  a«w  8 

.8lrf;t    ©voTCq-   o*    b©I:l»^    r, 
.^vvocf  B   ,;fTf;t   ©Ijti  n?/ob   &1«I   08l^   d'TtiroO 
asvx^,bn«I,"^©vfloo    bnfi  IX©a   o:t    ,nol^olt:^8©i   :^;j 
I-'ienes  rf^lw  85©eb  i©vil©b   od"    .;t:Q'^   ©ff;t   oit   -■*•- 

©ri;;    i©5nu   ,  ©t©  -^w   , .  nlirr   ©K;t   no  .^nj  6M -. 
33B  ^o  abcm  I^nan  bn-   .moo   ©^rd   a.   .-^^^eo.    .... 


Ch.  1) 


NATURE    AND   EXTENT 


40i 


It  appears  that  the  mortgages  were  accompanied  by  bonds  of  Griflin. 
He  had  an  interest  that  the  mortgages  should  be  paid,  to  reheve  him 
from  his  habihty  on  the  bonds.  On  the  other  hand,  the  contemplated 
purchaser  would  have  an  interest  to  apply  so  much  of  the  purchase 
money  as  was  required  for  that  purpose  to  the  extinguishment  of  the 
mortgages.  In  the  absence  of  any  circumstances  indicating  a  different 
interpretation,  and  regarding  alone  the  language  of  the  contract,  the 
most  natural  meaning  would  seem  to  be  that  actual  payment  of  the 
purchase  money,  part  to  Griffin  personally,  and  part  on  the  mortgages, 
was  to  be  made  before  any  conveyance  by  Griffin.  ■  It  seems  quite  clear 
that,  if  the  Longnecker  contract  had  been  act^epted  and  signed  by 
Griffin,  the  latter  would  have  been  bound  to  convey  on  receiving  $11,- 
000  in  cash,  and  the  covenant  of  Longnecker  assuming  the  mortgages. 
Such  a  transaction  would  have  left  Griffin  still  liable  on  his  bonds, 
with  his  liability  changed  in  equity  to  that  of  surety  for  Longnecker 
for  the  mortgage  debts.    Ayers  v.  Dixon,  78  N.  Y.  318. 

It  does  not  appear  whether  the  mortgages  were  or  were  not  due.  If 
it  had  appeared  that  they  had  not  matured,  so  that  they  could  not  have 
been  paid  without  the  consent  of  the  holders,  we  are  inclined  to  think 
that  the  contract  with  Schultz  would  be  construed  as  an  authority  to 
sell  the  land  subject  to  the  mortgages.  It  could  not  reasonably  be  sup- 
posed, in  such  case,  that  Griffin,  who,  as  the  contract  shows,  was  seek- 
ing to  sell  his  farm,  would  have  inserted  an  impossible  condition,  or 
one  which  could  not  be  performed  except  by  the  consent  of  the  holders 
of  the  mortgages.  But  the  case  gives  no  light  upon  this  point ;  and,  as 
the  burden  was  upon  the  plaintiff  to  show  that  the  contract  with  Long- 
necker was  such  a  one  as  was  authorized  by  the  agreement  with  Griffin. 
wo- are  of  opinion  that  judgment  was  erroneously  given  for  the  plain- 

The  further  point  is  made  that  Schultz  was  not  autl^orizcd  to  make  it 
|a  condition  of  the  sale  that  the  conveyance  should  he.  with  warranty, 
'he  defendant's  counsel  cites  in  support  of  this  paint  Nixon  v.  Hy- 
s6i^=>tt,  5  Johns.  58,  which  supports  his  contention.  I  The  rule  that  an 
agent  to  sell  personal  property  has  implied  power  fo^warrant,  in  the 
absence  of  any  restriction,  where  sale  with  warraVy  is  usual  and  cus- 
tomary in  similar  cases,  was  declared  in  Xclson  v.  (Cowing,  6  Hill,  336, 
substantially  overruling  Gibson  v.  Colt,  7  Johns.  3db. 

There  seems  to  be  no  wcU-foimded  distinction  between  D^al  and  per 
sonal  property,  rcfjuiring  a  different  construction/of  an  a^-ncy  for  sate 
in  the  two  cases.  The  great  preponderance  oC/authorityniow  is  that  a 
power,  without  restriction,  to  sell  and  convey  real  estate  gives  authority 
to  the  agent  to  deliver  deeds  with  general  warranty  binding  on  the 
principal,  where,  under  the  circumstances,  this  is  the  common  and 
usual  mode  of  assurance.  Le  Roy  v.  Heard,  S  How.  4.^1,  12  L.  Kd. 
\\?\\  I'eters  v.  I-'arnsworlh,  15  \'t.  155,  40  Am.  Dec.  671  ;  \ "aiiada  v. 


yy 


<z^ 


408  Tin:  authokiti'  (Part  2 

Hopkins,  1  J.  J.  Marsh.  2*\\  1«)  Am.  Dec.  02 ;  »*  Tassart  v.  Slanbcry,  2 
McLean,  543,  Feci.  Cas.  \\).  L\724  :    Kawlo,  Cov.  §  20,  note. 

It  is  sutTicicnt.  however,  for  the  dis|)t>.^itioii  of  this  apiieal,  that  the 
first  point  considered  nnist  prevail.  Jndgment  reversed,  and  a  new 
trial  ordered.     All  concur,  except  Gkay,  J.,  absent. 


(C)  To  Collect  '  '[  .  \ 

MANN'S  EX'RS  v.  ROBINSON.      ' 

(Supreme  Court  of  Appeals  of  West  Virginia,  1S81.     19  W.  Va.  49,  42  Am. 

Kop.  771.) 

Action  for  specific  performance  of  a  contract  for  the  sale  of  land. 
One  Hunter,  as  agent  of  Mann,  sold  the  land  to  Robinson  for  part 
cash  and  part  bonds.  Hunter  received  payment  of  all  the  bonds.  Both 
principal  and  agent  were  now  dead.  The  circuit  court  held  the  pay- 
ment to  Robinson  good  and  decreed  a  deed  to  Robinson. 

Green,  J.^^  *  *  *  c;Qj^g  q£  ^|^g  text-books  lay  it  down  broad- 
ly, "that  an  agent  employed  to  sell  has  no  authority  as  such  to  receive 
payment  of  the  purchase-money."  See  Sugden  on  Vendors  (14th  Ed., 
8th  Am.  Ed.  1873)  vol.  1,  c.  1,  §  3,  par.  11,  p.  70,  bottom  p.  48.  I 
apprehend,  that  this  broad  proposition  needs  qualification.  If  the 
property  be  personal  property,  the  authority  to  sell  for  caih  would 
carry  with  it  generally  the  power  and  authority  to  receive  the  purchase- 
money.  See  Hackney  v.  Jones,  3  Humph.  612;  Taylor  v.  Nussbaum, 
2  Duer,  302;  Higgins  et  al.  v.  Moore,  34  N.  Y.  417;  Cross  v.  Haskins, 
13  Vt.  536,  540.  But  if  the  subject-matter  of  the  authority  to  sell  be 
land,  it  is  important  to  determine  accurately,  what  is  meant  by  author- 
ity to  sell.  There  cannot  be  a  perfected  sale  of  land  but  by  convey- 
ance; and  a  power  of  attorney  under  hand  and  seal  authorizing  an 
agent  to  sell  and  convey  land  for  cash  would  confer  on  the  agent  the 
power  to  receive  in  cash  the  purchase-money,  when  the  sale  was  made. 

»*  A  leading  and  well-reasoned  case,  in  which  the  court  held  that  an  agent 
may  do  such  things  as  are  most  usual  and  proi)er  to  accomplish  the  thing 
intended  to  be  done,  including  the  giving  of  a  deed  with  the  usual  warranties 
and  covenants,  and  also  the  breaking  up  of  a  great  tract  of  land  into  smaller 
tracts  such  as  would  be  salalile.  All  powers  must  be  construed  with  a  view 
to  the  design  and  object  of  them.  This  would  not,  of  course,  justify  a  de- 
parture from  the  instructions,  prescribed  by  the  principal  in  the  power.  Rice 
V.  Tavernier.  S  Minn.  248  (Gil.  214),  8.3  Am.  Dec.  778  (180.3) ;  Smith  v.  Allen, 
8G  Mo.  178  Q88.J).  It  is  sometimes  held  that  to  justify  the  agent  in  execut- 
ing a  wari'anty  deed,  he  must  have  broader  power  than  a  naked  power  to  sell. 
P.ronson  v.  Cofhn,  118  Mass.  1.56  (1875) ;  Id.,  108  Mass.  17.5,  11  Am.  Rep.  3.35 
(1S71).  See,  also,  the  leading  case  of  Le  Roy  v.  Beard,  8  How.  451,  12  L.  Ed. 
1151  (1850J. 

As  to  the  effect  of  a  warranty  deed,  given  under  authority  to  execute  a 
quitclaim  deed,  see  Robinson  v.  Lowe,  50  W.  Va.  75,  40  S.  E.  454  (1901) ;  Kane 
V.  Sholars,  41  Tex.  Civ.  App.  1.54,  90  S.  W.  037  (1905). 

95  Part  of  the  opinion  is  omitted. 


Ch.  1)  NATURE   AND    EXTENT  409 

See  Peck  et  al.  v.  Harriott  et  al.,  6  Serg.  &  R.  146,  9  Am.  Dec.  415. 
On  the  other  hand  a  verbal  or  parol  authority  to  sell  would  mean 
simply  an  authority  to  contract  to  sell  the  land ;  for  no  verbal  or  parol 
authority  could  be  given  to  make  a  perfected  sale,  that  is,  a  convey- 
ance. Such  authority  must  be  under  seal.  Ordinarily  an  authority  to 
contract  to  sell  would  not  carry  with  it  an  authority  to  collect  the  pur- 
chase-money.   See  Mynn  v.  Jolliffe,  1  i\Ioo.  &  R.  327.®^ 

In  Ireland  v.  Thompson,  56  E.  C.  L.  167  and  168  (4  Man.  G. 
&  S.),  Maule,  Judge,  in  speaking  of  this  case,  says:  "In  the  case 
of  Mynn  v.  Jolliffe,  1  ^1.  &  R.  326,  it  v^as  decided  that  an  agent 
employed  to  sell  an  estate  is  not,  as  such,  authorized  to  receive  the  pur- 
chase-money. And  there  is  no  doubt,  that  on  the  sale  of  an  estate  to 
imply  such  an  authority  would  be  most  inconvenient  and  unnecessary ; 
it  being  clearly  for  the  interest  of  the  vendor,  that  he,  and  not  his 
agent,  should  receive  the  purchase-money;  and  no  inconvenience  to 
any  one  arising  out  of  the  limit  to  the  authority  of  the  agent,  which 
excludes  his  right  to  receive  the  money.  The_  proper  course  is  clearly, 
that  the  vendee  should  retain  the  money  and  the  vendor  the  estate,  till 
the  conveyance  is  made;  and  thus  neither  of  them  runs  any  risk  of 
loosing  the  money." 

These  general  views  seem  to  me  eminently  sound ;  and  as  I  under- 
stand the  case  of  Peck  v.  Marriott,  6  Serg.  &  R.  146,  9  Am.  Dec.  415, 
they  are  the  views  entertained  by  that  court,  though  not  so  expressed 
in  that  case, 

Sugden  to  sustain  his  general  proposition  refers  also  to  Pole  v.  Leask, 
28  Beav.  562,  but  I  have  not  access  to  this  case.  Doubtless  there  are 
some  cases,  where  a  parol  or  verbal  authority  to  sell  land  would  under 
the  circumstances  be  held  to  confer  authority  to  receive  the  cash-pay- 
ment on  the  sale  of  the  land  being  made.  Thus  if  an  auctioneer  be 
verbally  authorized  to  sell  a  lot  at  public  sale  upon  certain  terms,  one 
of  which  was,  that  ten  per  cent,  of  the  purchase-money  should  be  paid 
in  cash  on  the  day  of  sale,  the  auctioneer  has  authority  to  receive  this 
cash-payment;  as  the  court  says:  "His  authority  to  receive  the  stipu- 
lated deposit  cannot  be  questioned.  He  receives  the  deposit  not  mere- 
ly as  the  agent  of  the  seller.  He  is  bound  to  keep  it  for  the  indemnity 
of  the  purchaser,  until  the  latter- is  enabled  to  look  into  the  title  pro- 

ofl  Mere  power  to  sell  Innd  rloe.s  not  imply  power  to  sell  on  credit.  Presniiip- 
tlvelv  u  sale  is  to  lie  for  <!isli.  A  usutre  at  the  jiliioe  of  sale  iiimv  rebut  (his 
presniiiiition.  Winders  v.  IIlll,  141  N.  ('.  (191.  r.l  S.  E.  440  (1!Mk;)  ;  Marl)lc  v. 
BnuK,  "•4  Minn.  'JTT.  .">  N.  W.  ll.'U  (IWKt).  Hut  the  authority,  always  under- 
stood, to  do  all  things  necessary  to  the  execution  of  the  power  requires  the 
HKent  empowered  to  sell  and  convey  as  a  mediate  act,  to  receive  the  i)ri(e. 
\\ilhout  payment  before  conveyance,  the  sale  miuht  he  a  fraud  uiton  the 
jirincipal.  I'eek  v.  Harriott,  0  Ser«.  «&  it.  14(;,  0  Am.  Dec.  41.".  (ISL'O).  If  the 
at^ent  makes  a  contract  he  has  no  jiower  to  make,  then  he  lias  no  ri;,'lit  to 
receive  part  of  the  pnrcliase  price,  neilJier  has  he  before  any  contnict  of  sab- 
Is  entered  into,  ."^cliaefrer  v.  Mnt.  lienellt  Ins.  Co.,  ;'„S  Mont.  4.".!),  10(1  Tjic 
21i5  (HMHJ).  .Mere  aulhority  to  contract  fur  a  sale,  hut  not  to  convey,  carries 
no  authority  to  collect  payment.  White  v.  Lee,  1)7  Miss.  493,  52  South.  -OtJ 
(1910). 


410  TiiK  AT  iiioKiTY  (l*art  2 

posed  to  be  conveyed  to  him  aiul  tleeitle  on  its  sulTicicncy,  or  until  the 
lapse  of  time  limited  for  the  purpose  in  fixing;  the  day  for  the  jKiyment 
anil  security  for  the  residue  of  tlic  price." 

So  in  the  case  of  Verhy  v.  (Vitjshy.  ')  I-eiqh.  387.  a  decree  was  ren- 
dered, which  im])liedly  afhrmed,  that  an  ai^ent.  who  had  been  appointed 
by  a  verbal  authority  to  sell  land,  had  inuler  the  circumstances  appear- 
ing in  that  case  authority  to  receive  the  cash-payment.  The  court  says 
not  one  word  on  this  subject:  and  this  inference  is  to  be  drawn  only 
from  the  decree.  The  re]Hirter  too  fails  to  state,  what  the  circumstanc- 
es or  evidence  was;  in  stating  the  law  he  merely  says:  "In  the  opinion 
of  the  court  below  as  of  this  court  the  evidence  established,  that  John 
Green  was  authorized  by  Charles  to  make  such  a  contract  as  was  made 
with  the  complainant."  The  contract  which  was  made  was  a  sale  of 
two  lots  for  $425.00,  of  which  $250.00  was  to  be  paid  and,  as  the 
agreement  states,  was  paid  in  cash  to  John  Green.  So  far  as  I  can  see, 
there  was  no  authority  from  anything  appearing  in  this  case  to  justify 
the  reporter  in  stating  in  the  syllabus  in  this  case,  that  so  broad  a  prop- 
osition was  held  in  it,  as  that  "when  the  owner  of  lands  authorized  an- 
other to  make  a  contract  for  the  sale  thereof,  the  authority  of  the  agent 
to  receive  so  much  of  the  purchase-money,  as  is  to  be  paid  in  hand,  is 
a  necessary  incident  to  the  power  to  sell."  Nothing  of  the  sort  is  said 
by  the  court ;  and  no  such  broad  proposition  can  possibly  be  inferred 
from  the  statement  of  the  case  or  the  decree  entered. 

But  be  this  as  it  may,  there  is  certainly  nothing  in  this  or  in  any 
other  case,  which  I  have  seen,  that  gives  any  countenance  to  the  idea, 
that  a  simple  parol  authority  to  sell  land  or,  what  is  the  same  thing,  to 
make  a  contract  of  sale  would  impliedly  authorize  the  agent  making 
the  sale  to  receive  the  deferred  payments  of  the  purchase-money.  Such 
implication  would  be  entirely  unnecessary  in  order  for  the  agent  to 
execute  the  authority  conferred  on  him ;  and  on  every  correct  prin- 
ciple it  could  not  be  made.  In  such  case  it  is  clear,  that  no  authority 
to  the  agent  to  collect  any  deferred  instalments  of  the  purchase-money 
can  be  inferred. 

In  this  case  not  only  was  no  authority  given  by  Mann  to  Hunter  to 
collect  these  deferred  payments ;  but  the  paper,  which  Mann  signed, 
seems  to  me  to  go  much  further  than  was  necessary  and  clearly  to 
negative  the  idea,  that  Hunter  was  to  collect  the  deferred  payments, 
if  he  sold  the  land.  The  language  used  is:  "That  should  H.  F.  Hunter 
sell  said  land,  I,  William  T.  Mann,  will  endorse  said  sale  and  take 
my  interest  in  money  or  bonds  as  contracted  by  said  H.  Hunter."  It  is 
perfectly  obvious,  that  the  bonds  here  referred  to  are  the  bonds  for 
the  purchase-money  of  the  land  when  sold.  Mann  stipulates  here  ex- 
pressly, that  his  share  of  these  bonds  was  to  be  given  to  him,  which 
is  utterly  inconsistent  with  the  idea,  that  all  these  bonds  were  to  be 
collected  by  Hunter.  But  even  had  there  been  express  authority  given 
by   Mann   to  Hunter  to   collect  the  deferred  payments  .of   the  pur- 


Ch.  1)  NATURE   AND    EXTENT  411 

chase-money,  when  the  land  was  sold,  yet  he  would  have  had  no  au- 
thority to  collect  it  in  the  manner,  in  which  he  did,  that  is,  before  it 
was  due,  receiving  for  it  according  to  the  deposition  of  the  purchaser, 
Robinson,  cattle,  horses,  sheep  and  notes  of  third  parties,  which  were 
payable  to  Robinson.  An  agent  authorized  to  receive  money  or  col- 
lect a  debt  can  not  receive  another  thing,  as  a  house  or  a  bond  of  a 
third  person  in  discharge  of  a  debt.  See  Wilkinson  &  Co.  v.  Holloway, 
7  Leigh,  284;  GulIett^Lewis,^^  Stew.  27;  Wiley  v.  Mahood,  10  W. 
Va.  221.  These  were  cases  of  attorneys  at  law,  who  being  authorized 
to  collect  debts  received  payment  in  something  else  than  money ;  but 
they  show,  that  the  principle  is  just  as  applicable  to  any  other  agent  as 
to  attorneys  at  law.  Indeed  they  are  based  on  the  ground,  that  the 
authority  of  an  attorney  at  law  is  the  same  as  that  of  any  other  agent 
to  collect  a  debt. 

The_col]e£tion  too  of  a  debt  before  it  is  due  by  an  agent  authorized 
to  collect  a  debt  is  generally  a  violation  of  his  duty;  and  the  person, 
who  knowing  his  authority  pays  him  money  in  this  way,  is  responsible, 
if  the^irToney  is  not  paid  to  the  principal.  Parnther  v.  Gaitskell,  13 
East,  432.     *    *     * 

Decree  reversed;  cause  remanded. 


(D)   7'o  Fix  or  Modify  the  Terms 
HAMPTON  V.  MOORHEAD. 

(Supreme  Court  of  Iowa,  188.3.     02  Iowa,  91,  17  N.  W.  202.) 

Action  for  specific  performance  of  a  contract  for  the  sale  of  land, 
made  by  J.  W.  Moorhead  as  attorney  in  fact  for  the  defendant.  T.  L. 
Moorhead.  The  court  refused  specific  performance,  but  made  $2,000, 
paid  the  agent,  a  lien  on  the  land. 

Adams,  J."*^  There  is  some  evidence  tending  to  show  that  the 
power  of  attorney,  by  virtue  of  which  the  sale  is  alleged  to  have  been 
made,  was  forged,  but  we  do  not  deem  it  necessary  to  determine  what 
the  fact  was.  For  the  i)uri)oses  of  the  opinion  it  may  be  conceded 
that  the  power  of  attorney  was  not  forged.  I>ut,  conceding  such  fact, 
we  are  not  able  to  sec  that,  under  the  plaintitT's  own  testimony,  the  sale 
can  be  sustained.  While  it  appears  clearly  enough  that  the  i)laintirf 
paid  $2,000  in  cash,  as  the  court  found,  yet  it  was  paid  only  to  J.  W. 
Moorhead,  and  did  not,  we  think,  under  the  circumstances,  as  shown 
by  the  undisputed  evidence,  become  a  payment  to  Thomas  L.  IMoor- 
head.  There  is  no  pretense  that  any  part  of  the  money  actually  came 
into  Thomas  L.  Moorhead's  hands.  This,  to  be  sure,  would  not  have 
been  necessary  to  constitute  a  payment  to  Thomas  L.  if  J.  W,  had  rc- 

»T  I'jirt  of  the  opinion  Is  oniiltcd. 


412  Tin:  aitiiokitv  (Part  2 

ccivcJ  the  money  while  actiiij;  within  the  scope  of  his  pt)\ver.  But  the 
undisputed  evidence  shows  that  he  did  not  thus  act.  J.  W.  Moorhead's 
power  was  to  make  a  sale.  \\'hat  he  undertook  to  do  was  to  make  an 
exchange;  at  least,  so  far  as  the  transaction  in  part  was  concerned. 
He  took  a  patent-right  as  a  part  of  the  consideration  for  the  land. 

The  language  of  the  power  of  attorney  is  not  very  accurate,  but 
there  is  no  question  as  to  what  it  means.  After  describing  the  land  it 
sets  out  the  power  conferred  in  these  words:  "To  make  sale  of  the 
same  or  any  part  thereof  for  such  sum  or  price,  and  on  such  terms,  as 
to  him  (the  said  attorney)  shall  seem  meet,  and  to  ask,  demand,  re- 
cover, and  receive  all  sums  of  money  which  shall  become  due  and 
owing  to  me  by  means  of  such  sale  or  sales,  and  to  take  all  lawful 
means  for  the  recovery  thereof,"  etc.  Under  this  power  the  attorney 
was  authorized  to  make  a  sale,  and  only  that."**  A  sale  is  defined  to 
be  "an  agreement  by  which  one  of  two  contracting  parties,  called  the 
seller,  gives  the  thing  and  passes  the  title  to  it  in  exchange  for  a  certain 
price  in  current  money."  Bouv.  Law  Diet.  It  dififers  from  an  ex- 
change, where  the  consideration  is  paid  in  property  other  than  money. 
In  Parsons  on  Contracts,  vol.  1,  p.  520,  it  is  said:  "A  sale  is  distinctly 
discriminated  in  many  respects  from  an  exchange  in  law ;  an  exchange 
being  the  giving  of  one  thing  and  the  receiving  of  another  thing,  while 
a  sale  is  the  giving  of  one  thing  for  that  which  is  a  representation  of 
all  values."  See,  also.  Vail  v.  Strong,  10  Vt.  457.  When,  therefore, 
J.  W.  IMoorhead  undertook  to  take  a  patent-right  in  part  consideration, 
he  undertook  to  do  what  he  had  no  authority  to  do,  and  the  plaintiff 
should  have  kpown  it.  The  trade  was,  therefore,  void.  It  differed  in 
no  respect  from  what  it  would  have  been  if  there  had  been  no  power 
of  attorney.  There  being  no  sale,  the  money  received  could  not  be  re- 
garded as  secured  in  pursuance  of  a  sale,  and  it  not  coming  actually 
into  Thomas  L,  Moorhead's  hands  he  was  not  affected  by  the  receipt 
of  it  by  J.  W.  Moorhead.  We  think,  then,\that  the  court  erred  in 
charging  the  land  with  a  lien  for  this  money,   j*     *     * 

Reversed. 


ney.    r 


9  8  The  agent  has  no  implied  anthority^to  accept  payment  In  any  other 
merlium  than  money.  He  may  not  accept  drafts,  notes,  or  checks.  Ormsbv 
V.  Graham,  123  Iowa,  202,  98  N.  W.  724  (1904).  Nor  a  certificate  of  deposit. 
Wilkin  V.  Voss,  120  Iowa,  500,  94  N.  W.  112;j  (1903).  Nor  bonds.  I'aul  v. 
Grimm,  165  Pa.  1.39,  30  Atl.  721,  44  Am.  St.  Itep.  G48,  ,35  Wkly.  Notes  Cas. 
451  (IbO.j),  containing  a  review  of  the  cases  and  many  illustrations  of  the 
rule.  Nor  a  cancellation  of  a  debt  against  the  agent;  Catterall  v.  Hindle, 
L.  R.  1  C.  P.  180  (18W);  Hunter  v.  Kasthaiii,  95  Tex.  1)48,  (J9  S.  W.  66 
(1902).  Nor  goods,  wares,  and  merchandise.  Lumjikin  v.  Wilson,  52  Tenn.  (5 
IIei.sk.)  555  (1871).  If  the  con.sideration  be  anything  else  than  money,  it  is 
not  a  sale,  but  a  barter  or  exchange.  Coulter  v.  Portland  Trust  Co.,  20  Or. 
469,  26  I'ac.  .565,  27  Pac.  266  (1891);  Id.,  23  Or.  131,  31  Pac.  280  (1892),  with 
an  interesting  review  of  authorities;  Skirvin  v.  O'Brien,  43  Tex.  Civ.  App. 
1,  95  .S.  W.  696  Q906).  The  money  nmst  pass  current;  Confederate  money  will 
not  do.    Turiiin  v.  fcJansom,  36  Tex.  142  (1872). 


Ch.  1)  NATURE    AND    EXTENT  413 


FULLERTON  v.  McLAUGHLIN. 

(Supreme  Court  of  New  York,  General  Term,  Third  Department,  1S93. 
70  Hun,  568,  24  N.  Y.  Supp.  2S0.) 

Action  to  compel  defendant  to  convey  certain  premises  by  virtue 
of  a  written  contract  made  between  the  parties,  in  M^hich  one  La 
Fountain  had  afterwards  filled  in  some  descriptions,  terms  $10  cash, 
balance  in  one  year  or  the  contract  to  be  void.  Tlie  cash  was  paid, 
but  the  agent  extended  beyond  one  year  the  time  for  payment  of  the 
balance. 

The  opinion  of  Putnam,  J.,  at  circuit,  was  as  follows: 

I  think  that  all  the  evidence  in,  and  facts  of,  the  case,  indicate  that 
La  Fountain  was,  to  a  certain  extent,  the  agent  of  the  defendant. 
The  contract  was  drawn  with  a  blank  space  left,  to  be  filled  in  with 
a  proper  description  of  the  lots  agreed  to  be  conveyed ;  and  I  infer 
from  the  evidence  that  La  Fountain,  as  defendant's  agent,  was  au- 
thorized to  write  in  the  contract  the  proper  description  of  the  lots, 
and  hence  that  the  contract,  as  read  in  evidence,  was  a  valid  and  au- 
thorized contract.  But  although  La  Fountain  was  an  agent  of  de- 
fendant, to  make  the  contract,  that  fact  did  not  give  him,  either  ac- 
tually or  presumptively,  any  authority  to  cancel,  extend,  or  modify 
it.  The  admission  of  defendant,  proved  by  several  witnesses,  that 
"Mr.  La  Fountain  did  all  his  business  for  him,"  should  be  deemed  to 
apply  to  the  business  then  being  discussed  and  transacted — the  mak- 
ing of  contracts  for  the  sale  of  lots.  The  contract  being  made,  and 
the  right  of  the  parties  fixed  and  determined  by  the  writing,  the  ad- 
mission of  defendant  should  not  be  construed  to  mean  that  La  Foun- 
tain had  authority  to  modify  or  extend  or  change  the  contract. 
When  this  written  contract  was  made,  the  agency  must  be  deemed 
to  have  ceased,  in  the  absence  of  competent  evidence  of  its  continu- 
ance. It  was  for  the  plaintififs  to  show  such  continuance.  Under 
well-settled  principles,  they  could  not  show  such  continuance  by  the 
agent's  declarations.  But  they  show  it  in  no  other  manner.  The 
plaintiff  Mould  testified  that  the  first  time  he  saw  defendant,  after 
the  making  of  the  contract,  the  latter  said  that  La  Fountain  was  not 
authorized  to  extend  the  contract,  or  to  act  as  his  agcn^.  I  conclude, 
therefore,  that  plaintiffs  fail  to  show  a  valid  extension  of  the  time 
to  perform  the  contract.  They  show  the  agency  of  La  Fountain  to 
the  making  of  the  contract.  But  such  agency  does  not  give  him 
power  to  modify,  change,  or  extend  it.  See  lircwster  v.  Carncs,  103 
N.  Y.  556,  9  N.  E.  323;  Ritch  v.  Smith,  82  N.  Y.  627;  Bickford 
V.  Menier,  107  N.  Y.  490,  14  N.  E.  438;  Edwards  v.  Dooley,  120  N. 
Y.  551,  24  N.  E.  827;  Smith  v.  Kidd,  68  N.  Y.  130,  131,  23  Am. 
Rep.  157. 

By  the  terms  of  the  contract,  plainlifTs  were  to  pay  the  balance  of 
the  purcliase  price  one  year  from  its  date,  and  if  said  money  was  not 


414  TiiH  AuriioKiiY  (Part  2 

then  pai<I  ho  contract  shouUl  ho  nuH  and  void.  I  think,  thorofore, 
tliat  tlie  time  of  the  iiavniont  was  of  the  essence  of  tlie  contract. 
Wells  V.  Smith.  2  VAw.  Ch.  /"S ;  7  Tai-e.  22.  31  Am.  Dec.  274. 
Hence,  tho  time  of  paymenl  heini;-.  hy  the  irrnis  of  the  contract,  ma- 
terial, and  strict  fnltillmcnt  oi  the  terms  of  the  contract  not  having 
been  waived  or  extended  hy  defendant,  I  conclude  that  plaintiffs  are 
not  entitled  to  a  specific  performance.  The  complaint  should  be  dis- 
missed, with  costs. 

Argued  before  Mavh.vm.  P.  J.,  and  1[i:ukick,  J. 

Hkrrick,  J.  It  seems  to  me  that  this  case  should  be  affirmed, 
upon  the  opinion  of  the  court  below.  The  agency  proved,  it  seems 
to  me,  did  not  grant  power  to  extend  or  modify  the  written  con- 
tract.»» 


IV.  To  Collect 

(A)  In  General 

BARRETT  v.  DEERE. 

(Nisi  Prins  in  the  Court  of  Kiug's  Bencli,  1828.     Moody  &  Malkin,  200,  22  E. 

C.  L.  507.) 

Assumpsit  for  goods  sold  and  delivered.  Defense  payment.  The 
money  had  been  paid  to  a  person,  sitting  in  plaintiff's  counting-house 
behind  the  railing,  with  account  books  near  him.  This  person  gave 
a  receipt,  signed  W.  Long.  In  fact,  no  such  person  was  employed 
about  the  place. 

Lord  TenterdEn,  C.  J.  The  only  question  for  the  jury  is,  whether 
the  sum  of  £6.  16s.  was  paid  at  the  plaintiff's  counting-house  or  not  ? 
If  it  was,  the  defendant  is  entitled  to  a  verdict.  If  he  were  not,  the 
consequences  would  be  very  serious.    In  a  great  place  of  business  Hke 

9  9  Authority  to  an  agent  to  sell  land  does  not  per  se  confer  authority  to 
rescind  and  cancel  the  contract  of  sale.  West  I^^nd  Hotel  &  Land  Co.  v. 
Crawford,  120  N.  C.  347,  27  S.  E.  31  (1897).  Nor  does  authority  to  sell  at  a 
fixed  piice.  or  in  a  given  manner,  give  any  power  to  st^ll  at  any  other  price. 
National  Iron  Armor  Co.  v.  I'.runer,  19  N.  J.  E<i.  331  (18G8) ;  Dayton  v.  Bu- 
ford,  IS  Minn.  120  (Gil.  Ill)  (1872).  Nor  in  any  other  manner.  IJice  v.  Tav- 
emier,  8  Minn.  248  (Gil.  214),  83  Am.  Dec.  778  (1803).  Though  when  the 
principal  leaves  discretion  with  the  agent  he  will  he  hound,  even  though  the 
agent  sell  for  less  than  the  amount  he  has  suggested.  Sprigg's  Ex'rs  v. 
Hennan,  0  Mart.  (N.  S.)  510  (1828). 

Moreover,  the  authority  nmst  be  exercised  within  a  reasonable  time.  Mat- 
thews V.  Sowle,  12  Neb.  398,  11  N.  W.  857  (1882).  If  a  considerable  time 
elapses,  conditions  may  have  changed  so  as  to  raise  a  presumption  that  the 
principal  no  longer  holds  the  agent  out  as  having  authority.  Wasweyler  v. 
Martin,  78  Wis.  59,  46  N.  W.  890  (1890). 

The  agent,  of  course,  cannot  tix  terms  for  his  ovm  advantage,  even  though 
no  fraud  is  intended  and  no  injury  results.  Finch  v.  Conrade's  Ex'rs,  154  Pa. 
.326,  26  Atl.  36'^.  .''.2  Wkly.  Notes  Cas.  196  (1893)  ;  Hill  v.  Ileltou,  80  Ala.  528, 
1  South.  340  (1S8G),  po.st,  p.  773. 


Ch.  1)  NATURE    AND    EXTENT  415 

this,  no  transactions  could  be  carried  on,  if  it  were  not  sufficient  for 
a  purchaser  to  send  his  money  to  the  seller's  place  of  business,  and 
pay  it  to  any  person  whom  he  finds  there,  whether  actually  author- 
ized to  receive  it  or  not,  who  appears  to  be  intrusted  with  the  conduct 
of  the  business.  The  debtor  has  a  right  to  suppose  that  the  trades- 
man has  the  control  of  his  own  premises,  and  that  he  will  not  allow 
persons  to  come  there  and  intermeddle  in  his  business  without  his 
authority.^  If,  therefore,  the  jury  are  of  opinion  that  the  payment 
was  made  at  the  plaintiff's  counting-house,  their  verdict  must  be  for 
the  defendant. 

Verdict  for  the  defendant. 


BUTMAN  V.  BACOX. 
(Supreme  Judicial  Court  of  Massachusetts,  1864.     90  Mass.  [S  Allen]  25.) 

Plaintiff  left  her  bank  book  with  her  mother  to  enable  her  to  draw 
or  deposit  on  her  account.  Defendant,  her  brother,  asked  a  loan  of 
$150,  and  plaintiff  sent  the  mother  an  order  on  the  account.  The 
brother  tried  to  show  that  he  had  repaid  the  loan  to  the  mother. 

Per  Curi.\m.  The  evidence  offered  contains  no  express  words  by 
which  the  plaintiff  constituted  her  mother  her  agent  to  receive  pay- 
ment of  this  debt.  Nor  is  the  power  to  receive  it  implied  by  the 
agency  which  the  evidence  tended  to  prove ;  for  that  agency  related  to 
other  matters,  and  was  not  general,  but  limited  to  those  matters. 

Exceptions  overruled. 


(B)  Implied  from  Possession  of  Notes  or  Securities 
ROBERTS  v.  MATTHEWS. 

(Tli-'li  CoTirt  of  Chancery,  1GS2.     1  Vernon,  l.'O.) 

The  case  was,  the  defendant  Matthews  employed  one  Smith  a 
scrivener  to  place  out  i50.  for  him  at  interest,  which  the  scrivener 
did  to  the  plaintiff,  and  took  the  plaintiff's  bond  for  it  in  the  defend- 
ant's name ;  and  about  three  months  afterwards  delivered  the  bond 
to  the  defendant.  Plaintiff  Roberts  all  along  paid  his  interest  to 
the  scrivener,  anfl  about  five  years  after  the  entering  into  this  bond, 
the  scrivener  calling  upon  him  for  the  principal,  he  paiil  £30.  of  it, 

1  Payinont  to  a  fl^rk  In  a  country  store  while  the  employer  Is  .-ilisent  is 
Roo«l.  'Davis  V.  Wiitcrman.  10  Vt.  r.'Jfi,  IV.'.  Am.  Dec.  21»i  (ls;!,S).  See.  also, 
Ganliiirr  v.  I»avis,  L'  Car.  vt  V.  40.  12  K.  C.  L.  444  (1S2.".),  in  wliich  tlie  a.i,'ent 
was  allowed  to  trade  in  his  own  name.  As  to  a  shopman  !iutliori/,('d  to  rective 
payment  over  tlie  comifer.  who  receives  money  elsewhere  than  in  the  siioji, 
see  Kaye  v.  I'.n'tt,  ',  Kx.  2«;0,  10  I,.  .7.  Ex.  ;!4(',  (ls.-()).  As  to  payment  to  a 
cierli  of  diMu.'Hids  lia\iii.r  no  connection  with  the  business,  see  Boweu  v.  School 
Dist.,  :Aj  .Mich.  149  (1.S77). 


416  THE  AriiioKii'Y  (Part  2 

aiul  the  scrivener  not  liavint;-  the  bond  in  liis  cns(<^(ly.  _<;nve  the  plain- 
tirt"  a  receipt  for  ioO.  received  in  part  for  the  use  of  the  defendant 
Mattliews. 

Adjudged  tills  was  a  void  payment  ;  for  the  h(~>nd  being  in  the 
custody  of  the  defenilant  Mattliews,  and  not  in  the  scrivener's,  the 
plaintiff  ought  to  have  seen  his  money  indorsed  on  the  bond;  and 
though  this  alone  were  enough  to  make  it  an  ill  payment,  yet  this 
case  was  the  stronger;  for  that  the  plaintiff  was  not  ignorant  whose 
money  it  was ;  the  receipt  he  took  for  the  payment  of  the  i30.  being 
for  the  use  of  the  defendant.  And  many  precedents  were  cited  to 
the  same  purpose. 


MARTYN  V.  KINGSLEY. 

(High  Court  of  Chancery,  1702.     Finch,  Precedents  in  Chancery,  209.) 

In  this  case  a  difference  was  made,  where  a  man  trusts  his  scrivener 
(who  puts  out  money  for  him)  with  the  custody  of  his  bond,  and 
where  with  the  custody  of  his  mortgage ;  in  the  first  case,  if  he  re- 
ceive the  money,  and  delivers  up  the  bond,  this  shall  bar  the  obligee; 
not  so  in  the  case  of  a  mortgage,  because  a  legal  estate  is  vested, 
which  cannot  be  divested  without  assignment. 


WOLSTENHOLM  v.  DAVIES. 

(High  Court  of  Chancery,  1705.    2  Freeman,  Ch.  289,  2  Eq.  Cas.  709.) 

The  plaintiff  having  borrowed  £100.  of  the  defendant's  testator 
upon  bond,  which  was  procured  by  Williams,  a  scrivener  in  the  Old 
Bailey;  when  the  bond  was  sealed,  it  was  delivered  to  the  obligee; 
the  plaintiff  paid  several  years  interest  to  Williams,  the  scrivener, 
and  £50.,  part  of  the  principal  money,  which  the  scrivener  paid  to 
the  obligee,  but  the  last  £50.  of  the  principal  money  being  paid  to  the 
scrivener,  he  broke  before  he  paid  it  to  the  obligee ;  and  the  question 
was,  whether  Sir  Jo.  W.  the  plaintiff  was  to  lose  the  money,  or  the 
obligee?  And  the  Master  of  the  Rolls  said,  that  it  was  the  constant 
rule  of  this  court,  that  if  the  party,  to  whom  the  security  was  made, 
trusted  his  security  in  the  hands  of  the  scrivener,  that  payment  to 
the  scrivener  was  good  payment,  but  if  he  took  the  security  into  his 
own  keeping,  payment  to  the  scrivener  would  not  be  good  payment, 
unless  it  could  be  proved  that  the  scrivener  had  authority  from  the 
party  to  receive  it ;  and  although  in  this  case  the  scrivener  had  re- 
ceived the  interest  and  part  of  the  principal,  and  paid  it  to  the  obligee, 
yet  that  did  not  imply  that  he  had  any  authority  to  receive  it;  but 
as  long  as  he  paid  it  over,  all  was  well,  and  any  one  else  might  have 
carried  to  the  party  as  well  as  he;   and  the  plaintiff  not  proving  that 


Ch.  1)  NATURE    AND    EXTENT  417 

the  scrivener  had  any  authority  from  the  obligee  to  receive,  he  was 
forced  to  pay  the  last  i50.  again,  although  the  Master  of  the  Rolls 
declared  that  he  thought  it  a  very  hard  case. 


CURTIS  V.  DROUGHT.* 
(High  Court  of  Chancery  in  Ireland,  1828.    1  Molloy,  487.) 

D.  Robert,  the  common  agent  of  Margaret  Bradford  and  of  Thos. 
Drought,  negotiated  a  loan  of  i300.  by  the  former  to  the  latter,  taking 
and  delivering  to  Miss  Bradford  a  bond  therefor.  Drought  regularly 
paid  the  interest,  and  finally  the  principal,  to  Robert.  In  1816  she 
died  and  her  executor  sues  on  the  bond. 

Hart,  Ld.  Ch.^  *  *  *  As  to  the  acquittance  of  the  debtor  by 
the  agent,  if  one  employs  an  agent  to  lend  money,  and  take  a  secu- 
rity which  he  delivers  to  his  principal,  he  has  no  authority  to  dis- 
charge the  debtor. 

No  one  would  be  safe  if  an  attorney  who  was  employed  to  take  a 
security  for  money  could  be  permitted  to  say  he  had  received  back 
the  amount  and  discharged  the  debtor.  There  has  often  been  a  ques- 
tion touching  the  extent  of  the  authority  of  an  agent  who  has  been 
permitted  to  hold  the  security  in  his  hands,  whether  he  had  power  to 
cancel  the  security  and  discharge  the  debt ;  and  there  are  some  cases 
of  great  nicety  upon  that.  Martyn  v.  Kingsley,  Pre.  Ch.  209,  ante, 
p.  416.  But  it  has  never  been  heard  of  when  the  owner  has  had  the 
precaution  to  take  the  instrument  containing  the  evidence  of  the  debt 
into  his  own  custody,  that  the  agent  then  had  authority  to  receive  the 
amount  and  give  a  valid  acquittance.     *     *     * 


JOY  V.  VANCE. 

(Supreme  Court  of  Michigan,  1895.    104  Mich.  97,  62  N.  W.  140.) 

Bill  to  foreclose  a  mortgage.  Defense  payment.  Comi)lainants 
purchased  the  mortgage  and  four  accompanying  notes,  and  as  the  in- 
terest notes  fell  due,  sent  them  to  the  Michigan  Mortgage  Company 
for  collection.  The  Vance  mortgage  became  due  February  28,  1891. 
March  11.  1892,  Vance  paid  the  mortgage,  taking  a  receipt  of  the 
Michigan  Mortgage  Company  in  full.  The  latter  failed  to  pay  it  to 
complainant  and  soon  after  failed. 

'Accord:    Whltlook   v.  Wiiltluim,  1   Sulkcld,  157  (1708). 
•  Part  of  the  oidnion  Is  omitted. 
Gorni.rR.&  A. — 27 


6UaIA^' 


MS  TiiK  ArriioKirY  (Tart  2 

1I(Hiki:r.  _!.■•  *  -^  *  'I'he  t-;isc  is  rc(liu-oi1,  (luMvforo.  to  the 
sing^le  question  cU"  ilio  auilunity  i)f  ilir  Mirhi^an  Mortgage  Company 
to  receive  the  money  upon  the  mortgage.  Unless  \vc  are  to  say  that 
ihe  collection  of  the  interest  thnnigh  this  com])any,  fioni  time  to 
time,  constiluteil  it  an  agent  for  the  collection  of  suhsecpient  install- 
ments of  interest  ami  the  principal,  we  cannot  deny  complainants  the 
relief  sought.''  \'ance  admits  he  paid  the  interest  to  the  company 
without  taking  the  trouhle  to  ascertain  whether  they  had  the  mort- 
gage or  who  owned  it.  When  he  paid  the  mortgage,  he  was  satis- 
fied with  the  statement  that  the  mortgage  was  mislaid,  although  he 
received  a  receipt  which  indicated  that  it  did  not  belong  to  the  com- 
pany to  whom  he  was  paying  it.  It  was  perhaps  the  natural  thing  for 
liim  to  pay  it.  in  reliance  upon  the  statement  of  these  men  with  whom 
he  was  acquainted  and  in  whom  he  had  confidence;  but  his  rights 
must  depend  upon  their  authority  to  receive  the  money,  not  upon  his 
confidence  in  them. 

Defendants'  counsel  claim  that  there  was  a  general  authority  to  col- 
lect from  the  fact  that  Mr.  Cutcheon  was  in  the  habit  of  having  this 
company  make  collections  for  his  clients,  including  this  estate  for 
which  he  had  purchased  several  mortgages  from  the  company.  The 
authority  of  the  company  does  not  depend  upon  the  amount  of  busi- 

*  Part  of  the  opinion  is  omitted. 

5  As  to  the  implied  authority  of  an  agent  authorized  to  collect  the  Interest, 
to  receive  the  jn-indpal  also,  see  Security  To.  v.  Gra.vbeal.  S5  Iowa,  54.S,  52 
N.  W.  497.  rji)  Am.  St.  Kep-  -'ni  (1802);  Douhleday  v.  Kress,  50  N.  Y.  410,  10 
Am.  Itep.  502  (1S72)  ;  Wilson  v.  Camjibell,  110  Mich.  580,  68  N.  W.  278,  35 
L.  K.  A.  544  (189(i).  One  may  be  willing  to  intrust  to  the  agent  the  collection 
of  the  interest,  and  unwilling  to  place  in  his  hands  the  collection  of  the  prin- 
cipal note.  White  v.  Madigan,  7S  Minn.  286,  80  N.  W.  1125  (1899).  When  one 
bond  is  left  with  the  agent,  and  the  others  are  not  in  his  possession,  the 
agent  has  authority  to  collect  the  one,  but  not  the  others.  Ward  v.  Smith,  7 
Wall.  447,  19  L.  Ed.  207  (1809).  And  when  the  third  person  makes  various 
payments  he  will  be  protected  as  to  payments  made  while  the  securities  are 
in  the  agent's  possession,  but  not  as  to  payments  made  after  the  securities 
have  left  the  hands  of  the  agent.  If  estoppel  is  relied  upon  to  show  the  au- 
thority, the  third  person  must  have  known  that  the  agent  had  the  securities, 
though  it  is  not  necessary  that  he  should  have  seen  them.  Crane  v.  Gruene- 
wald.  120  N.  Y.  274,  24  X.  E.  456,  17  Am.  St.  Hep.  643  (1890).  When  the  prin- 
cipal withdraws  the  instruments  evidendng  the  debt,  that  is  an  implied  revoca- 
tion of  the  authority  of  the  agent.  I'.loomer  v.  Dau,  122  Mich.  522,  81  N. 
W.  ;J.'li  (1899).  And  it  has  even  been  held  that  the  authority  is  revoked  when 
the  agent  wrongfully  assigns  the  debt  to  another  party,  ('rane  v.  (iruene- 
wald,  supra.  .Neither  mere  authority  to  make  a  loan.  Fortune  v.  Stockton, 
182  111.  454.  55  X.  E.  307  (1899j ;  Antioch  College  v.  Carroll,  11  Ohio  Dec.  ( Re- 
print) 220  (1890) ;  nor  mere  possession  of  the  securities  b.y  an  agent  who  has 
had  no  other  connection  with  the  loan,  gives  implied  authority  to  collect  the 
debt,  I)..ubleday  v.  Kress.  50  X.  Y.  410,  10  Am.  Rep.  502  (1872) ;  Fnion  Cent.  L. 
Ins.  v.  .Tones.  :',5  Ohio  St.  .351  (18S0) ;  McMahoii  v.  (Jerm.  Am.  Xat.  Bk.,  Ill  Minn. 
313,  127  X.  W.  7,  29  L.  R.  A.  (X.  S.)  67  (1010).  Both  conditions  must  concur. 
Oentral  Trust  Co.  v.  Folsom,  1(;7  X.  Y.  285,  60  X.  E.  5i)9  (1901).  The  mere 
fact  that  a  note  is  payable  at  the  agent's  office  amounts  to  a  designation  of 
the  pl.iee  of  payment,  but  not  of  the  person  authorized  to  receive  it.  Klindt 
v.  Iliggins,  95  Iowa,  529,  i'A  X.  W'.  414  (1895) ;  Caldwell  v.  Evans,  5  Bush, 
380,  96  Am.  Dec.  3-58  (1869);  Ward  v.  Smith,  7  Wall.  447,  19  L.  Ed.  207  (1869); 
Wood  V.  Merchant's  Savings  Loan  &  Trust  Co.,  41  111.  267  (1866). 


Cll.  1)  NATURE    AND    EXTENT  419 

ness  done  by  it  for  the  complainants,  but  upon  the  character  and  ex- 
tent of  the  employment,  as  evidenced  by  the  express  authority  con- 
ferred and  the  method  of  their  dealing  with  it.  Campbell  v.  Sher- 
man, 49  Mich.  536,  14  N.  W.  484.  So  far  as  shown,  Mr.  Cutcheon 
retained  the  custody  of  his  papers,  sending  from  time  to  time  specific 
authority  and  directions  for  the  performance  of  particular  and  desig- 
nated acts.  We  search  the  record  in  vain  for  evidence  that  he  gave 
a  general  authority  to  collect  mortgages  purchased  or  held  by  him. 
He  found  them  profitable  business  acquaintances,  for  they  had  mort- 
gages which  he  wished  to  buy ;  but  he  appears  to  have  carefully  man- 
aged the  collections  in  a  way  which  enabled  him  to  keep  track  of 
them,  as  a  prudent  lawyer  should  for  clients  who  confide  their  busi- 
ness to  him.  He  had  a  right  to  suppose  that  the  mortgagor  would 
not  pay  notes  or  mortgage  without  receiving  them,  and  by  keeping 
them  in  his  own  hands  he  interposed  the  only  practicable  obstacle 
to  the  perpetration  of  a  fraud  by  the  mortgage  company.  Had  the 
mortgagor  been  as  careful  to  ascertain  the  authority  of  the  company 
as  the  complainants  were  to  restrict  it,  no  one  would  have  suffered. 
As  it  is,  the  loss  should  fall  upon  him,  and  not  upon  the  complain- 
ants, who  are  in  no  way  responsible  for  it. 

The  decree  of  the  circuit  court  must  be  reversed,  and  one  entered 
here  for  the  complainants,  as  prayed  in  the  bill,  with  costs  of  both 
courts. 


SMITH  V.  KIDD.« 
(Court  of  Appoals  of  Now  York.  IMT.    (58  X.  Y.  l.^.O.  2.",  Am.  Rep.  157.) 

Action  to  foreclose  two  mortgages.  The  mortgages  had  been  paid 
to  one  George,  who  was  found  by  the  trial  judge  to  be  the  general 
agent  of  the  plaintiff  in  the  matter  of  investing,  managing,  collecting, 
and  securing,  both  principal  and  interest,  moneys  belonging  to  plain- 
tiff. George  gave  defendant  a  receipt,  and  promised  to  get  the  pa- 
pers from  Miss  Smith,  but  he  never  did  so,  and  later  absconded. 

Rai'ALLO,  J.^  :c  *  *  Laying  out  of  view  the  subsequent  deal- 
ings had  by  the  plaintiff  with  George,  in  ignorance  of  his  fraudulent 
conduct,  it  is  very  plain  that  there  is  no  evidence,  that  at  the  time 
of  this  payment,  April  1,  1<S67,  George  had  any  authority  to  receive 
the  princijial  of  these  two  mortgages  as  her  attorney.  Had  this  con- 
troversy arisen    immediately  after  that   payment   it  is  clear   that   the 

oAcford:  Tiippnn  v.  MorsciiiMH,  is  IdWii,  -t!)0  dSi!.')).  Wlicii  lln-  third  per- 
son nfti'iiipts  to  show  osteiisililc  iiiMhorily  in  flie  ii^'eiit  In  cnHiM  (,  iii>l\>illi- 
stjimiiim  till'  securities  iire  ii<»t  in  iiis  posscssimi,  tlie  Imrdcn  of  proof  is  on 
s>h1i  tliiril  person.  ;ind  if  tlie  evidence  is  sncli  tliiit  different  minds  nd^'ht  reii- 
soniil)l.v  draw  dilTerent  ronelusions  tiierefroin.  tiien  it  is  u  (juestion  for  tlie 
jury.    "Uehl  V.  KelJoL'U.  H  S.  I>.  .I'M;,  <;7  N.  \V.  0S7  (IS'.XJ). 

7  I'urt  of  the  iiiiinioi)  Is  omitte<l. 


420  TiiR  AUTiioKiTY  (Part  2 

dcfoiulaiit  must  have  faiK\l  in  his  ilofcnsc.  IMiss  Smith,  the  plaintiff, 
was  the  only  witness  by  whuin  he  sought  to  prove  actual  authority, 
and  she  expressly  negatived  it.  There  was  no  evidence  of  apparent 
authority  at  that  time,  for  George  had  never  before  undertaken  to 
collect  principal.  The  fact  that  the  jilaintiff,  on  the  31st  of  March, 
1S66.  advanced  the  money  to  McKinncy  through  George  was  no  proof 
of  authority  to  him  to  collect  the  principal,  when  she  did  not  intrust 
him  with  the  custody  of  the  securities,  but  held  them  in  her  own  pos- 
session. Neither  was  the  defendant  warranted  by  the  fact  of  the  at- 
torney being  authorized  to  collect  the  interest,  in  inferring  that  he 
was  also  authorized  to  receive  the  principal.  Such  authority  in  the 
absence  of  direct  proof,  may,  in  some  cases,  be  inferred  from  the 
attorney  having  possession  of  the  bond  and  mortgage,  but  in  such  cases 
it  is  incumbent  upon  the  debtor  who  makes  payments  to  the  attorney, 
to  show  that  the  securities  were  in  his  possession  on  each  occasion 
when  the  payments  were  made,  for  the  withdrawal  of  the  securities 
would  be  a  revocation  of  the  authority.  Williams  v.  Walker,  2  Sandf. 
Ch.  325.  and  cases  cited;  Doubleday  v.  Kress,  50  N.  Y.  410,  10  Am. 
Rep.  502. 

The  finding  that  George  was  the  general  agent  of  the  plaintiff  in 
the  matter  of  collecting  both  principal  and  interest  prior  to,  and  at 
the  time  of,  the  payment  in  question,  therefore,  depends  wholly  for 
its  support  upon  the  subsequent  transactions,  from  which  a  general 
agency  is  sought  to  be  implied  retroactively.  These  transactions  con- 
sisted in  the  receipt  by  George  of  the  interest  on  plaintiff's  bonds  and 
mortgages  and  his  payment  over  of  such  interest  to  the  plaintiff,  while 
she  retained  possession  of  the  securities.  That  authority  to  collect 
interest  in  such  cases  does  not  afford  ground  for  inferring  authority 
to  collect  principal,  where  the  agent  or  attorney  is  not  intrusted  with 
the  possession  of  the  securities,  was  expressly  adjudicated  in  Wil- 
liams V.  Walker,  2  Sandf.  Ch.  325.  That  decision  is  abundantly  sus- 
tained by  authority  and  has  frequently  been  cited  with  approval.  It 
appears  from  the  correspondence  put  in  evidence,  that  it  was  the  reg- 
ular practice  of  George,  whenever  he  made  a  loan,  to  send  to  the 
plaintiff  for  the  money,  and  when  the  transaction  was  consummated 
to  send  her  the  bond  and  policy  of  insurance,  and  the  mortgage  when 
recorded. 

The  only  instances  in  which  he  appears  to  have  collected  principal 
with  her  knowledge  or  sanction,  occurred  in  1869,  1870  and  1871, 
when  it  appears  from  written  statements  rendered  by  him  to  plaintiff, 
that  he  received  the  principal  of  certain  mortgages  and  re-invested 
the  proceeds  in  other  mortgages,  and  in  1873  she  sent  him  a  mortgage 
for  collection.  These  transactions  having  occurred  long  after  the 
payment  made  by  McKinney  are  not  evidence  of  apparent  authority 
on  which  he  was  authorized  to  rely,  but  are  only  available,  if  at  all, 
as  evidence  of  actual  authority,  and  their  force  in  this  respect  de- 
pends upon  the  circumstances  under  which  the  payments  were  made. 


Ch.  1)  NATURE   AND    EXTENT  421 

If,  in  these  instances,  the  plaintiff  placed  the  securities  in  his  posses- 
sion, or  delivered  satisfaction-pieces  to  him  prior  to  his  receiving  the 
money,  or  otherwise  expressly  empowered  him  to  collect  the  princi- 
pal, they  would  afford  no  evidence  of  an  actual  general  authority  to 
collect  mortgages  not  placed  in  his  hands,  or  which  he  was  not  other- 
wise expressly  authorized  to  collect,  the  question  being  one  of  actual 
authority  and  not  apparent  authority,  by  which  the  defendant's  course 
was  influenced.  There  is  no  evidence  that  George  was  not  intrusted 
with  the  possession  of  the  mortgages  thus  collected,  or  of  satisfac- 
tion-pieces thereof,  nor  any  evidence  of  the  circumstances,  except 
the  testimony  of  the  plaintiff  herself,  who  testified  that  she  never 
verbally  or  in  writing  gave  to  George  any  express  authority  to  collect 
the  principal  of  her  mortgages  generally,  or  at  any  time  gave  him  au- 
thority to  collect  money  for  her  generally.  That  mortgages  were  never 
paid  to  him,  to  her  knowledge,  by  any  person  without  her  express 
authority  and  consent,  and  that  the  mortgages  paid  by  her  authority 
were  satisfied  of  record  by  satisfaction-pieces  signed  by  her  for  that 
specific   purpose.     This   evidence  was   uncontroverted.     *     *     * 

But  there  are  settled  principles  specially  applicable  to  cases  like 
the  present,  which  render  immaterial  much  of  the  inquiry  in  relation 
to  implied  authority.  These  are  collated  in  Dunlap's  Paley  on  Agency^ 
p.  274,  as  follows,  and  seem  fully  to  cover  this  branch  of  the  case. 

If  money  be  due  on  a  written  security,  it  is  the  duty  of  the  debtor, 
if  he  pay  to  an  agent,  to  see  that  the  person  to  whom  he  pays  it  is 
in  possession  of  the  security.  For  though  the  money  may  have  been 
advanced  through  the  medium  of  the  agent,  yet  if  the  security  do 
not  remain  in  his  possession,  a  payment  to  him  will  not  discharge  the 
debtor.  Henn  v.  Conisby,  1  Ch.  Cas.  93,  note.  And  even  the  agent 
being  usually  employed  in  the  receipt  of  money,  does  not  in  this  in- 
stance constitute  such  authority  as  will  serve  the  debtor.  It  has  been 
so  held  in  respect  to  money  paid  upon  a  bond  to  one  who  usually 
received  money  for  the  obligee,  but  who  had  not  the  custody  of  the 
bond  in  question  (Gerard  v.  Baker,  1  Ch.  Cas.  94),  and  even  where 
the  obligor  had  for  several  years  paid  the  interest  and  part  of  the 
principal  to  an  agent  of  the  lender  through  whom  the  money  had  been 
borrowed,  who  had  not  the  possession  of  the  bond,  but  had  regu- 
larly paid  the  money  over  to  the  obligee  except  the  last  payment,  the 
obligor  was  adjudged  to  pay  the  last  sum  over  again.  For  it  was 
held,  notwithstanding  the  hardship  of  the  case,  that  the  circumstance 
of  the  agent's  having  before  received  the  interest  and  part  of  the  prin- 
cipal, did  not  imply  that  he  had  any  authority  to  receive  it,  but  as  long 
as  he  paid  it  over  all  was  well,  and  any  other  nn'ght  have  carried  it 
to  the  creditor  as  well  as  he.  Wolstenholni  v.  Davies,  1  Freem.  Ch. 
289.  In  this  case  the  master  of  the  rolls  said,  that  it  was  the  constant 
rule  of  that  court,  that  if  the  party  to  whom  the  security  was  made, 
trusted  the  security  in  the  hands  of  the  scrivener,  payment  to  the 
scrivener  was  good  payment,  but  if  he  took  the  security  into  his  own 


422  TiiK  AUTuouiTY  (Part  2 

keeping,  payment  to  the  serivener  would  not  be  f::ootl  payment,  un- 
less it  eouUl  be  proved  that  the  scrivener  had  authority  from  the 
party  to  reeeive  it,  and  that  sueli  aulliorily  eoukl  not  be  imi)lied  from 
tlie  faet  tliat  the  serivener  liad  previously  received  i)rineipal  which 
he  had  paid  over  to  the  obligor.  See  also  Story,  Agency,  §§  98,  104; 
Curtis  V.  Orought.  1   IMolloy,  487. 

These  principles  were  applied  in  the  case  of  Williams  v.  Walker, 
before  cited,  and  although  payments  of  princi])al  had  been  made  to 
the  attorney  while  he  had  the  bond  and  mortgage  in  his  possession, 
and  these  payments  were  allowed,  subsequent  payments  made  to  the 
same  attorney  when  the  bond  and  mortgage  were  not  in  his  posses- 
sion were  disallowed,  and  it  was  held  not  to  be  incumbent  upon  the 
creditor  to  show  notice  to  the  debtor,  of  the  withdrawal  of  the  papers 
from  the  possession  of  the  attorney,  but  that  it  was  the  duty  of  the 
party  paying,  on  each  occasion,  to  require  the  production  of  the  bond. 

It  is  clearly  established  that  in  the  present  case  the  securities  were 
not  confided  to  the  attorney,  but  were  in  the  plaintiff's  possession  at 
the  time  of  the  payment,  and  that  McKinney  paid  without  requiring 
their  production.  The  case  is  much  stronger  than  any  of  those  cited, 
for  it  appears  here,  that  George  was  at  the  time  the  attorney  of  Mc- 
Kinnev.  the  receipts  which  he  gave  were  not  signed  in  the  name  of 
the  plaintiff',  and  McKinney  trusted  to  the  promise  of  George  to  get 
the  papers.  And  what  was  said  in  Henn  v.  Conisby,  1  Ch.  Cas.  93, 
is  peculiarly  applicable.  "The  circumstance  of  the  creditor  keeping 
the  security  is  conclusive.  No  man  would  pay  the  money  due  on  a 
mortgage  or  bond  without  having  the  security  given  up.  The  debt- 
or's payment  to  the  scrivener  without  taking  up  his  security  was  an 
evidence  that  he  trusted  the  scrivener  more  than  the  creditor  did,  who 
always  kept  the  security." 

Any  other  principle  w^ould  be  dangerous  in  the  extreme.  If  the 
fact  that  a  capitalist  makes  investments  on  bond  and  mortgage 
through  an  attorney,  and  employs  him  to  collect  the  interest,  and  in 
special  cases  authorizes  him  to  collect  the  principal  of  particular  mort- 
gages, is  sufficient  to  warrant  a  finding  of  a  general  authority  to  col- 
lect the  principal  of  all  the  mortgages  of  the  client,  notwithstanding 
that  the  client  takes  the  precaution  to  retain  his  securities  in  his  own 
possession,  no  investor  would  be  safe.  Therefore  the  rule  has,  in 
the  adjudicated  cases,  been  strictly  adhered  to,  that  the  possession 
of  the  securities  by  the  attorney,  is  the  indispensable  evidence  of  his 
authority  to  collect  the  principal  (1  Molloy,  487),  and  that  whoever 
pays  him  without  that  evidence  does  so  at  his  own  risk,  unless  he  can 
prove  express  authority  aliunde,  and  that  the  fact  that  the  agent  has, 
on  other  occasions,  received  principal  which  he  has  paid  over  to  his 
client  is  not,  in  this  instance,  proof  of  such  authority. 

In  regard  to  the  $2,400  mortgage,  this  case  presents  the  further 
feature,  that  at  the  time  of  the  payment,  the  mortgage  had  still  four 
years  to  run.     No  authority  to  change  the  terms  of  the  contract  can 


Ch.  1)  NATURE    AND    EXTENT  423 

be  implied  from  the  fact  that  it  was  originally  made  through  the  at- 
torney, and  there  is  no  evidence  in  this  case  of  any  such  authority. 
Even  though  an  agent  have  authority  to  receive  payment  of  an  obliga- 
tion, this  does  not  authorize  him  to  receive  it  before  it  is  due.  Camp- 
bell V.  Hassel,  1  Stark.  185;  Parnther  v.  Gaitskell,  13  East,  437,  438; 
Story,  Agency,  §  98;  Doubleday  v.  Kress,  supra;  Fellows  v.  North- 
rup,  39  N.  Y.  121,  122;   2  Greenl.  Ev.  §  64. 

For  all  these  reasons  we  are  of  opinion  that  the  finding  that  George 
had  authority  to  receive  the  principal  of  the  mortgages  cannot  be  sus- 
tained.    *     *     * 

The  plaintiff  seems  to  be  entirely  free  from  fault.  She  took  her 
bonds  and  mortgages  into  her  own  custody  and  retained  them,  and 
had  a  right  to  rely  upon  the  rule  of  law,  that  although  she  might  al- 
low her  attorney  to  collect  the  interest,  he  would  have  no  power  to 
collect  the  principal  without  special  authority,  so  long  as  she  did  not 
intrust  him  with  the  papers.  McKinney  seems  to  have  confided  in 
George,  who  was  also  his  attorney,  and  to  have  been  willing  to  place 
the  money  in  his  hands,  trusting  to  his  promise  to  get  the  papers; 
and  without  inquiry  into  his  authority,  or  any  ostensil)le  authority, 
seems  to  have  reposed  for  years  upon  the  promise  of  George,  without 
inquiring  whether  the  papers  had  been  obtained  or  the  mortgages 
satisfied,  or  calling  upon  the  plaintiff  to  satisfy  them.  One  of  the 
parties  must  suffer  from  the  fraud  of  George,  and  we  think  that  on 
the  facts  now  before  us,  the  loss  has  resulted  from  the  negligence 
of  McKinney  or  from  his  confidence  in  George,  and  not  from  any 
appearance  of  authority  conferred  upon  liim  by  the  plainlitf,  by  which 
the  defendant  was  misled. 

The  judgment  must  be  reversed  and  a  new  trial  ordered,  with  costs 
to  abide  the  event.    All  concur  except  Ciilkcii,  C.  J.,  dissenting. 


HARRISON  NAT.  B.\NK  OF  CADIZ.  OHIO,  v.  AUSTIN. 

(Supreme  Court  of  Nel)raska,  lOOli.     Qr,  Nob.  (\:V2.  !)1   X.   W.  540,  59  L.  11.  A. 
121)1,  101  Aui.  St.  Uop.  <);'.'•>.) 

Suit  to  foreclose  a  mortgage.  One  llurr  conducted  an  extensive 
loan  agency  in  Nebraska,  defendants  and  others  furnishing  him  tlic 
money,  and  buying  fmm  him  notes  and  mortgages  made  out  to  him 
and  bv  him  indorsed  and  assigned  and  delivered  to  plaintiffs,  and 
other  leiiflers.  'J'he  note  and  mortgage  in  (|Uestion  was  one  of  many  on 
which  ihirr  had  collected  interest  and  i)rincipal,  and  failed  to  account 
for  the  principal. 

KiKKi'ATKiCK,  C."  ♦  ♦  ♦  I'loni  the  correspondence  in  the  rec- 
ord, and  from  other  testimony,  it  is  (|uite  clearly  established  that 
I'.urr  was  permitted  by  appellant  to  manage  these  loans,  collect  hoili 

^  I'iirt  of  llif  o|iiiiiciii  is  (iiiiiitc(]. 


t-1  TiiK  Ai  riKMurY  (Part  2 

principal  aiul  interest,  in  all  respects  as  thouj;!!  they  were  his  own,  ap- 
pellant having  apparently  neither  knowlecl,i;e  nor  concern  abont  the 
borrowers  themselves.  The  officers  of  the  ajipellant  bank  testify  that 
these  conjions  and  notes  were  sent  to  Bnrr  for  payment  on  acconnt  of 
his  indorsement,  and  not  for  collection. 

It  is  suggested  by  counsel  for  appellee,  and,  we  think,  aptly,  that  this 
claim  of  appellant  is  not  consistent  with  sound  business  principles,  nor 
is  it  the  usual  method  pursuetl  by  banks  having  paper  for  collection. 
These  notes  and  mortgages  were  made  payable  at  the  First  National 
Dank  at  Lincoln,  and  the  uniform  custom  of  ai)pellant  in  sending  them 
to  Burr  instead  of  the  bank  cannot  be  reconciled  with  reason  and 
sound  business  methods  if  the  contention  of  appellant  that  they  were 
sent  to  Burr  as  indorser  or  guarantor  is  to  be  credited.  The  fact  that 
they  were  uniformly  sent  to  Burr,  taken  in  connection  with  the  letters 
from  appellant  to  Burr  appearing  in  the  record,  showing,  as  they  do, 
the  custom  of  looking  to  Burr  for  the  collection  of  overdue  paper, 
quite  conclusively  establishes  the  contention  of  counsel  for  appellee 
that  Burr  was  the  agent  of  appellant,  and  was  so  regarded  by  it. 

Appellant  seems  to  have  availed  itself  of  Burr's  services  in  making 
these  collections,  placing  loans,  and  foreclosing  mortgages,  until  it 
was  discovered  that  Burr  was  in  failing  circumstances ;  and  this,  it 
appears  from  the  record,  was  a  discovery  made  more  than  a  year  after 
the  note  and  mortgage  in  suit  had  been  paid.  It  was  then  that  appel- 
lant made  an  investigation  of  its  business  in  Burr's  hands,  and  found 
that  he  had  misappropriated  some  $16,000.  Burr  testified  that  the 
officers  of  appellant  bank  were  in  Lincoln  on  different  occasions,  stay- 
ing in  some  instances  several  days,  visiting  at  his  office,  and  that  they 
must  have  known  of  the  manner  in  which  he  was  doing  business  for 
them.  It  is  true  that  Burr  did  not  have  the  note  and  mortgage  in  suit 
in  his  possession  at  the  time  he  made  the  collection ;  nor  did  he  have 
them  again  after  sending  them  to  appellant;  but  this  is  only  one  of 
the  circumstances  which  are  to  be  taken  into  consideration  in  determin- 
ing whether  or  not  Burr  was  in  fact  the  agent  of  appellant  in  the  col- 
lection of  the  note  and  mortgage  in  suit.  In  the  case  of  Insurance  Co. 
V.  Walter,  51  Neb.  182,  70  N.  W.  938,  this  court  said :  "That  the  party 
to  whom  money  due  another  is  paid  is  not  in  possession  of  the  instru- 
ment by  which  the  indebtedness  is  evidenced  is  not  conclusive  of  the 
question  of  the  authority  or  lack  of  it  in  the  party  receiving  the  money 
to  collect  it."  To  the  same  effect  is  Estey  v.  Snyder,  76  Wis.  624,  45 
N.  W.  415;  and  Dunn  v.  Hornbeck,  72  N.  Y.  87. 

Although  this  note  and  mortgage,  as  well  as  other  farm  mortgages 
handled  by  Burr  on  behalf  of  appellant,  were  made  payable  at  the 
First  National  Bank  at  Lincoln,  appellant  saw  fit  to  send  the  note  and 
mortgage  direct  to  Burr  for  collection,  and  allowed  him  to  deal  with 
the  borrowers  for  a  number  of  years  in  all  respects  as  though  he  was 
the  owner  of  the  mortgages.  In  the  case  of  Johnston  v.  Investment 
Co.,  46  Neb.  480,  64  N.  W.  1100,  ante,  p.  322,  this  court  said:  "Where 


Ch.  1)  NATURE   AND   EXTENT  425 

a  principal  has,  by  his  voluntary  act,  placed  an  agent  in  such  a  situation 
that  a  person  of  ordinary  prudence,  conversant  with  business  usages 
and  the  nature  of  the  particular  business,  would  be  justified  in  presum- 
ing that  such  agent  has  authority  to  perform  a  particular  act,  and  there- 
fore deals  with  the  agent,  the  principal  is  estopped  as  against  such 
third  person  from  denying  the  agent's  authority."  Holt  v.  Schneider, 
57  Neb.  523,  77  N.  \V.  1086. 

In  the  case  at  bar  the  apparent  authority  with  which  appellant 
clothed  Burr,  even  if  he  was  not  in  fact  its  agent,  and  the  acceptance 
by  appellant  of  all  the  benefits  of  his  acts  on  its  behalf,  is  such  that 
justice  requires  that  in  this  case  appellant  should  sustain  the  loss. 
It  conclusively  appears  from  the  exhibits  in  this  case  that  Burr  did 
frequently  collect  both  principal  and  interest  at  the  times  when  he  did 
not  have  the  notes  or  the  coupons  in  his  possession,  remitting  the 
amounts  collected  to  appellant,  who  thereupon  returned  to  him  for 
delivery  to  the  borrower  the  canceled  evidences  of  the  debts,  and  who 
in  no  instance  objected  to  this  course  on  the  part  of  Burr.  In  Bank  v. 
Ridpath,  47  Neb.  96,  66  N.  W.  37,  this  court  said:  "When  the  extent 
of  an  agent's  authority  is  in  issue,  no  special  instructions  having  been 
given  him,  his  actual  authority  to  do  a  particular  act  in  connection 
with  the  transaction  may  be  inferred  from  proof  that  the  principal 
had  authorized  or  ratified  similar  acts  in  connection  with  past  trans- 
actions of  the  same  character,  and  intrusted  to  the  agent  under  similar 
circumstances."  The  testimony  in  the  record  is  sufficient  to  establish 
the  fact  found  by  the  trial  court  that  Burr  was  the  general  agent  of 
appellant  in  Nebraska  for  the  negotiation  and  collection  of  farm  loans 
which  it  had  made  through  Burr,  and  the  right  to  collect  the  note 
before  due  sufficiently  appears  from  his  custom,  ratified  by  appellants, 
of  granting  extensions,  and  renewals  of  other  loans.  This  he  ap- 
parently did  wholly  without  objection  on  the  part  of  appellant,  and  his 
acts  concerning  which  were  ratified  by  appellant  when  brought  to  its 
notice."  ► 

B  When  the  habit  and  course  of  doallni?  of  the  agent  Is  shown  to  have  beon 
known  til,  aiul  iicniiitt<'(l  l)y,  Ihf  principal,  this  iiiiplicfl  iiower  may  lio  broad 
enouKli  to  authorize  the  a'.-'ent,  not  only  to  colloot  witiiout  the  securities  in 
his  possession,  hut  to  eonei-t  before  maturity,  or  to  foreclose  the  iiiorti,'a^e. 
The  various  "Kelly  Cases"  in  .Minnesota  well  illustrate  all  the  v:iri:Ui<ins  of 
the  agents  powers.  See  .Spriu;.'liel(l  Sav.  I'.anU  v.  Kjaer.  SI.'  Minn.  l.M».  .S4 
N.  W.  I'i'l  (I'JOl),  and  the  cases  there  discriminated;  Thornton  v.  Lawlher, 
169  111.  2128,  48  N.  E.  412  (1897),  a  case  of  remarkable  confidence  repo.sed  in 
the  aKcnt. 

l'o.ssession  of  the  securities,  or  the  want  of  It,  while  a  fact  of  Kreat  sig- 
nificance, is  not  In  every  case  essential  to  determine  imjilied  power,  or  the 
lack  r)f  it.  to  collect  the  debt.  Inion  Trust  Co.  v.  Mclveon,  7G  Conn.  .lOS,  57 
Atl.  109  (1904). 

While  one  having  in  his  possession  a  negotiable  i)ai)er  Indorsed  In  blank, 
or  to  his  order,  may  transfer  good  title  to  it,  yet,  if  he  hold  it  as  an  agent,  the 
jirinclpal  will  not  be  bound  to  third  jmi-sohs  having  knowledge  of  the  agency, 
unless  the  act  of  the  agent  is  within  the  scope  of  his  authority.  .Mercliauts' 
6c  .Manufacturers'  I'.ank  v.  Ohio  Valley  Furniture  Co.,  57  W.  Va.  025,  50  S.  K. 
880,  70  L.  K.  A.  :J12,  ante,  p.  ?,m  (lOtr.). 


426  TiiK  AiriKMtrrY  (Part  2 

It  appears  that  the  fnnhiii^i's  aiul  jiuli^meiit  nf  the  trial  eoiirt  are 
sustaiiicil  by  snfHcieiit  competent  evidence,  and  are  ri^ht,  and  it  is, 
therefore,  recommended  that  the  same  he  aft'irmoih 

Pick  Cl'RiAM.  I'or  the  reasiMis  stated  in  the  foregoing  opinion, 
the  judgment  oi  the  tUstrict  enurt  is  alTunied. 


■  ,    / 

(C)   What  Rccciird  in  Payment 
BARKER  V.  GREENWOOD. 

(Court  of  Excboquer  in  Etiuity,  1S37.    2  Younjie  &  C.  414,  6  L.  T.  Ex.  Eq.  54.) 

AldErson,  P).  This  was  a  bill  filed  by  the  plaintiff,  claiming  an 
account  of  certain  monies  paid  by  the  defendant  as  the  purchaser  of 
an  estate,  sold  by  the  late  Rev.  Mr.  Barker  to  him.  through  the  agency 
of  a  Mr.  Churchill,  a  solicitor.  The  bill  prays  a  declaration  that  there 
is  a  lien  on  the  estate  for  the  purchase-money  remaining  unpaid. 
There  is  no  doubt  that  if  the  purchase-money  remains  unpaid,  the 
plaintiff  is  entitled  to  the  declaration  and  lien.  There  is  no  doubt, 
also,  as  to  the  payment  of  all  the  purchase-money  except  the  sum  of 
£7,675.  19s.  8d.  As  to  that,  the  facts  are  these :  A  distinct  authority 
was  given  to  Churchill,  with  the  assent  of  the  plaintiff,  to  receive  the 
purchase-money  from  the  defendant.  Now  this  sum  of  money  was  not 
actually  paid  ;  but  was,  on  the  19th  October,  1822,  set  off  in  an  account 
between  Churchill  and  the  defendant,  Churchill  being  indebted  to  the 
defendant  to  that  amount  at  the  time. 

I  think  it  is  satisfactorily  made  out  l)y  the  correspondence  that 
Mr.  Barker  was  indebted  to  Mr.  Churchill  in  some  amount,  and  in- 
tended that  Mr.  Churchill's  debt  should  be  paid,  and  only  the  balance 
of  the  moneys  received  by  Churchill  from  the  defendant  paid  over 
to  himself. 

I  must  also  assume,  for  the  present,  which,  however,  as  far  as  the 
facts  are  before  me,  is  very  questionable,  that  the  amount  of  this 
debt,  on  the  19th  October,  1822,  was  more  than  £7,675.  19s.  8d.,  the 
sum  set  off  in  account  between  Churchill  and  the  defendant;  and  then 
the  question  is  this — if  a  man,  being  indebted  to  his  own  agent,  au- 
thorize that  agent  to  receive  money  due  to  him  from  his  debtor,  in- 
tending that  he  should  thereout  pay  himself  his  own  debt,  does  he 
authorize  that  agent  impliedly,  to  the  extent  at  least  of  that  debt,  to 
receive  payment  in  any  way  he  may  think  fit?  I  think  he  does.  An 
agent,  with  a  general  authority  like  this,  is,  as  it  seems  to  me,  only 
bound  to  receive  payment  in  such  a  way  as  thereby  to  put  it  in  his 
power  comi)letcly  to  discharge  the  duty  he  himself  owes  to  his  prin- 
cipal. If,  therefore,  he  is  boimd  to  pay  the  whole  over  to  the  prin- 
cipal, he  must  receive  it  in  cash  from  the  debtor.  And  a  person  who 
pays  such  an  agent,  and  who  means  to  be  safe,  must  see  that  the  mode 
of  payment  does  enable  the  agent  to  perform  this,  his  duty.    If,  there- 


^/^-^Ch-^-] 


i  -x. 


Ch.  1) 


NATURE    AND    EXTENT 


427 


fore,  the  agent  be  not  a  creditor  of  his  principal,  he  must  receive  the 
whole  in  cash ;  for,  otherwise,  he  does  not,  by  the  act  done  between 
him  and  the  debtor,  put  himself  into  the  situation  of  being  able  to 
pay  it  over. 

Such  were  the  cases  of  Todd  v.  Reid,  4  B.  &  Aid.  210;  Russell  v. 
Eangley,  4  B.  &  Aid.  395 ;  Bartlett  v.  Pentland,  10  B.  &  C.  760 ;  and 
Scott  V.  Irving,  1  B.  &  Aid.  605.  For  in  those  cases  the  assured  was 
entitled,  as  between  himself  and  the  broker,  to  the  whole  amount  vpiich 
the  latter  might  have  received  in  cash  from  the  underwriter.  \  But 
if  the  agent  be  himself  a  creditor  of  the  principal,  and  the  principal  , 
intends,  when  he  makes  him  his  agent  to  receive,  that.he  shall  retain  /^  y 
his  own  debt  out  of  the  sum  received,  his  only  duty  is  \o  pay  over  to  ' 

the  principal  the  balance,  after  deducting  his  own  debt.'    If  he  there- 
fore  takes  care  to  receive  in  cash  that  balance,  he,  as  it)  seems  to  me,  ,>■  ,.    j^^^f 
puts  himself  into  a  situation  as  comi^letely  to  dischai;^e  his  duty  as  t-"'*^^' — '^^■""l/^^ 
if  he  had  received  the  whole  in  cash.     For  what  possible  difference  "• 

can  it  make  to  the  principal  whether  his  agent  receives  the  whole 
and  retains  part,  or  only  receives  that  balance  which  he  himself  is  en- 
titled to  receive  from  the  agent?  A  person  however  who  does  not 
take  the  ordinary  and  proper  course  of  paying  the  whole  in  money, 
m.ust  take  care  to  be  able  to  prove  that  the  agent  is  in  this  situation. 
If,  therefore,  he  pays  by  a  settlement  in  account,  he  takes  upon  liim- 
self,  in  such  a  case  as  this,  the  risk  of  being  able  to  shew  the  debt 
due  from  the  principal  to  the  agent,  and  the  specific  circumstances 
under  which  the  agent  was  appointed  to  receive  the  money.  Here 
these  circumstances  are  made  out,  but  still  he  must  shew  that  there 
was  a  debt  due  to  Churchill  from  ]\Ir.  Barker,  equal  at  least  to  the 
sum  set  off  in  account  between  himself  and  Churchill.^*' 

10  The  asent  has  no  implied  power  to  accept  merchandise  in  payment.  Pol- 
lock V.  f'olu'ii.  .".2  Ohio  St.  'A\  (ISTC) ;  Hays  v.  Lynn,  7  Watts.  .124  (is:5s).  Nor 
a  liill  of  «'xchan^'('.  nor  a  note.  Ward  v.  Kvans,  2  Ld.  Itayin.  !)2S  (ITO.*,);  Koh- 
son  V.  Watts,  11  Te.x.  7(»4  (isr>4).  This  is  esi)ecially  true  if  the  uierchaiidise 
is  fur  llie  iicrsoiiiil  use  of  the  agent.  Walton  (Juano  Co.  v.  McCall,  HI  (ia. 
114.  :;(;  S.  ]■:.  4<;ii  dlXiO);  sweeting  V.  I'earce,  7  C.  H.  N.  S.  44!);  2!)  L.  J.  C. 
r.  2(;.-,.  !»7  E.  ('.  L.  44!t  (IS.-.O).  Cf.  Diiseuiierry  v.  .McDole,  42  Wash.  470.  S") 
I'ac.  40  (lOO(i),  in  which  tlie  course  of  dealing  and  tlie  aiiitearance  of  autliority 
in  tlie  agent  wer««  held  t«i  hind  the  jirinciiial  liy  a  payment  to  tlie  agent  in 
grain:  .Niciiols  &  Shepard  Co.  v.  Hackney,  7s  Minn.  Mil,  SI  X.  W.  .■J22  (I'.KKi); 
in  wliirli  ac(('i)fance  of  a  note  was  within  the  aulliority;  and  Hurley  v.  Wat- 
son. <is  .Mi<li.  r.:;i.  :',•>  X.  W.  72(!  (ISSS),  in  which  the  general  rule  is  staled 
with  <learness  and  vigor.  .No  usage  can  sanclioii  a  inaclice  to  set  off  liay- 
nieiit  due  to  a  priixipal  on  the  agent's  Indehtedness  to  the  third  jierson.  Todd 
V.  Reid,  4  I'..  &  Aid.  210.  0  E.  C.  L.  4.")  (ls21);  .McAlpin  v.  Cassidy.  17  Te.\. 
441)  (ISf)*;),  ante,  p.  :{47. 

Sjiecial  emergencies  may  justify  an  inference  of  hruMder  iiower  in  an  agent, 
as,  e.  g.,  when  an  agent  was  given  "full  authority  to  ad  for"  a  creditor  ol  an 
insolvent  dehtor.  and  took  iiersmial  jirf'iierty  in  satisfaitioii  of  the  ilcht.  ( (liver 
V.  Sterling,  20  Ohio  St.  .'JOl  (1N7())  ;  or  when  an  agent  threw  olV  ."j;2()0  in  seHling 
a  inortgag*',  where  the  pr<i|ierty  was  not  w<irtli  more,  and  no  more  could  have 
been  collected.  Heed  v.  Ndrtlirup,  r.O  ,Ml<li.  4  12,  ir>  N.  W.  oC!  (iss;!).  lOveii 
in  such  a  ease,  however,  the  .settlement  must  lie  in  accord  with  the  ordinary 
mode  of  business  under  the  clnumstauees.  McAlpin  v.  Cassidy,  17  Tex. 
440  HS.-O). 


428  THE  AUTiiourrr  (Part  2 

I  propose  therefore  to  refer  lliis  (lueslicMi  to  the  Master,  namely, 
whether,  on  the  UXh  of  Octoher,  1S22,  P.arker  the  testator  was  in- 
ilebted  to  Churehill  in  any  and  what  anu)unt.  If  the  defendant  can 
shew  to  the  Master's  satisfaction  that  there  was  sueli  a  debt  then 
chie,  and  that  it  exceeded  or  eqnalled  the  sum  set  off  in  account  between 
him  and  Churchill,  this  hill  will  be  dismissed  ;  but  certainly  without 
costs,  because  the  bill  was  most  properly  filed  to  com[Kd  such  proof 
being  given,  and  its  necessity  arose  from  the  unusual  mode  of  settle- 
ment adopted  by  the  defendant.  If,  however,  the  defendant  cannot 
satisfy  the  Master  of  this,  the  plaintiff  will  be  entitled  to  a  declara- 
tion that  he  is  to  have  a  lien  for  the  whole,  if  there  be  no  debt — for 
the  balance,  if  the  debt  due  to  Churchill  at  the  time  in  question  (for 
the  subsequent  accounts  between  Barker  and  Churchill  are  wholly 
immaterial)  was  less  than  the  sum  set  off  in  account  between  Churchill 
and  the  defendant,  and  will  have  a  decree  with  costs  to  that  effect. 


DIXON  V.  GUAY. 
(Supreme  Court  of  New  Hampshire,  1900.    70  N.  H,  161,  46  Atl.  456.) 

Action  for  possession  under  landlord  and  tenant  act.  The  tenant 
had  given  the  landlord's  agent  in  payment  of  two  months'  rent  a 
bank  book  of  deposit  for  the  amount.  Judgment  for  plaintiff  and  de- 
fendant excepted. 

Parsons,  J.  "That  the  power  of  a  collecting  agent  by  the  general 
law  is  limited  to  receiving  for  the  debt  of  his  principal  that  which  the 
law  declares  to  be  a  legal  tender,  or  which  is  by  common  consent 
considered  and  treated  as  money,  and  passes  as  such  at  par,  is  es- 
tablished by  all  the  authorities.^^  The  only  condition  they  impose 
upon  the  principal,  if  anything  else  is  received  by  his  agent,  is  that 
he  shall  inform  the  debtor  that  he  refuses  to  sanction  the  unauthor- 
ized transaction  within  a  reasonable  period  after  it  is  brought  to  his 
knowledge."  Ward  v.  Smith,  7  Wall.  447,  452,  19  L.  Ed.  207;  Todd 
v.  Reid,  4  Barn.  &  Aid.  210;  Bartlett  v.  Pentland,  10  Barn.  &  C. 
760;    Howard  v.  Chapman,  4  Car.  &  P.  508;    Story,  Ag.  §§  98,  413. 

The  case  is  within  the  rule  laid  down.     Exception  overruled. 

11  "Illinois  currency"  is  not  money  which  the  agent  may  accept.  Graydon 
V.  Patterson,  1.3  Iowa.  2.56,  81  Am.  Dec.  4r!2  (18(i2).  Nor  are  depreciated  notes 
of  the  banks  of  Viri?inia.  Ward  v.  Smith,  7  Wall.  447,  19  L.  Ed.  207  (ISdO). 
Ar?  to  payment  in  Confederate  money,  see  Hendry  v.  Benlisa,  37  Fla.  609.  20 
.■^ouih.  SOO,  34  L.  R.  A.  283  (1896) ;  Fretz  v.  Stover,  22  Wall.  198,  22  L.  Ed. 
769  (1875). 


Ch.  1)  NATUEE    AND    EXTENT  42d 

]\IILLER  V.  EDMONSTON. 

(Supreme  Court  of  Judicature  of  Indiana,  1846.     S  Blackf.  291.) 

Dewf.y,  J.  At  the  February  term,  1844,  of  the  Dubois  Circuit 
Court,  Miller  sued  Edmonston  on  three  sealed  notes  alleged  to  be 
lost,  dated  26th  April,  1832,  each  for  $133,331/3,  one  payable  in 
twelve  months,  one  in  eighteen  months,  and  one  in  two  years.  The 
parties  submitted  the  cause  to  the  Court  upon  the  following  agreed 
case : 

The  notes  described  in  the  declaration  were  executed  by  the  de- 
fendant and  one  Morgan  jointly  and  severally.  On  the  8th  of  June, 
1836,  Miller  agreed  by  parol  with  Morgan,  for  a  certain  considera- 
tion, to  give  him  further  time  on  the  notes  until  the  25th  of  January 
following.  On  the  2d  of  August,  1841,  the  notes  having  been  pre- 
viously placed  by  Miller  in  the  hands  of  an  attorney  at  law  for  col- 
lection, without  any  special  instructions,  the  attorney  took  from 
Morgan  his  unsealed  note  for  $626,  payable  to  Miller  one  day  after 
date,  and  gave  up  to  Morgan  the  three  notes  described  in  the  declara- 
tion to  be  cancelled,  and  they  were  cancelled  accordingly.  Subse- 
quently (but  when  does  not  appear),  Morgan,  at  the  request  of  the 
attorney,  confessed  a  judgment  to  Miller  on  the  substituted  note, 
which  judgment  is  still  unsatisfied.  Morgan  afterwards  died  in- 
solvent. 

The  Circuit  Court  rendered  a  judgment  in  favour  of  the  defendant. 

We  do  not  think  the  judgment  can  be  sustained.  The  granting 
indulgence  by  parol,  whether  upon  a  valid  or  an  invalid  considera- 
tion to  one  of  two  joint  and  several  obligors,  does  not  constitute  a 
defence,  at  law  by  the  other  obligor  against  any  part  of  the  joint  and 
several  debt. 

When  a  demand  is  placed  in  the  hands  of  an  attorney  at  law  for 
collection,  without  any  special  instructions,  the  authority  conferred 
upon,  and  the  duty  assumed  by  him,  is  to  use  due  diligence  to  col- 
lect the  debt  by  suit  or  otherwise.  He  has  no  authority  to  comjiro- 
mise  with  the  debtor,  and  cannot  bind  his  principal  by  any  arrange- 
ment short  of  an  actual  collection  of  the  money.  The  transactions 
of  the  attorney  as  stated  in  the  record,  therefore,  were  nugatory, 
and  had  no  binding  effect  upon  his  principal,  the  plaintiff.  The  notes 
which  were  improperly  surrendered  and  cancelled,  nevertheless  re- 
main in  force.  Nor  does  the  judgment  confessed  on  the  new  note 
alter  the  case.  The  taking  the  judgment  was  equally  unauthorized  as 
the  surrender  of  the  old  notes,  and  cannot  merge  them.  Had  it 
appeared  that  the  plaintiff  ratified  the  acts  of  his  attorney,  the  re- 
sult would  have  been  different ;  but  it  is  not  shown  that  he  even  had 
a  knowledge  of  the  doings  of  the  attorney. 

PivK  Curiam.  The  judgment  is  reversed  with  costs.  Cause  re- 
manded, etc. 


-t;>0  Till-:  AUTiioKiTr  (Tart  2 

c.RAll.\^r  V.  T^xiTi:n  statI'S  saxtxc.s  institution." 

(Supi-cino  I'ourt  of  Missouri,   IMO.      IC   Mo.   ISC.) 

Cuukii:k.  1.  Tlii.<;  suit  is  l)r(Uij;lil  lo  rcoovrr  the  ami)UiU  ol  two 
checks  which  wcro  ch-awu  on  the  (kk'iiclaiit  by  third  parties  in  favor 
of  tlio  phiintiffs  and  nunle  payable  to  llieir  order.  The  (h-awer.s  deliv- 
ered the  checks  to  the  plaintitTs'  coUectin.q:  at;ent,  one  Dixon,  in  set- 
tlement of  certain  bills  which  the  latter  had  in  chart^e  for  collection, 
beinij  bills  due  from  the  drawer  of  the  checks  to  the  plaintiflfs.  Dix- 
on indorsed  the  defendant's  firm  name  upon  the  checks  and  presented 
them  at  the  bank  and  drew  the  money  upon  them,  which  he  seems 
to  have  appropriated  to  his  own  use,  without  rendering  any  account 
thereof  to  the  plaintiffs.  Thus  far  there  appears  to  be  no  serious 
controversy  about  the  facts. 

If  Dixon  had  authority,  general  or  special,  to  indorse  the  checks 
in  the  manner  stated,  or  the  defendant  was  authorized  to  pay  them 
without  the  personal  indorsement  of  the  plaintiffs,  it  is  not  contended 
that  the  defendant  would  be  liable  in  this  action.  The  verdict  of  the 
jury,  however,  negatives  the  supposition  of  the  existence  of  any  such 
express  authority.  The  defendant  nevertheless  undertakes  to  deduce 
the  authority  from  the  nature  and  character  of  Dixon's  general 
agency  in  making  collections  and  the  transaction  of  business  in  be- 
half of  the  plaintiffs.  Their  chief  complaint  of  the  action  of  the 
court  below  is  founded  upon  the  refusal  of  the  court  to  give  the  fol- 
lowing instruction,  namely:  "If  the  jury  believe  from  the  evidence 
that  Charles  Dixon  was,  at  the  times  stated  in  the  petition,  the  clerk 
and  collector  of  the  plaintiffs,  and  that,  as  such,  he  received  from 
the  plaintiffs,  among  other  accounts  for  collection,  two  accounts,  one 
against  Kramer  &  Loth,  and  one  against  Erfort  &  Petring,  and  that 
he  was  fully  authorized  and  empowered  to  receive  payment  of  and 
receipt  said  bills  or  accounts,  and  that,  in  pursuance  of  his  duties  and 
authority,  he  received  in  payment  of  such  accounts  the  checks  set 
out  in  the  petition,  and  afterward  collected  the  money  on  said  checks 
from  defendant,  in  accordance  with  his  authority  to  collect  said 
accounts,  then  they  will  find  for  the  defendant." 

The  logic  of  this  instruction  is  that  Dixon  was  authorized  to  in- 
dorse and  collect  the  checks  since  he  was  authorized  to  receive  them 
in  lieu  of  cash  in  payment  of  the  bills  he  held  for  collection.  The 
deduction  is  a  non  sequitur.  The  checks  required  the  bank  to  pay 
the  sums  therein  specified  to  such  person  as  the  payees  might  direct. 
But  the  payees  never  directed  payment  to  be  made  to  any  one,  un- 
less Dixon  was  their  agent  for  that  purpose ;  and  such  agency  is  not 
inferable  from  the  mere  fact  that  he  was  their  agent  in  effecting  the 
collection,  nor  from  all  the  facts  recited  in  the  instruction.     TTis  pri- 

12  Afford:  Deering  &  Co.  v.  Kelso,  74  Minn.  41,  70  N.  W.  7!)li,  T.',  Am.  St. 
Rep.  324  (1S98). 


Ch.  1)  NATURE    AND    EXTENT  431 

mary  duty  was  to  collect  the  bills,  not  the  checks  given  in  adjustment 
of  the  bills. 

The  question  presented  is  purely  one  of  agency.  Was  Dixon  the 
plaintiffs'  agent  to  indorse  negotiable  paper  given  in  settlement  of 
debts  due  to  his  employers?  He  was  their  agent  to  adjust  such 
claims  and  receive  the  amounts  due  upon  them,  and  to  do  those  sub- 
ordinate and  incidental  things  usual  and  customary  in  the  accom- 
plishment of  the  main  purpose  had  in  view,  to-wit :  the  collection. 
That  main  purpose  had  been  accomplished  when  he  had  received 
the  checks  payable  to  his  principals.  His  duties  as  a  collector  ceased 
at  that  point. ^^  His  next  duty  was  to  account  with  his  employers 
for  the  proceeds  of  his  collections,  and  turn  over  the  checks  to  them, 
to  be  disposed  of  as  they  might  judge  proper.  The  indorsement  of 
the  checks  was  no  necessary  incident  of  the  collection  of  the  ac- 
counts. The  instruction  was,  in  my  opinion,  properly  refused.  So 
was  the  defendant's  second  instruction.  It  traveled  out  of  the  issues 
made  by  the  pleadings.  At  the  instance  of  the  defendant,  the  court 
directed  the  jury  to  find  for  it  in  case  they  found  from  the  evidence 
that  Dixon  was  authorized  to  collect  and  receive  payment  of  checks 
payable  to  plaintiffs  at  the  time  the  checks  in  question  were  pre- 
sented and  paid.  This  fairly  presented  the  real  point  in  controversy, 
and  in  the  form  selected  by  the  defendant's  counsel. 

The  judgment  wilj.  be  affirmed.    The  other  judges  concur. 


(D)  To  Modify 

TOOTLBFT  COOK. 

(Court  of  Appeals  of  Colorado,  1893.    4  Colo.  App.  Ill,  35  Tnc.  193.) 

Action  by  plaintiffs  to  recover  a  balance  due  for  goods  sold  and 
delivered  to  Cook  &  Davis,  a  partnership.  The  partnership  had  been 
dissolved  and  Davis  had  agreed  to  pay  this  bill.  As  it  was  not  paid, 
plaintiffs  drew  on  defendants  at  5  days  sight,  and  sent  the  draft  to 
the  bank  for  collection.     The  bank,  knowing  of  the  dissolution  of 

13  If  tlic  JiKciit's  aulliority  cmixiwors  liiin  to  cnsli  nopotinlilo  paitcr.  lio  still 
liaK  iiri  power  to  traiislVr  it  to  a  third  iktsoii  to  collect.  Ri^ilty  v.  Lowe,  11.'5 
Cal.  (ii:!,  ~,H  I'ac.  ir.:{  (is'.)!)i.  As  to  Ills  rJKlit.  to  receive  and  trniisinit  to  liis 
principal  checks  and  drat'ls,  sec  (Jriliin  v.  i;rskinc,  i:;i  Iowa.  ill.  Id!)  X.  \V. 
i:'..  !)  Ann.  ('as.  ll'.C!  (I'.HMW.  in  wldcli  it  was  pointed  o\it  liy  the  court  that 
checks  ami  other  hills  of  exchange  are  the  means  of  transferrinj:  money  in 
nearly  all  commerciiil  tr-ansactions,  and  in  anlhoriziiif,'  an  a;:enl  to  make  col- 
lections, he  m;iy  he  assumed  to  have  authority  to  transndt  fluids  in  the  (U"dl- 
uary  way.  'rhout;h  sueh  pajier  will  not  ahsolutely  canctd  the  deht,  il  is  con- 
ditional payment,  uood  from  date  of  delivery  if  the  pajier  is  honored,  hut  no 
payment  at  all,  If  not  hr)nored.  If  llu'  a^^'nl  lias  authority  to  take  a  no(e  in 
liaymeiit.  he  has  not  tliereliy  authority  to  collect  that  note  ei«h(  niontlis  later. 
Ilowiird  V.  Rice.  ."»J  (',;\.  '>'J  (l.S7,'>).  Kf»r  many  Illustrations,  see  Sc'irhorou^h  v. 
lU-vnolds.  112  Ala.  L'.VJ  H^lTt. 


432  THE  AUTnoRTTT  (Part  2 

ilio  partnership,  took  tlio  accoptanco  of  Davis  alone,  retained  the 
ilrafts,  and  aHowcd  Davis  to  make  payments  from  time  to  time  until 
he  became  insolvent.  Cook  had  no  knowledge  of  this  draft.  Judg- 
ment for  defentlants. 

Thomson,  J.^*  *  *  *  There  is  no  qneslion  that  the  bank  was 
the  agent  of  plaintiffs,  and  hence  the  argument  that  when  it  took  the 
individual  acceptance  of  Davis  upon  the  draft  against  Cook  &  Davis, 
with  knowledge  that  the  firm  of  Cook  &  Davis  had  ceased  to  exist, 
the  plaintiffs  were  bound  by  its  act,  the  effect  of  which,  as  urged, 
was  to  discharge  Cook.  The  mere  taking  of  the  acceptance  of  Da- 
vis, alone,  would  probably  not  have  the  effect  claimed,  but  it  is  need- 
less to  consider  that  question  here.  A  principal  is  not  bound  by  the 
acts  of  his  agent,  unless  they  are  done  within  the  scope  of  his  au- 
thority, in  the  transaction  of  the  business  of  his  principal.  So,  also, 
in  order  that  a  principal  may  be  affected  by  his  agent's  knowledge, 
the  knowledge  must  be  acquired  while  he  is  agent,  and  must  pertain 
to  the  business  in  which  he  is  authorized  to  act.  The  bank  was  the 
agent  of  plaintiffs  for  the  collection  of  the  draft.  No  authority  is 
shown  in  the  bank,  except  the  general  authority  which  accompanies 
the  forw'arding  to  it  of  an  instrument  for  collection.  Under  that  au- 
thority it  could  collect  the  money  due,  and  if  it  had  done  so  the 
debt  would  have  been  discharged,  notwithstanding  the  bank  might 
have  failed  to  forward  the  amount  to  the  plaintiffs.  But  it  had  no 
power  to  compound  the  indebtedness,  or  release  a  debtor,  or  receive 
anything  except  money  in  payment,  or  do  anything  whatever  which 
would  operate  to  change  the  rights  of  the  creditors  or  the  liabilities 
of  the  debtors. ^°  Under  this  general  authority,  it  could  present  the 
draft  for  acceptance,  in  accordance  with  its  terms,  but  it  could  not 
bind  the  drawers  by  receiving  a  defective  acceptance.  The  knowl- 
edge, therefore,  which  the  bank  had  of  the  dissolution,  or  its  act 
in  taking  the  acceptance  of  one  drawer,  and  not  of  the  other,  or  any 
other  act  outside  of  the  general  authority  which  it  had,  cannot  for  a 
moment  affect  the  prior  relations  between  the  defendant  partner- 
ship and  the  plaintiffs.     *     *     * 

Reversed. 

1*  Part  of  the  opinion  Is  omitted. 

13  Au  attorney  to  collect  and  receive  payment  has  no  power  to  compromise 
or  sell  the  claim,  Geiser  v.  Bolles,  1  Thomp.  &  C.  129  (187.*}) ;  nor  to  commute 
the  debt,  nor  to  pledge  it,  Padfield  v.  Green,  85  111.  .529  (1S77) ;  nor  to  ex- 
tend the  time  of  payment,  Powell  v.  Henry,  9G  Ala.  412,  11  South.  .Sll  (1892); 
nor  to  do  anything  short  of  an  actual  collection  of  the  money,  Corbet  v.  Wal- 
ler, 27  Wash.  242,  G7  Pac.  .567  (1902).  While  he  may  use  the  ordinary  and 
necessary  means  of  collecting,  as  to  retain  coun.sel  and  bring  suit,  Kyan  v. 
Tudoj-.  ;jl  Kan.  30G,  2  Pac.  797  (1884),  and  make  his  principal  lialile  for  the 
method  used,  if  authorized,  Caswell  v.  Cross,  120  Mass.  545  (1870),  yet  he  can- 
not settle  in  any  other  way  than  the  one  authorized,  Powell's  Adm'r  v.  Henry, 
27  Ala.  012  (1855).  To  compound  the  debt  for  less  than  is  due  is  an  evidence 
of  fraud,  and  the  debtor  may  then  have  to  pay  again.  Penu  v.  Browne,  2 
Freem.  C.  C.  214  (KJ97). 


Ch.  1)  NATURE    AND    EXTENT  433 

V.  To  Give  OR  Receive  Negotiable  Paper 


U 


(A)  In  General. 

EXCHANGE   BANK  v.   THROWER. 
(Supreme  Court  of  Georgia,  1903.     118  Ga.  433,  45  S.  E.  316.) 

Lamar,  J.  Authority  to  borrow  money  is  among  the  most  dan- 
gerous powers  which  a  principal  can  confer  upon  an  agent.  Who- 
ever lends  to  one  claiming  the  right  to  make  or  indorse  negotiable 
paper  in  the  name  of  another  does  so  in  the  face  of  all  the  danger 
signals  of  business.  He  need  not  lend  or  discount  until  assured  be- 
yond doubt  that  the  principal  has  in  fact  appointed  an  agent  who 
by  the  stroke  of  a  pen  may  wipe  out  his  present  fortune,  and  bind 
his  future  earnings.  The  very  nature  of  the  act  is  a  warning,  and 
if  the  lender  parts  with  his  money,  he  does  so  at  his  own  peril.  If 
the  power  was  not  in  fact  conferred,  he  must  bear  the  loss  occasioned 
by  his  own  folly.  A  power  so  perilous  is  not  to  be  implied  from  acts 
which  in  other  matters  less  hazardous  might  create  an  agency.  It 
must  be  conferred  in  express  terms,  or  be  necessarily  and  inevitably 
inferable  from  the  very  nature  of  the  agency  actually  created.  So 
strict  is  the  rule  that  it  will  not  be  presumed  even  from  an  appoint- 
ment of  one  as  general  agent,  unless  the  character  of  the  business 
or  the  duties  of  the  agent  are  of  such  a  nature  that  he  was  bound 
to  borrow  in  order  to  carry  out  his  instructions  and  the  duties  of  the 
office.  Civ.  Code,  §§  3004,  3021 ;  Dobbins  v.  Etowah  Mfg.  Co.,  75 
Ga.  238 ;  Mechem  on  Agency,  §  536 ;  Tappan  v.  Bailey,  4  Mete.  536 ; 
Jackson  Co.  v.  Com.  Nat.  Bk.,  199  111.  151,  65  N.  E.  136,  59  L.  R. 
A.  657,  93  Am.  St.  Rep.  113;  Doubleday  v.  Kress,  50  N.  Y.  410,  10 
Am.  Rep.  502. 

While  the  agent  here  was  given  the  rather  high  title  of  "cashier," 
that,  of  itself,  did  not  clothe  him  with  the  powers  which  might  have 
been  exercised  by  an  officer  bearing  that  title  if  employed  by  a  bank. 
In  view  of  the  reluctance  with  which  the  law  presumes  the  existence 
of  the  power  to  borrow,  this  title  will  be  considered  to  indicate  that 
he  was  cash  keeper,  rather  than  a  cash  borrower.  Nor  will  the 
fact  that  he  was  authorized  to  fill  out  the  blank,  and  indorse  drafts 
with  a  rubber  stamp  reading,  "Pay  to  the  order  of  the  Third  National 

Bank  for  deposit.     James  T.  Prince,  Manager,  by  ,  Cashier," 

be  treated  as  authority  to  indorse  in  blank.  On  the  contrary,  the 
character  of  the  stamp  itself  indicated  that  the  principal  only  au- 
thorized a  restricted  indorseinent  for  the  mere  purpose  of  allowing 
the  bank,  rather  than  the  agent,  to  collect.  It  does  not  import  a 
general  authority  to  indorse,  nor  docs  possession  of  the  draft  indi- 
(JnnD.I'ltAt  A.— 2H 


434  THK  AUTHORITY  (Part  '2 

catc  that  the  agent  had  tlie  riL;ht  to  thscouiit  the  draft  or  eolleet  the 
proceeds.^" 

The  strinp^etit  rules  of  ap,cney  are  intended  to  protect  a  principal 
ao'ainst  unantliorized  acts,  hut  not  to  shieUl  one  who  has  in  fact  con- 
ferred such  authority,  or  ratified  his  conduct.  Here  tlie  plaintilT  de- 
nied that  any  authority  liad  heen  t^iven  further  than  that  inipHed  in 
conferrins;-  tlie  title  '■cashier,"  and  the  rii;ht  \o  use  the  stamp  alxwe 
copied.  It  denied  that  I'rince  h:u\  knowledge  of  the  conduct  on  the 
part  of  l>rinsfieUl.  or  that  he  in  any  manner  ratified  the  indorsements 
or  collections  which  were  shown  to  have  been  made  by  him.  The 
testimony  for  the  defendant  was  to  the  contrary,  and  was  to  the 
effect  that  the  trouble  was  not  so  much  a  want  of  authority  to  in- 
dorse, as  the  improper  use  Brinsfield  made  of  the  money  after  it 
was  collected ;  that  he  was  a  general  agent,  indorsing  drafts,  han- 
dling the  cash,  paying  out  money,  occasionally  drawing  checks,  and 
in  full  and  complete  charge  of  the  business  during  the  frequent  and 
necessary  absences  of  the  principal ;  that  he  had  discounted  another 
draft  with  Thrower  some  months  before,  for  $394,  which  was  paid 
without  objection ;  that  on  these  and  other  like  drafts,  indorsed  in 
the  same  way,  of  which  Prince  denied  knowledge,  Brinsfield  had  col- 
lected some  $8,500,  wdiich  he  had  appropriated  to  his  own  use ;  that 
he  originally  wrote  the  indorsements  in  his  own  handwriting  before 
the  stamp  above  referred  to  was  prepared ;  and  that  there  were  other 
stamps  in  the  ofilice  used  by  him,  on  which  the  words  "for  deposit" 
were  wanting,  apparently  contemplating  that  he  had  authority  to 
indorse  in  blank  and  to  collect. 

The  evidence,  while  conflicting,  was  sufficient  to  sustain  the  ver- 
dict for  the  defendant.  We  have  no  power  to  interfere  where  the 
judge  of  the  lower  court  has  re-examined  the  evidence  on  the  motion 
for  a  new  trial,  and  by  his  refusal  to  set  it  aside  expressed  himself 
as  fully  satisfied  with  the  verdict.     Judgment  affirmed. 

i«  Accord:  Paiso  v.  Stone,  10  Mete.  (Mass.)  KiO.  4:)  Am.  Doc.  420  (1S45),  in 
which  it  is  said  that  to  facilitate  note  niakinji,  and  tlius  al't'ect  the  interest 
and  estates  of  tlurd  jjersous  to  an  indetinite  amount,  is  not  within  the  ob- 
ject and  intent  of  the  law  in  ref-'ulatin^'  the  oonnnon  duties  of  the  agent.  Sin- 
clair &  Co.  V.  Goodell,  0.3  111.  App.  502  (1000),  ([uoting  with  approval  Tiede- 
man  on  Commercial  Paper,  to  the  effect  that  the  execnrion  and  negotialion 
of  commercial  pajier  by  agents  are  so  liable  to  the  infliction  of  injury  on  the 
Iirinciiials  ibat  the  presumption  of  the  law  is  more  strongly  oi)posed  to  an 
implied  authority  to  execute  connnercial  paper  than  to  do  anylluiig  else.  I^vi- 
dence  that  the  agent  had  indorsed  in  the  principal's  name  thirty-three  checks 
is  no  proof  of  lu.s  authority  iniless  the  principal  knows  of  it.  Sewanee  Min- 
ing Co.  V.  McCall.  ;j  Head,  010  (IsnO),  denying  the  authority  of  an  agent  to 
accept  a  bill,  even  in  an  extraordinary  emergency  not  amounting  to  an  over- 
ruling necessity.  The  general  manager  of  a  business  has  no  implied  power  to 
make  or  indorse  negotiable  paper.  (  onneil  v.  Mcl.,nughlin.  2.S  Or.  2;>.  42  Pac. 
21S  (1805).  If  he  has  the  power  he  may  not  exercise  it  for  his  own  benefit, 
X.  Y.  Iron  Mine  v.  Negaunee  P.ank,  30  Mich.  G44  (1878);  P.ank  v.  Ohio  Valley 
Furniture  Co.,  57  W.  Va.  025.  50  S.  K.  880.  70  L.  K.  A.  312  (10051 ;  P.ank  of 
Morganton  v.  Hay.  143  N.  C.  320.  55  S.  K.  811  (1000);  nor  for  the  acccjni- 
modation  of  a  third  person,  Gulick  v.  Grover,  33  N.  J.  Law,  4G3,  97  Am.  Dec. 
728  (1S07>;    P.oord  v.  Strauss,  :',<)  Fla.  381,  22  South.  713  (1897). 


Ch.  1)  NATURE    AND    EXTENT  435 

(B)  Linutatlons 
BANK  OF  DEER  LODGE  v.  HOPE  MINING  CO. 

(Supreme  Court  of  Montaiui  Territory,  1S7S.     3  Mout.  146,  35  Am.  r.op.  458.) 

Blake,  J-     The  appellant  brings  this  action  to  recover  upon  the 
following  bill  of  exchange : 
"$1,000.00  Deer  Lodge,  .M.  T.,  May  18th,  1874. 

"At  sight,  pay  to  the  order  of  the  First  National  Bank,  Deer  Lodge, 
one  thousand  dollars.  Value  received,  and  charge  the  same  to  ac- 
count of  Hope  Mining  Co., 

by  Jos.  ^1.  Alger. 
"To  Chas.  C.  AMiittlcsey,  Prest. 
"Hope  Mining  Co.,         f — ' — "i 
"St.  Louis,  Mo."      V^r 

Indorsement:  "Pay  the  Security  Rank,  or  order,  for  collection,  ac- 
count of  First  National  Hank.  Deer  Lodge,  Montana. 

"W.  A.  Clark,  President." 

The  appellant  has  been  incorporated  under  the  laws  of  the  United 
States  and  is  engaged  in  a  general  banking  business.  It  discoiuited 
the  bill  upon  its  date  and  paid  the  proceeds  to  Alger.  The  respondent 
has  been  incorporated  under  the  laws  of  the  state  of  Missouri  and 
is  mining  some  quartz  lodes  at  Philipsburg  and  has  an  office  in  St. 
Louis,  Missouri.  The  appellant  demanded  payment  of  the  bill  at  the 
office  in  St.  Louis,  May  27,  1874,  and  the  respondent  refused  to  ac- 
cept or  pay  the  same.  Notice  of  its  presentment  and  non-payment 
was  properly  given. 

The  respondent  denied  that  Alger  was  its  agent  and  claimed  that 
he  had  no  authority  to  draw  the  bill.  The  court  below  rendered  judg- 
ment for  the  respondent  upon  these  grounds,  and  also  found  that  it 
was  the  custom  of  the  resjjondent  in  drawing  drafts  upon  itself  to  di- 
rect them  to  Chas.  C.  Whittlesey,  president  of  the  Hope  Mining  Com- 
pany. The  only  authority  of  Alger  to  draw  the  bill  is  contained  in 
the  following  telegram,  which  was  transmitted  by  tiie  Western  Union 
Telegrai)h  Company : 

"Dated  St.  L(juis,  Feb.  23d,  1874. 

"Received  at  . 

"To  Joseph  Alger,   Philipsburg: 

"Care  for  company's  property.  See  that  McAnllc  has  what  he 
needs.     If  funds   needed,  draw  on   company. 

'"Chas.  C.  Whittlesey." 

This  telegram  was  received  by  Alger  about  h'ebruary  25,  1874.  after 
the  death  of  McArdle.  One  bill  of  exchange  for  $5(J0  was  drawn  bv 
Alger,  March  26,  1874,  which  was  discounted  by  the  api)elIaiU,  ami 
afterward  accepted  and  ]iai<l  by  the  respondent.     The  proceeds  were 


436  TiiK  AUTiTOKiTY'  (Part  2 

cxpcndeil  for  the  ticncfit  of  the  respondent.  This  hill  was  signed  in 
the  same  manner  as  that  involved  in  this  aetion,  and  all  parties  were 
the  same.  No  other  hills  were  drawn  on  the  respondent  hy  Alger, 
hut  during  the  months  of  February,  March  and  April,  1874,  Alger 
checked  against  some  funds  of  the  respondent  in  Deer  Lodge  and 
Helena.  Alger  was  not  in  the  employ  of  the  respondent  when  the 
second  bill  was  drawn,  and  the  proceeds  were  used  in  defraying  the 
expenses  of  Mrs.  McArdle  and  her  family  from  Philipsburg  to  St. 
Louis.  The  officers  of  the  appellant  did  not  make  any  inquiries  re- 
specting the  authority  of  Alger  to  sign  these  bills,  or  the  purposes 
for  which  they  were  drawn,  and  never  saw  the  telegram. 

We  must  consider  the  relations  of  Alger  and  the  respondent  which 
affect  the  rights  of  the  appellant.  It  is  evident  that  the  telegram  au- 
thorized Alger  to  draw  upon  the  respondent  for  money  for  certain 
objects.  Did  it  constitute  Alger  the  agent  of  the  respondent,  and 
empower  him  to  sign  the  bill  in  that  capacity?  Did  the  officers  of 
the  respondent  authorize  those  of  the  appellant,  with  whom^  Alger 
dealt,  to  believe  as  fair  and  reasonable  men  that  this  authority  had 
been  actually  given  to  Alger?  An  examination  of  the  law  of  agency 
will  enable  us  to  determine  these  questions,  and  if  we  find  that  either 
of  them  should  be  answered  in  the  affirmative,  we  must  decide  that 
the  respondent  was  bound  by  the  acts  of  Alger.  1  Pars,  on  Notes  and 
Bills,  100,  101,  and  cases  there  cited. 

Some  of  the  principles,  which  are  applicable  to  these  questions, 
have  been  announced  by  this  court  in  the  case  of  Herbert  v.  King, 
1  Mont.  475.  It  was  held  that  the  principal  is  responsible  for  the 
acts  of  his  agent,  when  they  have  been  done  within  the  scope  of  his 
authority,  and  that  "courts  will  not  tolerate  any  enlargement  of  this 
liability."  The  bill  shows  that  Alger  claimed  to  be  the  agent  of  the 
respondent,  and  it  was  the  duty  of  the  officers  of  the  appellant  to 
ascertain  the  extent  of  his  power  before  they  discounted  it.  In  Me- 
chanics' Bank  V.  N.  Y.  &  N.  H.  R.  R.  Co.,  13  N.  Y.  631,  Mr.  Justice 
Comstock  says:  "Whoever  proposes  to  deal  with  a  security  of  any 
kind,  appearing  on  its  face  to  be  given  by  one  man  for  another,  is 
bound  to  inquire  whether  it  has  been  given  by  due  authority,  and 
if  he  omits  that  inquiry,  he  deals  at  his  peril."  Blum  v.  Robertson, 
24  Cal.  140,  and  cases  there  cited.  In  this  action,  the  burden  of  prov- 
ing that  Alger  was  the  agent  of  the  respondent  in  drawing  the  bill 
is  on  the  appellant.  Add.  on  Cont.  §  57.  The  power  of  an  agent  to 
make  the  principal  a  party  to  negotiable  paper  is  always  restricted 
by  the  courts.  "So  carefully  is  this  authority  watched,  that,  where 
power  is  given  to  do  some  things  with  regard  to  promissory  notes  or 
bills,  it  cannot  be  enlarged  by  construction  to  do  other,  though  some- 
what similar,  things."    1  Pars,  on  Notes  and  l^ills,  107. 

This  doctrine  may  be  illustrated  by  the  following  authorities.  An 
agent  who  is  authorized  to  draw  and  indorse  bills  of  exchange  in  the 
name  of  his  principal  has  no  power  to  draw  or  indorse  the  bills  in 


Ch.  1)  NATURE    AXD    EXTENT  437 

his  own  name,  or  in  the  joint  name  of  himself  and  his  principal.  Stain- 
back  V.  Read,  11  Grat.  281,  62  Am.  Dec.  648.  The  agent  of  a  cor- 
poration who  was  authorized  to  borrow  money  from  a  bank  and  ex- 
ecute the  note  of  the  corporation  therefor,  could  not  bind  his  prin- 
cipal by  borrowing  the  money  and  executing  a  bond  for  the  same 
under  the  seal  of  the  corporation.  Little  Rock  v.  State  Bank,  8  Ark. 
227;  Story  on  Agency  (7th  Ed.)  §  165.  An  authority  to  draw  is  not 
an  authority  to  indorse  or  accept  bills.  1  Pars,  on  Notes  and  Bills, 
107,  and  cases  there  cited.  In  Tate  v.  Evans,  7  Mo.  419,  the  agent 
was  authorized  November  28,  1839,  to  draw  a  bill  of  exchange  "at 
four  months'  date,"  and  the  bill  was  actually  drawn  December  23, 
1839,  and  antedated  November  28,  1839,  and  payable  "four  months 
after  date."  The  court  held  that  the  bill  was  not  in  conformity  to 
the  authority  conferred  on  the  drawer  and  that  the  principal  was  not 
bound. 

The  authority  of  Alger  to  draw  checks  on  the  money  of  the  re- 
spondent in  this  Territory  is  wholly  distinct  from  that  of  drawing 
a  bill  of  exchange  on  the  respondent  in  Missouri.  The  power  to 
exercise  one  of  these  acts  does  not  include  the  other,  and  the  fact 
that  Alger  checked  against  the  funds  of  the  respondent  during  the 
time  which  has  been  mentioned  does  not  tend  to  prove  that  he  had 
the  authority  to  draw^  the  bill  in  controversy. 

The  appellant  maintains  that  the  facts  which  have  been  referred 
to  would  authorize  the  officers  of  the  appellant,  as  fair  and  reason- 
able men,  in  believing  that  Alger  had  the  right  to  draw  the  bill.  In 
other  words,  the  argument  is  that  the  respondent  is  estopped  from 
disputing  that  Alger  had  the  authority  he  exercised  respecting  the 
bill.  The  officers  of  the  appellant  made  no  effort  to  ascertain  the 
power  of  Alger,  and  appear  to  have  assumed  that  the  payment  of 
the  first  bill  by  the  respondent  was  a  sufficient  recognition  of  the  au- 
thority of  Alger,  in  drawing  the  second  bill.  If  Alger  had  repeatedly 
performed  acts  like  the  one  in  dispute,  which  had  been  ratified  by 
the  respondent,  the  officers  of  the  appellant  could  presume  that  he 
was  authorized  to  draw  the  bill.  But  this  conclusion  could  not  be 
inferred  from  one  instance  of  such  recognition.  The  legal  effect  of 
the  ratification  of  an  unauthorized  act  is  equi'valent  to  the  previous 
delegation  of  authority  to  do  the  act.  This  ratification,  however,  docs 
not  operate  as  presumptive  evidence  of  original  authority,  but  as  a 
confirmation  per  se  of  the  unauthorized  act.  Commercial  Bank  v. 
Warren,  15  N.  Y.  577.  In  Cook  v.  Baldwin,  120  Mass.  317,  21  Am. 
Rep.  517,  the  court  held  that  the  part  payment  by  the  drawee  of  a  bill 
of  exchange  is  not  such  a  recognition  of  his  obligation  as  will,  as  mat- 
ter of  law,  bind  him  to  pay  the  remainder. 

We  arc  now  brought  to  the  consideration  of  the  telegram  from 
Whittlesey  to  Alger,  and  the  rights  of  the  parties  to  the  action  must 
depend  upon  its  interpretation.  \\  hat  is  the  character  of  the  instru- 
ment which  Alger  signed?     It  is  a  bill  drawn  bv  tin-  agent  of  a  cor- 


t.'vS  TITK    AUTHOKITY  (l\'irt2 

poratioii  upon  itself  ami  may  he  Ircatod  as  an  aoocptoil  bill  or  a  prom- 
issory note,  at  the  elect  ion  of  the  lu)Uler.  1  Tars,  on  Notes  and  Bills, 
62,  2SS.  and  eases  there  cited;  2  Creeid.  l^v.  §  160,  and  cases  there 
cited.  Ali;er  luul  no  authority  to  make  such  a  hill  or  note;  he  was 
a  special  agent,  and  his  junver  was  accurately  limited.  The  telegram 
did  not  describe  or  recognize  Alger  as  an  agent  of  the  respondent, 
but  authorized  him  to  draw  in  his  own  name  on  the  respondent,  if 
money  was  needed  for  a  particular  purpose.  It  is  not  necessary  for 
us  to  pursue  this  inquiry  into  the  effect  of  the  acts  of  Alger  on  the 
rights  of  all  the  parties  to  the  bill.  Alger  violated  his  instructions 
ami  the  respondent  is  not  bound  by  his  action  in  drawing  the  bill. 

The  purchaser  of  the  bill  should  have  exercised  prudence  and  ex- 
amined the  telegram  to  see  whether  it  justified  the  act  of  Alger.  "And 
if.  from  his  omission  to  call  for  or  to  examine  the  instrument,  he 
should  encounter  a  loss  from  the  defective  authority  of  the  agent,  it 
is  properly  attributable  to  his  own  fault,  since  he  must  know  that 
he  has  no  other  security  than  his  reliance  upon  the  good  faith  and 
credit  of  the  agent.''  Story  on  Agency  (7th  Ed.)  §  72,  and  cases  there 
cited. ^'      The  judgment  is  aifirmed. 

Judgment  affirmed. 


GOULD  V.   BOWEN. 

(Supreme  Court  of  Iowa,  18(iS.    2G  Town.  77.) 

Detinue  for  a  promissory  note,  claimed  by  defendant  under  an  in- 
dorsement by  one  Bowen  as  attorney  in  fact  for  plaintiff. 

Cole,  J.  The  material  parts  of  the  power  of  attorney  under  which 
the  defendants  claim  the  authority  was  given  to  transfer  the  note  in 
controversy,  are  as  follows :  "For  me  and  in  my  place  and  stead,  to 
sell,  convey  and  dispose  of  any  and  all  property  both  personal  and 
real,  which  I  have  or  may  have  in  Delaware  county,  Iowa,  and  give 
in  my  name  any  bill  of  sale  that  may  be  necessary,  of  personal  prop- 
erty, and  in  my  name  to  give  a  warranty  deed  or  otherwise  for  any 
of  my  real  estate  sold,  and  to  collect  in  my  name  any  money  now 
or  hereafter  to  become  due  to  me,  and  to  do  all  other  matters  in  rela- 
tion to  any  of  my  property  or  debts  which  I  could  do,  if  present. 
Giving  and  granting  unto  my  said  attorney  full  power  and  authority 
to  do  and  perform  all  and  every  act  and  thing  whatsoever,  required 
and  necessary  to  be  done  in  and  about  the  premises,  as  fully  as  I  might 
or  could  do  if  personally  present." 

We  hold  that  this  language  gave  the  attorney  in  fact  therein  named, 
the  authority  to  transfer  the  title  and  possession  of  the  note  in  con- 

i7Tlie  limits  of  the  power  of  the  agent  are  discussed  with  discrimination 
in  the  leading  case  of  St.iinl)ack  v.  Read,  11  Grat.  2S1,  (52  Am.  Dec.  048  (ISGl), 
and  in  the  recent  case  of  liank  of  Morganton  v.  Hay,  14.3  N.  C.  .'il'fj,  55  S,  E. 
811  (UiOO). 


Ch.  1)  NATURE    AND   EXTENT  439 

troversy  to  the  defendant  claiming  the  same.  We  need  not  decide 
whether  the  indorsement  thereof  would  subject  the  principal  to  all 
the  ordinary  liabilities  of  an  indorser,  as  that  question  is  not  neces- 
sarily involved  in  this  case.  This  holding  is  not  in  conflict  with  the 
doctrine  stated  in  1  Pars,  on  Notes  and  Bills,  106,  recognized  by  this 
court  in  the  case  of  Whiting  v.  Western  Stage  Co.,  20  Iowa,  554,  that 
a  general  authority  to  transact  business,  even  if  it  be  expressed  in 
words  of  very  wide  meaning,  will  not  be  held  to  include  the  power 
of  making  the  principal  a  party  to  negotiable  paper.  For,  in  this  case, 
the  attorney  in  fact  was  not  only  empowered  to  dispose  of  all  per- 
sonal property  and  to  make  bills  of  sale  thereof,  but  also  to  do  all 
other  matters  in  relation  to  the  debts  of  the  principal  Avhich  she  could 
do  if  present.  In  other  words  we  hold,  that  by  a  fair  construction 
of  the  power  of  attorney  offered  in  evidence,  the  agent  was  clothed 
with  the  power  to  make  the  transfer  claimed. ^^ 

There  was  no  error,  therefore,  in  admitting  the  evidence  as  offered, 
and  the  judgment  of  the  district  court  is  affirmed. 

i«  Sometimes  the  power  must  be  regarded  a  mere  idle  declaration  unless 
the  authority  was  meaut  to  be  conferred.  Edwards  v.  Thomas.  GO  Mo.  -408 
(1877).  Often  the  circumstances  are  such  as  to  justify  the  inference  that  the 
principal  intended  his  general  a^'ent,  managing  his  business,  to  give  notes  for 
money  borrowed  or  goods  purchased  to  carry  on  the  business.  Lytle  v.  Bank 
of  Dothan.  1121  Ala.  215,  2G  South.  G  (18;)S).  The  power  is  presumed  to  be 
commensurate  with  the  necessity  of  the  situation.  Whitteu  v.  Bank  of  Fin- 
castle,  100  Va.  y4G,  42  S.  E.  300  (1902). 

Other  Ili-vstuatioxs. — The  principles  enunciated  in  the  foregoing  cases  as 
to  agents  authorized  to  buy  and  sell,  to  collect  and  to  make  commercial  paper 
might  be  illustrated  in  many  other  lines  of  employment.  Authority  to  an 
agent  to  act  in  a  particular  business,  or  in  particular  matters  in  a  business, 
is  constantly  implied  or  denied  according  to  the  usages  and  customs  of  the 
business,  the  course  of  dealing  of  the  particular  principal,  and  the  reasonable 
necessities  of  the  employment.  But  the  inference  must  always  be  based  upon 
facts,  for  whicli  the  principal  is  responsible,  and  not  upon  mere  supposed 
convenience  or  pnipriely.  Moreover,  implied  authority  is  limited  to  acts  for 
the  interests  of  the  principal,  and  of  a  kind  iierlaining  to  the  business  upon 
which  the  agent  is  employed,  and  which  are  reasonal)ly  necessary  to  accom- 
plish that  business.     These  principles  have  been  applied  to  agents  employed: 

7o  moiKK/r  the  iifinviiuir.f  hii-snuiis:  (Jregory  v.  Loose,  11)  Wash.  599,  54 
I'ac.  33  (1W)S),  supra,  p.  54;  Baldwin  v.  Garrett.  Ill  Ga.  S7G,  3G  S.  E.  9GG 
(1900);  Clatlln  v.  Continental  .Tersey  Wks.,  S5  Ga.  27,  11  S.  E.  721  (1S90), 
supra,  p.  337;  Dearing  v.  Eigbtfoot.  IC  Ala.  2.S  (lS49i;  Gulick  v.  Grover.  33 
N.  J.  Law.  4G3.  97  Am.  I>ec.  72S  (1SG8);  Duncan  v.  Ilartman,  143  Pa.  595, 
22  Atl.  1099,  24  Am.  St.  Uep.  570  (1^91);  Vescelius  v.  Martin,  11  Colo.  .".91, 
18  I'ac".  ."..".s  (isss). 

To  lidxr  i,r  nnt  liix  princijxil'H  proiKilii:  Duncan  v.  H.-irtman,  11.3  I'a.  .)9.j, 
22  Atl.  1<>!>9,  24  Am.  St.  lU'\t.  57<>  (1S91):  Babln  v.  Ensley.  14  App.  Div.  54S, 
43  N.  Y.  Snjip.  S19  (lMt7);  Ilshbaugh  v.  Sianiiiugb".  US  Iowa.  .3:'.7.  92  N.  W.  58 
(1902);    I'eddicord  v.  Berk.  74  Kan.  2:!(!,  SG  I'ac.  4G5  (1990). 

To  pntsrcuti  itud  Htltic  rlaimx  for  liin  iniiiciiinl:  Scarlioniugli  v.  Keyiiolds. 
12  Ala.  252  (1S47);  Scales  v.  .Mount.  9;{  Ala.  S'J.  9  South.  5i:;  (1S9(I):  Hid  v. 
Shoe  Co..  15(»  Mo.  4S:',.  51  S.  W.  7I>2;  Geiger  v.  Bolle.s,  1  Thomp.  &  C.  129 
(1873.);  Bollock  v.  CoJn-n,  .32  Ohio  St.  514  (ls77);  City  of  N.  Y.  v.  Du  B.ois 
^C.  C.)  S(J  Fed.  SS9  (1S97). 

To  l(tul  or  liorrotr  iuon(]i:  Exchange  I'.Jink  v.  TInowcr,  US  (i.-i.  4.33,  4.> 
S.  E.  31G  (19(13).  iinte.  p.  4.33;  I'.icUlord  v.  Menler.  K^T  N.  Y.  490.  14  N.  E. 
4.3^;  flSS7):  Bidi-r  v.  Kirk.  S2  Mo.  Ai»i).  120  (is;):i);  X.  Y.  Iron  .Mine  v.  Ne- 
gaunee  First    Nat.   I'.ank.  .•:9    Mi-h.  cn  (1S7S);    .Ia(ol,s  v.   Morris  (I9(tl)  1  Cli. 


1 


■440  THE  AUTiioKii'Y  (Part  2 


A  A 


CHAPTER  II 
CONSTRUCTION  OF  THE  AUTHORITY 


BRANTLEY  v.  SOUTHERN  LIFE  INS.  CO. 

(Supreme  Court  of  Alabama,   1875.     53  Ala.  554.) 

Action  on  a  note  for  $1,000,  signed  by  West,  Brown  &  Brantley. 
It  appeared  that  Brantley,  a  farmer,  had  signed  a  surety  bond  for 
West  &  Burns,  as  agents  of  the  Insurance  Company.  He  had  made 
one  Berry  his  agent,  and  while  he  was  absent  from  the  state,  Berry 
had  signed  his  name  to  this  note  to  settle  a  breach  of  the  bond  by  the 
agents,  and  the  surety  bond  had  been  cancelled. 

Brickell,  C.  j.i     *     *     *     All  contracts  must  be  read  in  the  light 

fi      of   surrounding   circumstances.      The   occasion   which    gave   rise   to 

them,  the  relative  position  of  the  parties,  and  their  obvious  design 

\as  to  the  objects  to  be  accomplished,  must  be  looked  at,  in  order  to 
arrive  at  their  true  meaning,  and  to  enable  the  court  to  carry  out 
the  intention  of  the  parties.  Pollard  v.  Maddox,  28  Ala.  325.  The 
letter  of  attorney,  introduced  as  evidence  of  Berry's  authority  to 
make  the  note  on  which  the  suit  is  founded,  in  the  name  of  appellant, 
is  very  broad  and  general  in  its  terms.  Standing  without  explana- 
tion of  the  nature  and  character  of  the  usual  and  general  business 
of  appellant,  and  of  the  circumstances  under  which  the  letter  was 
executed,  it  would  be  impossible  to  limit  the  authority  of  the  agent, 
or  to  give  it  any  definite  appHcation.  There  is  scarcely  a  conceivable 
transaction,  lying  within  the  scope  of  lawful  delegation  of  authority, 
into  which  the  agent  could  not  enter,  and  bind  the  principal.  The 
operative  words  of  the  grant  of  authority  are,  "to  sign  my  name  in 
the  general  transaction  of  my  business,  giving  and  granting  unto  my 
said  attorney  full  power  and  authority  to  do  and  perform  all  and 
every  act  or  thing  whatever,  requisite  and  ♦necessary  to  be  done 
in  the  general  transaction  of  my  business,"  etc.     Powers  of  attorney 

61,  70  L.  J.  Ch.  183,  84  L.  T.  Rep.  (N.  S.)  112,  49  Wkly.  Rep.  305  (affirmed  In 
[1001.' I  1  Ch.  810,  71  L.  J.  Ch.  303,  80  L.  T.  Rep.  (N.  S.)  275,  18  T.  L.  R.  384, 
.50  Wklv.  Rep.  371);  Klinrlt  v.  Hipfrins.  05  Iowa,  529,  64  N.  W.  414  (1895); 
Wilson  V.  Campbell.  110  Mich.  580,  68  N.  W.  278,  .35  L.  R.  A.  544  (1896). 

To  make  contracts  of  employment:  Campbell  v.  Day,  90  111.  303  (1878)  (au- 
thority of  architect  to  employ  workmen) ;  Rush  v.  So.  Brewing  Co..  09  Miss. 
2(H).  13  South.  8.50  (1S91)  (employ  attorney);  Sevier  v.  Birmingbaiu,  etc., 
Co..  92  Ala.  2.58,  9  South.  405  (1S90).  and  Holmes  v.  McAllister,  123  Mich.  493, 
82  N.  W.  220,  48  L.  R.  A.  390  (1900)  (employ  medical  aid).  As  to  the  authority 
of  the  agent  to  employ  other  agents,  see  post,  p.  483  ff. 

1  Part  of  the  opinion  is  omitted. 


Ch.  2)  CONSTRUCTION  OF  THE  AUTHORITY  441 

are,  ordinarily,  subjected  to  a  strict  construction;  or,  rather,  the  au- 
thority given  is  not  extended  beyond  the  meaning  of  the  terms  in 
which  it  is  expressed.  A  distinction  is  carefully  observed,  between 
such  powers,  and  other  powers  created  by  deed  or  will,  for  the  ac- 
"complishmcnt  of  particular  purposes.  The  purpose  to  be  accom- 
"pliihed  is  more  regarded  in  the  latter,  than  in  the  former  class  of 
powers,  and  a  more  liberal  interpretation  of  the  words  creating  the 
powers  is  allowed.  Story  on  Agency,  §  67  (n.  2).  In  a  power  of 
attorney,  words,  however  general,  must  be  construed  and  limited  in 
subordination  to  the  subject  matter.  Thus,  a  general  power  to  draw 
or  indorse  promissory  notes  will  not  authorize  the  drawing  or  in- 
dorsing of  promissory  notes  for  the  mere  accommodation  of  third 
persons.  The  authority  must  be  confined  and  limited  to  the  drawing 
and  indorsing  of  promissory  notes,  in  matters  of  business  in  which 
the  principal  has  a  direct  and  immediate  interest.  Wallace  v.  Branch 
Bank  at  Mobile,  1  Ala.  571.  A  physician,  being  about  to  remove 
from  the  State,  left  his  books  and  accounts  for  professional  services 
with  a  friend  for  settlement,  giving  him  general  authority  to  transact 
all  his  business  in  this  State.  The  agent  had  not  authority  to  assign 
the  accounts,  for  the  indemnity  of  a  surety  of  the  principal.  Wood  v. 
McCain,  7  Ala.  800,  42  Am.  Dec.  612.  In  Scarborough  v.  Reynolds,- 
12  Ala.  252,  a  general  authority  to  transact  business  was  limited  to 
the  management  and  control  of  a  plantation,  and  declared  not  to  au- 
thorize the  adjustment  of  other  concerns  of  the  principal. 

The  circuit  court  properly  received  evidence  that  the  principal,  at 
the  execution  of  the  power,  had  no  other  occupation  or  pursuit  than 
that  of  a  farmer,  cultivating  and  renting  his  lands,  and  that  it  was 
executed  in  view  of  a  contemplated  temporary  absence  from  the 
State.  This  evidence  was  proper,  to  enable  the  court  to  determine 
the  scope  of  the  agency,  and  to  ascertain  whether  the  act  in  question 
was  within  the  power  conferred.  The  general  expressions  of  the 
power  must  be  restrained  to  the  princi()al  business  of  the  party;  for 
it  is~This  which  is  presumed  to  have  been,  and  doubtless  was,  within 
his  contemplation,  and  which  he  was  willing  to  submit  to  the  agent. 
A  merchant,  about  going  abroad  temporarily,  delegated  to  an  agent 
full  and  entire  authority  to  sell  any  of  his  personal  property,  or  to 
buy  any  property  for  him,  or  on  his  account,  or  to  make  any  con- 
tracts, and  also  to  do  any  acts  whatsoever,  which  he  could,  if  per- 
sonally present ;  this  general  language  would  be  construed  to  ajiply 
only  to  buying  or  selling  connected  with  his  ordinary  business  as  a 
merchant.  Story  on  Agency,  §  21.  S(^  this  power  must  be  restrained 
and  limited  to  the  ordinary,  general  Inisiiicss  of  the  principal  in  the 
cultivation  and  renting  of  his  lands,  and  the  duties  and  transactions 
it  involved.  It  cannot  fairly  and  properly  be  extended  to  other  con- 
cerns of  the  principal,  which  cannot  be  [jrcstmicd  to  have  been  within 


442  Tin:  m  riioKirY  (Tart  2 

his  contoniplation,  niul  may  have  iXHiuiroil  an  ai;vnt  o{  am^tlior  char- 
actor  and  qualifications  to  transact.- 

Wlion  the  power  was  executed,  the  principal  was  surety  of  West 
and  I'.urns.  ai;ents  of  appellees,  on  a  penal  bond,  with  condition  for 
their  faithful  performance  of  the  ai^ency.  if  a  breach  of  the  bond 
had  then  occurred,  and  any  liability  rested  on  I  lie  i)rincipal,  he  was 
not  informed  of  it  ;  and  oi  course,  an  adjust nient  of  such  breach,  and 
a  chang-e  of  the  character  and  form  of  his  liability,  with  an  extension 
of  the  time  of  payment  to  his  principals,  was  not  within  his  contem- 
plation. These  matters  were  distinct  and  separate  from  his  general 
and  ordinary  business,  to  which  his  attention  was  directed,  and  in 
reference  to  which  he  was  delegating  authority.  The  power  did  not 
authorize  the  agent  to  adjust  them,  and  to  make  the  note  on  which 
the  suit  is  founded.  The  circuit  court  erred  in  charging  otherwise. 
Whether  the  facts  disclose  a  recognition,  and  acquiescence  in  the  act 
of  the  agent,  imparting  to  it  validity,  is  not  a  question  presented  for 
our  consideration. 

The  judgment  is  reversed,  and  the  cause  remanded. 


VERY  V.  LEVY. 

(Supreme  Court  of  the  Uuited  States,  1851.    13  How.  315,  14  L.  Ed.  173.) 

Suit  in  equity  to  foreclose  a  mortgage.  Answer,  satisfaction  of 
the  mortgage  by  an  agreement  wdth  one  Davis,  agent  of  complainant, 
to  pay  in  goods,  part  of  which,  to  the  amount  of  $1,898.25,  were 
delivered,  and  the  rest  of  wdiich  had  been  constantly  subject  to  the 
order  of  complainant.  Davis  had  full  power  to  trade,  sell,  and  dis- 
pose of  any  notes,  bills,  bonds,  or  mortgages,  held,  or  owned,  by 
\'ery  on  anv  resident  of  Arkansas.  The  circuit  court  decreed  the 
mortgage  satisfied. 

Curtis,  J.3  *  *  *  Upon  this  state  of  facts  we  are  of  opinion 
Davis  had  authority  to  enter  into  the  agreement  in  question.     Be- 

2  Acford :     Forges  v.  U.  S.  Mortgage  &  Trust  Co.,  203  N.  Y.  181,  90  N.  E. 

424  noil). 

In  the  case  of  written  powers,  it  must  appear  upon  a  fair  construftion  of 
the  whole  instrument  that  the  authority  in  question  is  to  Ije  found  witliin  the 
four  corners  of  the  instrument,  eitlier  in  express  terms,  or  hy  necessary  im- 
plication. Krvant  v.  La  P.anque  du  Peuple,  [1S931  A.  C.  170,  02  L.  .7.  P.  C. 
68  08  L  T  liep.  (X.  S.)  540.  1  Ileports.  3:;0,  41  Wkly.  Kep.  (!00;  Dehilield  v. 
lll'inois.  20  Wend.  192  (1841):  Id..  2  Hill,  159  (1841):  Doul)l('duy  v.  Ivress, 
50  N.  Y.  410,  10  Am.  Kep.  502  (1872);    Johnston  v.  Writ^lit,  0  Cal.  37::  (18.56). 

It  will  not  be  extended  hevond  what  is  necessary  and  proper  to  carry  into 
full  effect  the  authority.  Golinsky  v. •Allison,  114  Cal.  458,  46  Pac.  295  (1896) ; 
Rhine  v  P.lake,  1  White  &  W.  Civ.  Cas.  Ct.  App.  §  1000  (1881) ;  Gouldy  v.  Met- 
c-ilf  75  Tex  455  12  S.  W.  8.30,  10,  Am.  St.  Rep.  912  (1889);  Campbell  v.  Foster 
Iloiiie  Assn,  103  Pa.  609,  .30  Atl.  222,  26  L.  R.  A.  117,  43  Am.  St  Rep.  818 
(1894). 

3  Part  of  the  opinion  is  omitted. 


Ch.  2)  CONSTRUCTION    OF   THE    AUTHORITY  443 

sides  the  power  to  collect  and  sell,  is  the  power  to  trade  this  bond 
"^nd  mortgage.     It  might  be  difficult  to  attach  any  general  legal  sig- 
nification to  this  word.    But  considered  in  reference  to  the  particular 
facts  of  this  case,  we  think  its  meaning  sufficiently  clear. 

It  is  proved  by  Davis,  tliat  the  power,  though  general  in  its  terms, 
Avas^iven  sbrelv  in  reference  to  this  particular  bond  and  mortgage. . 
THebond  had  yet  four  years  to  run./  When,  therefore,  Davis  was 
authorized  to  collect  this  bond,  the  parties  to  the  letter  of  attorney 
must  have  had  in  view  some  agreement  respecting  its  extinguish- 
ment, which  should  vary  its  original  terms  of  payment;  and  when  he 
was  further  empowered  to  trade  it,  it  is  not  an  inadmissible  interpre- 
tation that  the  new  agreement  for  its  extinguishment,  which  he  was 
empowered  to  make,  might  be  an  agreement  to  receive  specific  ar- 
ticles in  payment.  It  has  been  said  that  special  powers  are  to  be 
construed  strictly.  If  by  this  is  meant,  that  neither  the  agent,  nor  a 
third  person  dealing  with  him  in  that  character,  can  claim  under 
the  power  any  authority  which  they  had  not  a  right  to  understand  its 
language  conveyed,  and  that  the  authority  is  not  to  be  extended  by 
mere  general  words  beyond  the  object  in  view,  the  position  is  cor- 
rect. But  if  the  words  in  question  touch  only  the  particular  mode  in 
which  an  object,  admitted  to  be  within  the  power,  is  to  be  eft'ected, 
and  they  are  ambiguous,  and  with  a  reasonable  attention  to  them 
would  bear  the  interpretation  on  which  both  the  agent  and  a  third 
person  have  acted,  the  principal  is  bound,  although  upon  a  more  re- 
fined and  critical  examination  the  court  might  be  of  opinion  that  a 
different  construction  would  be  more  correct.  Le  Roy  v.  Beard, 
8  How.  451,  12  L.  Ed.  1151;  Loraine  v.  Cartwright,  3  Wash.  C.  C. 
151,  Fed.  Cas.  No.  8,500;  De  Tastett  v.  Crousillat,  2  Wash.  C.  C. 
132',  Fed.  Cas.  No.  3.828;  1  Liv.  on  Agency,  403,  404;  Story  on 
Agency,  §  74.  Such  an  instrument  is  generally  to  be  construed,  as 
a  plain  man,  acquainted  with  the  object  in  view,  and  attending  rea- 
sonably to  the  language  used,  has  in  fact  construed  it.  He  is  not 
bound  to  take  the  opinion  of  a  lawyer  concerning  the  meaning  of 
a  word  not  technical,  and  apparently  employed  in  a  popular  sense. 
Withcrington  v.  Herring,  5  Bing.  456. 

In  this  case,  the  com]  lainant,  besifles  empowering  Davis  to  col- 
lect a  bond  not  yet  payable,  has  authorized  him  to  trade  it— a  word 
frequently  used  in  popular  language  to  signify  an  exchange  of  one 
article  for  another,  by  way  of  barter.  This  power  was  intended  by 
the  c«Mnplainant  to  be  acted  on  by  the  resiiondent,  a  jeweler,  in  the 
state  of  Arkansas,  and  we  think  he  cannot  complain  that  it  was  un- 
derstood in  its  popular  sense;*  more  especially  when  he  accepted, 
without  objection,  goods  amounting  to  $1,898.25,  and  gave  the  de- 

4 'llic  «'f.iislnicti<)ii  slii.iiM  lie  .■icct.riliim  to  Ilii>  sidrit  nillicr  tlum  !i<ci)r(liii'-: 
to  tin-  li-tt<'i-  of  |li<'  ii^truiiifiil.     Tiiylur  v.    H;iilu\v.  II    ]'.:\v\<.  •-'."-•J  (Isr.l). 


444  TiiH  AriiioKiiY  (Part  2 

fendant  no  notice  of  his  (lis<iMit  from  that  o<^nsl ruction  of  the  power 
under    which    his    agent    received    thcni,    in    part    payment    of    the 
bond.     *     *     * 
Decree  atlirmed. 


HEMSTREET  v.  BURDICK. 

(Supreme  Court  of  Illiuois,  1878.    90  111.  444.) 

In  1856,  D.  B.  Gardner  bought  certain  land,  giving  a  mortgage 
back.  He  paid  Httle  on  it,  and  in  1859  sold  to  Hempstead,  taking 
a  mortgage  back,  and  a  power  of  attorney,  authorizing  him  to  sell, 
or  lease,  or  collect  rents,  for  these  lands.  The  first  mortgage  was 
still  outstanding,  and,  the  interest  and  note  being  unpaid,  suit  was 
brought  in  1862,  which  was  settled  by  the  conveyance  to  the  mort- 
gagees, by  D.  B.  Gardner  under  his  power  of  attorney,  of  the  land 
in  controversy  and  other  land.  In  1874,  Hempstead  and  wife  con- 
veyed a  tract  including  this  land  to  Spencer.  The  bill  charges  that 
this  was  a  fraud  upon  the  rights  of  the  appellee,  who  holds  under  the 
conveyance  of  1862  and  prays  that  Spencer's  title  be  decreed  to  be 
held  in  trust  for  Burdick.     Decree  granted  and  defendants  appeal. 

Walker,  J.o  *  *  *  i^  ^\^q  insisted  that  the  power  of  attorney 
to  D.  B.  Gardner  from  Hemstreet  conferred  no  power  to  convey; 
that  it  authorized  him  to  sell,  lease,  collect  rents,  etc.,  and  that  such 
was  the  construction  put  on  it  by  Gardner  and  Hemstreet,  as  the 
former  always,  on  making  a  sale,  sent  the  deed  to  the  latter  to  ex- 
ecute. It  is  immaterial  what  construction  the  parties  to  the  instru- 
ment gave  it,  as  it  does  not  appear  that  the  trustees  knew  of  their 
so  doing.  They  purchased  under  the  advice  of  an  attorney  that  Gard- 
ner had  power  to  make  the  conveyance,  and  we  presume  they  acted 
in  good  faith.  But  it  is  not  material  what  the  attorney  in  fact,  or  his 
principal,  may  have  supposed, — the  question  is,  whether  the  instru- 
ment did  confer  the  power.  This  is  the  language  of  the  power  of 
attorney  conferring  the  power  to  act:  "To  sell  or  lease  any  and  all 
real  estate  belonging  to  me  in  said  county  of  Iroquois,  and  to  col- 
lect rents  for  any  such  property  so  rented  or  leased  by  him,  and  in 
and  about  the  leasing,  selling  and  collecting  of  rents,  or  any  of  them, 
as  aforesaid,  to  do  any  and  all  matters  and  things  as  fully  as  I 
could  do  were  I  personally  present  and  doing  the  same." 

The  whole  question  turns  on  the  meaning  that  shall  be  given  to  the 
word  "sell."  Its  popular  meaning,  we  think,  clearly  embraces  the 
power  to  contract  to  sell  and  to  convey  or  transfer  the  thing  sold. 
To  complete  the  sale  there  must  be  a  transfer  of  the  title  as  well  as 
the  thing  sold.    When  the  term  is  applied  to  personal  property,  there 

6  Part  of  the  opinion  is  omitted. 


Ch    2l      -S  ^^  CONSTRUCTION    OF   THE    AUTHORITY      /  44o 

is  rt»  aotlttt'lt  embraces  the  delivery  as  well  as  the  bargain  for  the 
sale — that  it  in  such  cases  means  the  bargain  for  the  sale,  the  receipt  jr/t  fy^ 
of  the  purchase  money  and  the  delivery  of  possession,  by  which  the '' 
sale  is  completed  and  the  title  vested  in  the  purchaser.  So  in  regard 
to  real  estate,  the  word  "sell,"  in  its  popular  sense,  implies  the  con- 
tract and  its  completion  by  conveyance.  Allr  know  that  a  sale  of  land 
is  not  complete  until  a  conveyance  is  ma^e  to  the  purchaser — until 
the  title  has  passed  to  and  vested  in  him.j  A  contract  or  agreement 
to  sell  does  not  pass  the  title  at  law,  altljough  in  equity  the  land  is 
considered  as  belonging  to  the  buyer;  blut  even  in  that  forum  the 
^  ^  sale  is  not  considered  as  complete,  as  it  will  compel  a  specific  per- 
formance, and  complete  the  sale  by  a  conveyance  of  the  title.  We 
regard  the  word  "sell,"  as  used  here,  as  giving  ample  power  to  com- 
plete a  sale  by  making  a  deed  of  conveyance  to  the  purchaser.  Such 
is  the  ruling  of  the  courts  of  California  and  Massachusetts.  See, 
Fogarty  v.  Sawyer,  17  Cal.  591,  and  Valentine  v.  Piper,  22  Pick.  8!" 
33  Am.  Dec.  715.  This  is,  then,  we  think,  supported  by  reason,  ^d 
also  by  authority. 

But  it  is  said  the  power  must  be  strictly  construed.  This  may  be 
true,  but  it  does  not  require  that  it  shall  be  so  construed  as  to  de- 
feat the  intention  of  the  parties.  Where  the  intention  fairly  appears 
from  the  language  employed,  that  intention  must  control.  A 
strained  construction  should  never  be  given  to  defeat  that  intention, 
nor  to  embrace  in  the  power  what  was  not  intended  by  the  parties." 
According  to  the  fair  and  reasonable  meaning  of  the  words,  we 
think  power  to  convey  was  conferred.  *  *  * 
Decree  affirmed. 


HOPWOOD  v.  CORP.TN. 

(Suprprae  Court  of  Iowa,  1SS4.     0.'{  Iowa,  218,  18  N.  W.  911.) 

Action  for  the  specific  performance  of  a  contract  for  the  sale  of  land 
made  by  Broadstreet  &  Day,  as  agents  for  defendant,  acting  under  au- 
thority of  two  letters  from  defendant's  authorized  agent.  Relief  de- 
nied. 

1  For  a  valiiiitilc  review  of  the  principles  of  eonstructlon,  and  of  the  authori- 
ties, see  Mutli  v.  Goddanl.  2^  M<'nt.  2.'{7.  72  Tac  (;21.  OS  Am.  Sf.  Hep.  r,5;'. 
(IfMKJ).  The  power  will,  if  possililc,  l)e  so  construed  as  to  ^ivc  efl'ocf  to  the 
Jntt'Ut  rif  the  parties  as  it  is  found  in  the  wnrds  nf  the  lustruuicnl  (Suell  v. 
W«-yt'rliauscr.  71  .Miini.  'tl,  7.".  -N.  W.  C,:v.',  IISMS)),  and  in  the  ol).ject  to  be  ac- 
rouiplishfd  (I'dsucr  v.  I'.iivlfss,  '>U  .Md.  .'iC  |iss2|;  Ilolladay  v.  D.-iily,  10  W.mII. 
♦UX;.  l!li  L.  Kd.  1S7  flS7::|:  I'f'rry  v.  HdII.  2  De  G.,  V.  &  J.  3S.  20  L.  J.  Ch. 
«;77  (ISWl;  National  I'.aulv  v.  Old  Town  I'.anU.  112  Fed.  720.  r.O  C.  C.  A.  H:i 
flOf>2|)  and  so  as  tf)  >;lve  flTfct.  if  possible,  to  all  the  Rrants  of  power  (Vatiada's 
Heirs  V.  Hopkins'  Adiu'r,  21  Ky.  H  J.  J.  Marsli.)  2S.^,.  10  Am.  Dec.  92  IIS'JOI). 


?( 


i 


44« 


TlIK    Al   THDltlTY 


(Part  L> 


l\i:i:n,  J."  +  *  *  2.  The  next  (Hiostion  in  the  case  is  wlu'thcr 
Rroailstroot  <S:  Pay  were  cmpowcrcil  li\  llic  K'tlcrs  lo  make  llie  con- 
tract. Willie  there  is  one  expression  in  the  letter  of  C)ctol)er  7th  which. 
if  consiilcred  alone,  would  seem  to  indicate  an  intention  hy  defendant 
to  reserve  the  rii^ht  to  reject  or  accept  any  offer  which  niii^ht  he  made 
for  any  portion  of  the  lantl,  we  think,  when  the  letters  are  considered 
together,  that  they  confer  on  the  agents  the  power  to  make  the  con- 
tract. The  defentlant  transmitted  to  them  the  list  and  the  prices  at 
which  he  would  sell  the  land  with  the  first  letter,  and  in  that  letter  he 
tells  them  that  if  they  can  effect  any  sales  he  will  he  glad  of  it,  although 
he  reserves  the  right  to  sell  through  other  parties,  if  satisfactory  oft"ers 
are  made  through  them.  But  he  answers  them  that  if  they  find  pur- 
chasers at  the  prices  named  in  the  list  before  the  land  is  sold  to  other 
parties,  their  customers  shall  have  it.  In  the  second  letter  he  tells  them 
that  "sales  of  the  lands  described  can  be  made  on  the  terms  one-fourth 
to  one-third  cash,"  etc.  The  fair  construction  of  all  this  language  is, 
that  it  empowers  the  agents  to  contract  for  the  sale  of  any  of  the  land 
at  the  prices  and  on  the  terms  named,  subject  to  the  right  reserved  by 
defendant  to  sell  through  other  parties,  if  he  receives  satisfactory 
otters  through  them  before  these  agents  have  found  purchasers.  And 
this  construction  has  been  put  upon  it  by  the  agents  who  have  con- 
tracted with  plaintiff'  for  the  sale  of  the  land  in  the  honest  belief  that 
the  power  to  make  the  contract  was  conferred  on  them  by  the  letters. 

It  may  be  that  the  language  is  capable  of  the  construction  claimed 
for  it  by  defendant,  viz.,  that  it  only  empowered  the  agents  to  submit 
the  offer  of  plaintiff  to  him,  and  that  he  reserved  the  right  to  accept  or 
reject  the  offer;  but  it  is  certainly  open  to  the  construction  put  upon 
it  by  the  other  parties,  and  the  true  rule  of  construction  undoubtedly 
is  that  when  the  language  of  a  writing  is  ambiguous  it  shall  be  taken 
most  strongly  against  the  contractor,**  and  especially  is  this  true  when 
a  construction  of  which  it  is  fairly  susceptible  has  been  placed  upon  it, 
and  third  parties  have  been  induced  to  act  in  the  belief  that  that  con- 
struction is  the  correct  one.    Jackson  v.  Blodget,  16  Johns.  172;  Mel- 

7  Part  of  the  opinion  is  omitted. 

8  The  aniliisruit.v  nia.v  often  be  resolved  by  considering;  tlie  sitnation  of  tlie 
partie.«.  as,  e.  g.,  the  Illiteracy  of  the  principal  and  the  remoteness  of  the  busi- 
ness (Texas  Loan  Agency  v.  Miller,  9i  Tex.  4CA.  01  S.  W.  477  [1901]),  the 
exigencies  of  the  Itnsiness  (Mnth  v.  Goddard,  28  Mont.  'SM,  72  Pac.  621,  98 
Am.  St.  Rep.  oij'^  [190:'>|),  or  the  position  of  the  principal  (Le  Koy  v.  Beard,  8 
How.  4ni,  12  L.  Ed.  11.=>1  [isnoi;  Maynard  v.  Mercer.  10  Nev.  ;',:{  [187rj]).  It 
is  the  duty  of  the  principal  to  make  his  terms  so  clear  that  they  cannot  be 
misconstrued.  Halff  v.  0"Cunner,  14  Tex.  Civ.  App.  191,  :i7  S.  W.  2.%  (1896). 
P>ut  because  the  instructions  are  not  clear  the  agent  is  not  thereby  authorized 
to  disregard  them  entirely.  Oxford  Lake  Line  v.  First  Xat.  P.ank,  40  Ha. 
:'.49,  24  South.  480  (1S9S).  Though  he  will  be  excused  if  he  has  bona  tide 
adoFited  a  i)ermissible  construction.  Berry  v.  Ilaldeman,  111  Mich.  667,  70 
\.  \V.  :'>2n  (1S97). 


Ch.  2)  CONSTRUCTION   OF   THE    AUTHORITY  447 

vin  V.  Prop'rs,  5  Mete.  15,  38  Am.  Dec.  384;  Broom,  Leg.  ^lax.  571. 

3j:  :ic  sjc 

The  judgment  of  the  circuit  court  dismissing  plaintiff's  petition  is 
reversed,  and  the  cause  will  be  remanded,  with  directions  to  enter  a 
judgment  requiring  the  defendant,  upon  the  payment  by  plaintiff  of  the 
balance  of  the  purchase  money,  with  interest  at  8  per  cent,  from  Oc- 
tober 20,  1880,  within  such  time  as  the  court  shall  direct,  to  execute 
to  him  a  conveyance  of  the  premises;  or,  if  plaintiff  so  elects,  such 
judgment  will  be  entered  herein. 


REXWICK  V.  WHEELER. 

(Circuit  Court  of  the  United  States,  D.  Iowa,  1880.  48  Fed.  431.) 
McCrary,  J.°  This  is  a  bill  in  equity  praying  the  cancellation  of 
a  certain  judgment  appearing  upon  the  records  of  the  district  court 
of  Scott  County,  Iowa,  in  favor  of  the  defendant  and  against  the 
plaintiff,  on  the  ground  that  the  same  has  been  settled  and  satisfied. 
The  judgment  was  rendered  on  the  18th  day  of  February,  1861,  in  a 
suit  for  the  foreclosure  of  a  mortgage  upon  certain  real  estate.  The 
mortgaged  property  was  sold  under  the  judgment  in  1861.  and  bought 
in  by  Wheeler,  for  $700,  and  the  sheriff's  deed  was  immediately  made 
to  him.  This  left  a  balance  unsatisfied  on  the  record  which  now 
amounts,  including  interest  at  10  per  cent.,  to  something  over  $2,000. 
No  attempt  was  ever  made  to  collect  this  balance  until  December,  1878, 
about  17  years  after  the  date  of  the  judgment,  when  a  general  execu- 
tion was  issued,  and  attempts  were  made  to  enforce  its  payment,  which 
led  to  the  filing  of  this  bill,  and  the  allowance  of  a  temporary  injunction 
to  restrain,  until  further  order,  the  collection  of  the  judgment. 

The  note  and  mortgage  on  which  said  judgment  of  foreclosure  was 
rendered  were  made  by  complainant,  James  Renwick,  to  defendant, 
Wheeler,  April  8,  1857,  for  the  purchase  moncv  of  a  piece  of  land  in 
Davenport,  then  purchased  by  Renwick  from  Wheeler  through  Wheel- 
er's agent  and  attorney  in  fact,  Erastus  Ripley.  Wheeler  resided  in 
Pennsylvania,  and  Ripley  in  Davenport.  Iowa.  Renwick,  who  also  re- 
sided in  Davenport,  made  certain  payments  on  the  mortgage  debt, 
amounting  in  the  ac,'grcgate  to  $565.  The  sum  secured  by  the  mort- 
gage was  $1,400,  with  interest,  and  the  mortgage  covered,  besides  the 
land  purchased  from  Wheeler,  another  adjoining  tract,  for  which  Ken- 
wick  had  paid  $600.  Before  the  commencement  of  the  foreclosure 
suit,  Renwick  had  become  financially  embarrassed,  and  was  unal)lc  to 
pay  the  balance  of  the  debt ;  and  he  alleges  in  the  jiresent  bill  that  he 
entered  into  an  agreement  with  Wheeler,  through  his  agent.  Ripley, 
that  Wlieelcr  should  take  the  entire  mortgaged  projierty  in  satisfaction 
of  the  balance  due,  and  that  to  carry  out  this  agreement  (Renwick  be- 

"  I'art  of  the  oi)inion  is  oniitted. 


us  Tin:  AUTiiouiTY  (Part  2 

ing  unable  to  make  a  good  title  by  deed  on  account  of  judgments  against 
him)  an  amicable  foreclosure  was  had,  in  which  the  judgment  in  ques- 
tion was  rendered  by  default,  and  was  left  unsatisfied,  after  the  sale, 
by  negligence  or  oversight.  The  controversy  here  is  (1)  as  to  the 
truth  of  this  allegation;  and  (2)  as  to  its  sufficiency  as  a  matter  of 
law  to  entitle  the  complainant  to  the  relief  sought.     *     *     * 

It  is  insisted  on  behalf  of  defendant  that  it  does  not  appear  that 
Ripley,  the  agent  of  Wheeler,  had  authority  to  make  the  contract  re- 
lied upon.  This  depends  upon  the  construction  of  the  power  of  attor- 
ney under  vi^hich  Ripley  acted.  That  instrument,  which  is  before  us, 
after  authorizing  the  agent  to  sell,  convey,  or  mortgage  any  real  estate 
belonging  to  Wlieeler  within  the  state  of  Iowa,  and  to  collect  all  sums 
due  on  that  account,  provides  as  follows :  "And  we  do  further  con- 
stitute the  said  Erastus  Ripley  our  general  attorney  in  fact  to  transact 
any  or  all  business  for  us,  or  either  of  us,  of  any  kind  whatsoever,  in 
the  state  of  Iowa ;  to  rent  houses  and  sign  leases,  and  to  collect  money, 
execute  receipts  for  the  same,  and  to  satisfy  any  mortgages  made  or 
to  be  made  to  us,  or  either  of  us,  upon  any  lands  in  the  state  of  Iowa; 
it  being  the  true  intent  and  meaning  of  this  instrument  to  confer  upon 
the  said  Erastus  Ripley  full  and  unrestricted  power  and  authority  to 
act  for  us  in  all  matters  of  every  kind  whatsoever  arising,  or  that  may 
arise,  in  the  said  state  of-  Iowa." 

It  is  said  that  the  general  language  in  this  power  of  attorney  is  re- 
strained by  the  special  and  specific  authority  elsewhere  in  the  same 
instrument  conferred.i/The  general  rule  is  that  general  terms  follow- 
ing, in  the  same  instrament,  words  which  confer  a  specific  authority, 
are  to  be  held  subordinate  to,  and  as  limited  by,  the  specific  authority. 
Instruments  of  this  character  are  strictly  construed ;  and  the  authority 
is  never  extended  beyond  that  which  is  given  in  terms,  or  which  is 
necessary  or  proper  for  carrying  the  authority  so  given  into  full  eflFect. 
Story,  Ag.  par.  68.^**  And  language,  however  general  in  its  form,  when 
used  in  connection  with  a  particular  subject-matter,  will  be  presumed 
to  be   used   in   subordination   to   that   matter,   and   therefore   to   be 

10  Accord:  Rountree  v.  Denson,  59  Wis.  522,  18  N.  W.  518  (1884).  Author- 
ity to  act  concerning  mining  operations,  followed  by  authority  to  sign  the 
principal's  name  to  any  paper  of  a  certain  sort,  does  not  give  authority  to  sign 
paper  except  about  the  mining  business,  and  also  paper  of  the  sort  specified. 
Washburn  v.  Alden,  5  Cal.  463  (1855).  General  power  to  bind  the  principal, 
in  the  absence  of  evidence  of  a  different  intent,  must  be  construed  as  giving 
authority  to  bind  him  separately,  and  not  conjointly  with  another,  Harris  v. 
Johnston,  54  Minu.  177,  55  X.  W.  970,  40  Am.  St.  Rep.  312  (1S93). 

As  to  whether  the  construction  of  the  agent's  power  is  for  court  or  jury, 
see  post,  p.  S.'O;  also,  Claflin  v.  Continental  Works.  85  Ga.  27,  11  S.  E.  721 
(1890),  ante,  p.  337;  and  Booth  v.  Kessler,  62  N(>b.  704,  87  N.  W.  5.32  (1901) ; 
post.  p.  848, 

While  the  existence  of  an  agency  is  a  question  of  fact,  what  may  lawfully 
be  done  thereunder  is  a  question  of  law.  Long  Creek  Building  Ass'n  v.  Stnte 
Ins.  Co.,  29  Or.  509,  40  Rac.  366  flSWJ) ;  Ilalladay  v.  Underwood,  90  111.  App. 
1.30  ri.<^99):  Berry  v.  Ilaldeman,  111  Mich.  007.  70  N.  W.  .325  (1897);  Loudon 
Sav.  Fund  Society  v.  Hager.^town  Sav.  Bank,  36  Pa.  498  (1897);  78  Am.  Dec, 
:','.)()  (18(;0).    As  to  evidence  of  agency,  see  p.  820. 


Ch.  2)  CONSTRUCTION   OF   THE   AUTHORITY  449 

construed  and  limited  accordingly.  Id.  par.  62.  x\pplying  these  rules 
to  the  power  of  attorney  under  consideration,  it  appears  that  the  par- 
ticular subject-matter  was  the  business  of  Wheeler  in  the  state  of 
Iowa,  relating  to  his  real  estate,  including  selling,  mortgaging,  leasing, 
collecting  moneys  due  for  rents  or  as  purchase  money,  and  including 
the  satisfaction  of  mortgages.  With  respect  to  all  business  of  this 
general  nature  within  the  state  of  Iowa,  Ripley,  as  Wheeler's  agent, 
had  "unrestricted  power  and  authority,"  and  was  to  act  as  his  "gen- 
eral attorney  in  fact."  The  settlement  in  question  was  a  transaction 
relating  to  the  particular  subject-matter  of  the  agency;  and  therefore 
the  agent  had  discretionary  power  to  accept  the  mortgaged  premises 
in  full  for  the  debt.  *  *  * 
Decree  for  complainant. 
GODD.PE.&  A.— 29 


4otJ  TijK  AiTuoKiTY  (Part  2 

CHAPTER  III 
EXECUTION  OF  THE  AUTHORITY 


SECTION  1.— IN  GENERAL 


WILKS  V.  BACK. 

(Court  of  King's  Bench,  1802.    2  East,  142,  G  R.  R.  409.) 

Motion  to  set  aside  an  award  of  arbitration.  The  bond  of  submis- 
sion to  arbitration  had  been  signed:  "Mathias  Wilks.  [L.  S.]  For 
James  Browne,  Mathias  Wilks.  [L.  S.]"— and  was  sealed  and  de- 
livered by  Wilks  for  himself  and  also  for  his  late  partner,  Browne. 

LawrexcE,  J.  No  doubt  in  point  of  law,  the  act  done  must  be 
the  act  of  the  principal,  and  not  of  the  attorney  who  is  authorized  to 
do  it.  The  w^hole  argument  has  turned  upon  an  assumption  of  fact 
that  this  was  the  act  of  the  attorney,  which  is  not  well  founded.  This 
is  not  like  the  case  in  Lord  Raymond's  Reports,  where  the  attorney 
had  demised  to  the  defendant  in  her  own  name,  which  she  could  not 
do;  for  no  estate  could  pass  from  her,  but  only  from  her  principal. 
But  here  the  bond  was  executed  by  Wilks  for  and  in  the  name  of  his 
principal:  and  this  is  distinctly  shewn  by  the  manner  of  making  the 
signature.  Not  that  even  this  was  necessary  to  be  shewn  ;  for  if  Wilks 
had  sealed  and  delivered  it  in  the  name  of  Browne,  that  would  have 
been  enough  without  stating  that  he  had  so  done.  However,  he  first 
signs  his  own  name  alone  opposite  to  one  seal  to  denote  the  sealing 
and  delivery  on  his  own  account,  and  then  opposite  the  other  seal  he 
denotes  that  the  sealing  and  delivery  was  for  James  Browne.  There 
is  no  particular  form  of  words  required  to  be  used,  provided  the  act  be 
done  in  the  name  of  the  principal. 

Le  Blanc,  J.  Wilks  first  signed  it  in  his  own  name,  as  for  himself, 
and  then  to  denote  that  the  act  was  also  done  in  the  name  of  Browne, 
he  signed  it  again  for  James  Browne.  I  cannot  see  what  diflference  it 
can  make  as  to  the  order  in  which  the  names  stand. 

Rule  discharged. 


Ch.  3)  EXECUTION    OF    THE    AL'THORITY 


POST  V.  PEARSON. 

(Supreme  Court  of  the  United  States,  1SS2.    lOS  U.  S.  418,  2  Sup.  Ct.  790,  27 

L.  Ed.  774.) 

Action  against  A\"hitney  and  Post,  as  partners  under  the  name  of 
the  Keets  ^Mining  Company,  on  a  contract  made  by  Whitney  as  super- 
intendent of  the  company,  and  signed:  "A.  W.  Whitney.  [Seal.] 
Supt.  Keets  Mining  Co.  [Seal.]  John  B.  Pearson.  [Seal.]."  Oral 
evidence  was  allowed  to  show  that  Post  was  a  partner  of  Whitney, 
and  Post  brings  error. 

Gray,  J.  It  is  unnecessary  to  consider  whether,  if  this  were  to  be 
treated  as  a  contract  under  seal,  it  could  be  held  to  be  upon  its  face  the 
contract  of  the  Keets  Mining  Company,  and  not  of  Whitney  only,  or 
whether  the  oral  testimony  would  have  been  admissible  to  charge  Post : 
because,  by  the  Civil  Code  of  Dakota,  "all  distinctions  between  sealed 
and  unsealed  instrum.ents  are  abolished,"  and  "any  instrument  within 
the  scope  of  his  authority,  by  which  an  agent  intends  to  bind  his  prin- 
cipal, does  bind  him,  if  such  intent  is  plainly  inferable  from  the  instru- 
ment itself."    Civ.  Code  Dak.  1877,  §§  925,  1373.^ 

By  the  subject-matter  of  this  contract,  which  is  the  delivery  and 
milling  of  ore  from  the  Keets  mine ;  by  the  description  of  Whitney, 
both  in  the  body  of  the  contract  and  in  the  signature,  as  superintendent 
of  the  Keets  ]\Iining  Company;  and  by  the  use  of  the  words  "parties 
of  the  first  part,"  which  are  applicable  to  a  company  and  not  to  a  single 
individual,  the  contract  made  by  the  hand  of  Whitney  clearly  api")cars 
upon  its  face  to  have  been  intended  to  bind,  and  therefore  did  bind. 
the  company ;  and,  upon  proof  that  Post  was  a  partner  in  the  company, 
bound  him.  Whitney  v.  Wyman.  101  U.  S.  392.  25  L.  Ed.  1050; 
Hitchcock  V.  Buchanan,  105  U.  S.  416,  26  L.  Ed.  1078;  Goodenough  v. 
Thayer,  132  Mass.  152. 

The  order  sustaining  Post's  demurrer  to  the  original  complaint  gave 
the  plaintiff  leave  to  amend,  and  did  not  preclude  the  plaintiff  from 
renewing,  nor  the  court  from  entertaining,  the  same  question  of  law 
upon  a  fuller  develoi)mcnt  of  the  facts  at  the  trial  on  the  amended 
complaint.    Calder  v.  Hayncs,  7  Allen,  387. 

Judgment  affirmed. 

1  The  strict  rule  as  to  tlie  exemtion  of  Instrtimonts  undor  po.al  no  lonsor 
nfiplics  in  siiiiic  statt'S  wlu-ro  disliiicliuiis  as  tn  seals  aro  aliolislicd  l>.v  stalut*'. 
Whf'oUT  V.  Waldcii.  17  Ncl>.  122.  22  .\.  W.  '.'.W  (INS.".).  Tliouicii  some  courts 
hold  tliat  statutes  dispetisintr  with  the  necessity  of  seals  have  not  chan^c'd  the 
roi:.nn»ii-la\v  rule  a.s  to  deeds  executed  by  agents.  Jones  v.  Morria,  Ul  Ala. 
518  (1878). 


•452  TDB   ADTHOUITI  (P^^t  2 

WILSON  V.  r.EARDSLEY. 

(Supreme  Court  of  NobrasUu.  IsSii.    20  Neb.  449,  30  N.  W.  529.) 

Maxwktj,.  C.  J.  The  facts  in  the  nhove  case  are  substantially  as 
follows:  Wilson  &  Larison,  the  plaintiffs  in  error,  were,  at  the  time 
referred  to  herein,  and  are  now,  importers  and  jobbers  of  tea,  cigars, 
and  spices,  having  their  principal  place  of  business  at  Omaha,  Nebras- 
ka. During  the  times  aforesaid  they  had  in  their  employ  a  traveling 
salesman  named  A.  P.  Nichols.  Under  their  contract  of  hire  with  him 
they  were  to  pay  him  a  salary  of  ?75  per  month,  ajid  commissions  upon 
all  sales,  and  he  was  to  pay  his  own  expenses.  On  the  fifth  of  January, 
1S83.  Wilson  &  Larison  wrote  a  letter  to  Nichols,  at  Ogden,  Utah, 
telling  him,  among  other  things,  that  he  might  draw  on  them  for  $75. 
This  "letter  Nichols  received,  and  altered  by  prefixing  the  figure  "1" 
to  "75,"  so  that  it  read  $175.  The  change  was  skillfully  made,  and 
well  calculated  to  deceive. 

The  testimony  shows  that  Nichols,  at  this  time,  was  a  guest  of  de- 
fendant in  error;  that  Nichols  desired  to  draw  on  plaintififs  in  error 
for  $150;  that  it  was  made  to  appear  that  an  indorser  to  the  draft 
about  to  be  drawn  was  necessary ;  that  defendant  in  error  was  request- 
ed by  Nichols  to  indorse  said  draft,  and,  as  an  inducement  to  do  so, 
exhibited  to  him  and  the  bank  cashier  the  letter  of  plaintiffs  in  error, 
altered  as  aforesaid,  apparently  authorizing  him  to  draw  on  them  for 
$175 ;  that  on  the  faith  and  credit  of  that  letter  defendant  in  error  did 
indorse  said  draft ;  that  in  due  course  of  business  said  draft  was  pre- 
sented to  plaintiflfs  in  error  at  Omaha  for  payment,  and  payment  by 
them  was  refused  on  the  ground  of  "no  funds" ;  that  said  draft  was 
thereupon  duly  protested,  and  returned  unpaid  to  the  bank  at  Ogden, 
where  defendant  in  error  was  required  to  pay,  and  did  pay,  the  full 
amount  of  the  draft,  with  protest  fees,  amounting  in  all  to  $152.25. 

On  the  trial  of  the  cause  in  the  court  below  judgment  was  rendered 
for  $75  in  favor  of  Beardsley,  from  which  the  plaintiffs  herein  bring 
the  cause  into  this  court  by  petition  in  error. 

No  case  has  been  cited  exactly  in  point  by  either  party,  and  we  are 
compelled  to  adopt  such  a  rule  as  will,  as  far  as  possible,  do  justice 
between  the  parties.  The  rule  is  well  settled  that  a  principal  will  be 
bound  by  the  acts  of  his  agent  within  the  scope  of  his  apparent  au- 
thority. St.  Louis  &  M.  P.  Co.  V.  Parker,  59  111.  23 ;  Fatman  v.  Leet, 
41  Ind.  133;  Kerslake  v.  Schoomaker,  3  Thomp.  &  C.  524;  Tucker  v. 
Woolsey,  64  Barb.  142;  Philadelphia,  etc.,  R.  Co.  v.  Weaver,  34  Md. 
431;  Bronson  v.  Chappell,  12  Wall.  681,  20  L.  Ed.  436;  Golding  v. 
Merchant,  43  Ala.  705.  The  plaintiflfs  must  have  intended  that  their 
letter,  above  referred  to,  should  be  used  as  a  letter  of  credit  to  enable 
Nichols  to  obtain  the  $75  upon  the  draft  which  he  was  authorized  to 
draw  on  them.  To  this  extent  he  was  acting  within  the  scope  of  his 
authorit)',  and  his  acts  were  valid.     The  draft,  therefore,  was  unau- 


Ch.  3)  EXECUTION  OF  THE  AUTHORITY  453 

thorized  only  as  to  the  excess  over  $75.  Nichols  was  the  plaintiffs' 
agent,  and  so  held  out  by  them,  to  some  extent  at  least,  as  being  trust- 
worthy. This  fact,  while  it  would  not  make  them  liable  for  any  ma- 
terial alteration  in  the  letter  made  by  such  salesman,  is  yet  a  circum- 
stance tending  to  show  that  he  had  some  claim  upon  them,  and  there- 
by, no  doubt,  led  to  less  careful  inquiry  in  regard  to  the  extent  of  the 
agent's  authority  than  otherwise  would  have  been  had.  The  letter  was 
in  the  nature  of  a  power  of  attorney,  by  which  the  principals  agreed 
to  ratify  the  act  of  the  agent  to  a  certain  extent,  authorizing  him  to 
draw  in  his  own  name  upon  them  for  a  certain  amount.'  Now,  sup- 
pose that  the  agent  had  changed  this  so  as  to  show  authority  in  him 
to  draw  two  drafts  on  the  plaintiffs,  each  for  $75,  could  they  plead, 
as  a  defense  to  the  first  draft,  that  it  was  unauthorized,  and  that,  there- 
fore, an  innocent  indorser,  relying  upon  their  letter,  should  be  de- 
frauded? We  think  not.  The  authority  would  be  wanting  only  as  to 
the  second  draft.  The  same  rule  is  applicable  here;  there  being  an 
actual  authority  to  draw  to  the  extent  of  $75. 

The  judgment  of  the  court  below  is  clearly  right,  and  is  affirmed. 


SECTION  2.— SEALED  INSTRUMENTS 


CLARKE'S  LESSEE  v.  COURTNEY. 

(Supreme  Court  of  the  United  States,  1831.    5  Pet.  319,  8  L.  Ed.  140.) 

Ejectment  against  a  large  number  of  persons  in  possession  of  a  large 
tract  of  land  in  Kentucky.  Plaintiff  claimed  under  demise  from  Jjimes 
B.  Clarke,  and  some  of  the  defendants  on  a  deed  of  relinquishment  by 
Carey  L.  Clarke,  as  attorney  in  fact  of  James  B.  Clarke  and  wife. 

Story,  J.^  [After  holding  that  the  power  of  attorney  gave  no 
authority  to  make  such  a  release:]  ♦  ♦  *  B^^t  jf  this  objection 
were  not  insuperable,  there  is  another,  which,  though  apparently  of  a 
technical  nature,  is  fatal  to  the  relinquishment.  It  is,  that  the  deed  is 
not  executed  in  the  names  of  Clarke  and  his  wife,  but  by  the  attorney, 
in  his  own  name.  It  is  not,  then,  the  deed  of  the  principals,  but  the 
deed  of  the  attorney.    The  language  is,  "I,  the  said  Carey  L.  Clarke, 

2  An  act  (lone  under  an  authority  must  he  done  In  pursujinoe  of  that  au- 
tliorlty.  C'liiian  v.  Cooko,  1  Sdi.  v.  IaT.  :;l',  0  Kcv.  IIcii.  .'{  (is(iij).  If  an  a^'oiil 
lining'  up  M  lilaiik  notf  exceeds  his  autliority,  tlie  note  is  not  void  in  intu. 
I»ut  oidy  for  the  excess  umouut.  .Tohnson  v.  TMas(hiIc,  0  Miss.  (1  Smed(>s  iV 
M.)  17,  40  Aui.  Dec.  85  QSJ.'J).  If  the  contract  is  separalile,  It  will  1)0  iii'lieid 
to  the  extent  of  the  autliority.  (Jano  v.  C.  &  N.  W.  l{y.  Co.,  41)  Wis.  57,  5  N. 
\y.  15  ri'^sOi.  I'.ut  if  tliere  Is  no  way  to  deterniiue  what  Is  .MUtliorlzed,  and 
\rhat  Is  not,  the  whole  execution  is  defective.  Choteau  v.  Allen,  70  Mo.  290 
(1S7!)). 

3  I'art  of  the  opinion  Is  omitted. 


•ir»-4  Tiiio  Ai'TiioKiiv  (Part  2 

attorney  as  aforosaiil,"  iJvc.  "do  horfl)y  rclimiuisli,"  iJvc. ;  ami  the  attest- 
ing clause  is,  "in  witness  \vlieret)f  the  said  Carey  L.  Clarke,  attorney  as 
aforosaiil,  has  hereunto  suhscrihed  his  hand  and  seal,  lliis  25th  day  of 
Xovemher.  in  the  year  of  our  Lord  1800.     Carey  L.  Clarke,  |  L.  S.]" 

'I'he  act  (.loes  not  therefore  purjiort  to  he  the  act  of  the  principals, 
hut  of  the  attorney.  It  is  his  deed,  and  his  seal,  and  not  theirs.  This 
may  savour  of  retinenicnt,  since  it  is  apparent  that  the  party  intended 
to  pass  the  interest  and  title  of  his  princijials.  lUit  the  law  looks  not 
to  the  intent  alone,  hut  to  the  fact  whether  that  intent  has  hecn  ex- 
ecuted in  such  a  manner  as  to  possess  a  legal  validity.* 

The  leading  case  on  this  suhjcct  is  Conihe's  Case,  9  Co.  R.  75,  ante, 
p.  35,  where  authority  was  given  by  a  copy  holder  to  two  persons  as 
his  attorneys,  to  surrender  ten  acres  of  pasture  to  the  use  of  J.  N. ;  and 
afterwards,  at  a  manor  court  they  surrendered  the  same,  and  the  entry 
on  the  court  roll  was,  that  the  said  attorneys  in  the  same  court  showed 
the  writing  aforesaid,  bearing  date,  &c.  and  they,  by  virtue  of  the  au- 
thority to  them  by  the  said  letter  of  attorney  given,  in  full  court,  sur- 
rendered into  the  hands  of  the  said  lord  the  said  ten  acres  of  pasture, 
to  the  use  of  the  said  J.  N.  &c. ;  and  the  question  was  whether  the 
surrender  was  good  or  not,  and  the  court  held  it  was  good.  "And  it 
was  resolved,  that  when  any  has  authority  as  attorney  to  do  any  act, 
he  ought  to  do  it  in  his  name  who  gives  the  authority,  for  he  appoints 
the  attorney  to  be  in  his  place,  and  to  represent  his  person ;  and  there- 
fore the  attorney  cannot  do  it  in  his  own  name,  nor  as  his  proper  act, 
l)ut  in  the  name  and  as  the  act  of  him  who  gives  the  authority.  And 
where  it  was  objected  that  in  the  case  at  bar  the  attorneys  have  made 
the  surrender  in  their  own  name,  for  the  entry  is  that  they  surrendered, 
it  w^as  answered  and  resolved  by  the  whole  court,  that  they  have  w^ell 
performed  their  authority ;  for,  first,  they  showed  their  letter  of  attor- 
ney, and  then  they  by  the  authority  to  them  by  the  letter  of  attorney 
given,  surrendered,  (S:c.  which  is  as  much  as  to  say,  as  if  they  had  said, 
we,  as  attorneys,  &c.  surrender,  &c.  and  both  these  ways  are  sufficient. 
As  he  who  has  a  letter  of  attorney  to  deliver  seisin  saith,  I,  as  attor- 
ney to  J.  S.  deliver  you  seisin ;  or,  I,  by  force  of  this  letter  of  attorney, 
deliver  you  seisin.  And  all  that  is  well  done,  and  a  good  pursuance  of 
his  authority.  But  if  attorneys  have  power  by  writing  to  make  leases 
by  indenture  for  years,  &c.  they  cannot  make  indentures  in  their  own 
names,  but  in  the  name  of  him  who  gives  the  w-arrant." 

Such  is  the  language  of  the  report,  and  it  has  been  quoted  at  large, 
because  it  has  been  much  commented  on  at  the  bar;  and  it  points  out 

*  An  interesting  review  of  the  early  cases  is  given  in  Townsend  v.  Corning, 
•_'.■;  Wend.  4X5  (1840).  While  courts  will  interpret  the  words  in  a  deed  so  as 
to  effectuate  the  intent  of  the  parties  appearing  from  the  whole  instrument, 
yet  thL'  words  must  be  there  to  interpret.  The  court  cannot  supply  these,  nor 
may  thev  be  supplied  liy  evidence  aliunde.  Cadell  v.  Allen,  !):)  N.  ('.  .")J2,  (5 
S.  E.  :\m  (1888).  That  it  is  absurd  to  give  a  .seal  the  effect  of  changing  the 
jiarties  liable  on  a  contract  was  pointed  out  in  Eckhart  v.  IJeidel,  10  Tex. 
€2  (1850). 


Ch.  3)  EXECUTION  OF  THE  AUTHORITY  455 

a  clear  distinction  between  acts  done  in  pais,  and  solemn  instruments 
or  deeds,  as  to  the  mode  of  their  execution  by  an  attorney.  It  has 
been  supposed  that  the  doctrine  of  Lord  Holt  in  Parker  v.  Kett,  1 
Salk.  95,  and  better  reported  in  2  Mod.  R.  466,  intimated  a  different 
opinion.  But  correctly  considered  it  is  not  so.  Lord  Holt  expressly 
admits  (468),  that  the  doctrine  in  Coombe's  Case,  that  he  who  acts 
under  another  ought  to  act  in  his  name,  is  good  law  beyond  dispute : 
and  the  case  there  was  distinguishable;  for  it  was  the  case  of  a  sub- 
deputy  steward,  appointed  to  receive  a  surrender,  which  was  an  act  in 
pais.  However  this  may  be,  it  is  certain  that  Coombe's  Case  has  never 
been  departed  from,  and  has  often  been  acted  upon  as  good  law.  In 
Frontin  v.  Small,  2  Ld.  Rayni.  1418,  where  a  lease  was  made  between 
M.  F.  "attorney  of  J.  F."  of  the  one  part,  and  the  defendant  of  the 
other  part,  of  certain  premises  for  seven  years,  in  a  suit  for  rent  by 
M.  F.,  it  was  held  that  the  lease  was  void  for  the  very  reason  assigned 
in  Coombe's  Case.  Lord  Chief  Baron  Gilbert  (4  Bac.  Abridg.  Leases 
and  Terms  for  years,  I,  10,  140)  has  expounded  the  reasons  of  the 
doctrine  with  great  clearness  and  force;  and  it  was  fully  recognized 
in  White  v.  Cuyler,  6  T.  Rep.  176,  and  Wilks  v.  Back,  2  East.  142.  If 
it  were  necessary  it  might  easily  be  traced  back  to  an  earlier  period  than 
Coombe's  Case.  4  Bac.  Abridge.  Leases  and  Terms  for  years,  I,  10, 
140,  141 ;  Com.  Dig.  Attorney,  C,  14 ;  Moore,  70.  In  America,  it  has 
been  repeatedly  the  subject  of  adjudication,  and  has  received  a  judicial 
sanction.  The  cases  of  Bogart  v.  De  Bussy,  6  Johns.  94,  Fowler  v. 
Shearer,  7  Mass.  14,  and  Elwell  v.  Shaw,  16  :\Iass.  42,  8  Am.  Dec. 
126,  are  directly  in  point. 

It  appears  to  us,  then,  upon  the  grounds  of  these  authorities,  that 
the  deed  of  relinquishment  to  the  state  was  inoperative ;  and  conse- 
quently the  court  erred  in  refusing  the  instruction  prayed  by  the  plain- 
tiff, that  it  did  not  bind  him;  and  in  directing  the  jury,  that  if  the  ex- 
ecution of  it  was  proved,  it  was  a  bar  to  the  recovery  oi  the  land  de- 
scribed therein.     *     *     *     Reversed. 


SECTION  3.— SIMPLE  CONTRACTS 


WILEY  V.  SHANK. 

(SiiiinMiio  r.)iirt  of  Iiii!i!iiiii.  ls.'!7.     4   r.l:ifkf.  420.) 

A  contract  by  which  two  persons  by  name,  describing  themselves 
as  trustees  of  a  certain  school  district,  agree  that  the  "trustees"  shall 
pay  a  teacher  a  certain  sum  for  his  services,  and  which  is  executed 
by  those  persons  in  their  own  names,  is  binding  upun  them  individ- 
ually. 


•450  '    i-nte  AUTn^pd'^sr  (Part  2 


/^ 


;  ' 


In  a  justice's  court,  an  article  of  ffigrccment  between  the  parties, 
rontaining  conditions  pra^de^it  ip  lpG!r),KM;fo,nj;ed,by  the  plaiaiti|T,  may 
he  filed  as  the  cause  of  action,- \viihout  an  averment  of  performance 


of  the  conditions.  /  . 


U^. 


FRAMBACH  v.  FRANK. 
(Supreme  Court  of  Colorado,  1005.    33  Colo.  529,  81  Pac.  247.) 

Action  on  a  contract  signed  by  the  agent,  Frambach,  by  which  he, 
acting  for  himself  and  for  the  Cripple  Creek  Beam  Milling  Company, 
agrees  to  certain  terms  about  the  purchase  of  a  mill,  and,  in  case  of 
purchase,  to  the  issue  to  Frank  of  a  one-fourth  interest  in  the  mill. 
Frambach  purchased  the  mill  for  the  company,  and  on  this  action 
by  Frank  judgment  was  rendered  for  plaintiff  for  $13,000. 

GoDDARD,  J.  We  think  it  satisfactorily  appears  from  the  evidence 
that  the  appellant  was  the  authorized  agent  of  the  company,  and  acted 
as  such  agent  in  the  purchase  of  the  mill.  The  question  to  be  deter- 
mined, therefore,  is  whether  this  agreement,  by  its  terms,  imposes  a 
personal  obligation  upon  the  appellant  to  pay  the  amount  agreed  to  be 
paid  the  appellee,  notwithstanding  the  property  was  so  purchased.  In 
other  words,  does  the  language  used  in  the  agreement,  when  construed 
in  the  light  of  the  surrounding  circumstances,  ex  vi  termini,  bind  the 
appellant,  or  does  it  obligate  the  company  only  to  pay  to  the  appellee 
the  consideration  mentioned  ? 

It  is  well  settled  that  an  agent  may  bind  his  principal  by  a  written 
contract  not  under  seal  without  executing  the  same  in  the  name  of 
the  principal,  if,  from  the  whole  instrument,  it  may  be  gathered  that 
he  either  acts  as  agent  or  intends  to  bind  his  principal.  In  such  case, 
although  he  executes  the  instrument  in  his  own  name  he  will  not  be 
personally  bound  unless  the  language  shows  a  clear  intent  to  the  con- 
trary; and  the  presumption  is  that  an  apparent  agent  intends  to  bind 
his  principal,  and  not  himself.  In  Story  on  Agency  (9th  Ed.)  §  160a, 
the  rule  in  respect  to  written  contracts  not  under  seal  is  stated  as  fol- 
lows :  "It  is  very  clear  from  the  authorities  that  it  is  not  indispensa- 
ble, in  order  to  bind  the  principal,  that  such  a  contract  should  be  exe- 
cuted in  the  name  and  as  the  act  of  the  principal.  It  will  be  suffi- 
cient if,  upon  the  whole  instrument,  it  can  be  gathered  from  the  terms 
thereof  that  the  party  describes  himself  and  acts  as  agent,  and  in- 
tends thereby  to  bind  the  principal,  and  not  to  bind  himself."  In  gen- 
eral when  a  person  acts  and  contracts  avowedly  as  the  agent  of  an- 
other, who  is  known  as  the  principal,  his  acts  and  contracts,  within 
the  scope  of  his  authority,  are  considered  the  acts  and  contracts  of 
the  principal  and  involve  no  personal  liability  on  the  part  of  the  agent. 
1  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  1119;  Whitney  v.  Wyman,  101 
U.  S.  392,  25  L.  Ed.  1050;  Smith  v.  Alexander,  31  Mo.  193;  Rathbon 
v.  Budlong,  15  Johns.  1;   Hall  v.  Huntoon,  17  Vt.  244,  44  Am.  Dec. 


Ch.  3)  EXECl'TION    OF    THE    ALTHOKITY  457 

ZZ2;  3  Clark  &  Marshall  on  Corps,  p.  1860,  §  615a;  Magill  v.  Hins- 
dale, 6  Conn.  465,  16  Am.  Dec.  70." 

It  appears  from  the  face  of  the  agreement  under  consideration  that 
it  was  contemplated  and  understood  by  the  appellant  and  appellee 
that  the  former  might  act  in  one  of  two  capacities  in  purchasing  the 
mill — personally  in  his  own  behalf,  or  as  agent  of  the  Cripple  Creek 
Beam  Milling  Company — and  only  in  the  event  he  should  act  in  the 
representative  capacity  was  the  appellee  entitled  to  the  compensation 
sued  for.  Eliminating  that  part  of  the  agreement  which  refers  to 
the  obligations  of  the  appellant  in  the  event  that  he  should  elect  to 
purchase  the  mill  for  himself,  there  remains  a  complete  agreement  in 
which  there  is  a  full  disclosure  of  the  name  of  his  principal,  and  the 
fact  that  appellant  was  acting  as  the  agent  of  such  principal,  thus 
showing  the  capacity  in  which  the  promise  was  made,  and  who  was 
intended  to  be  bound  thereby. 

We  think,  therefore,  that,  when  tested  by  the  foregoing  rule,  the 
agreement  clearly  evidences  the  obligation  of  the  company,  and  exon- 
erates the  appellant  from  any  personal  liability  thereunder,  and  the 
court  below  erred  in  rendering  judgment  against  him.  In  this  view 
of  the  instrument,  it  becomes  unnecessary  to  notice  the  objection  urged 
against  its  validity,  as  the  judgment  must  be  reversed  for  the  rea- 
sons given. 

Reversed. 


L/-- 


CITY  OF  DETROIT  v.  JACKSON. 
(Supreme  Court  of  Michigan,  1843.     1  Doug.  106.) 

Error  on  certiorari  from  Wayne  circuit  court.    Upon  an  agreement 
for  a  submission  to  arbitration  a  ji/dgment  upon  the  award  for  $2,204  , 
had  been  entered  against  the  city.    jA.mong  other  errors  it  was  assigned 
that  the  submission  to  arbitration  ^A-as  not  duly  executed  by  the  city. 

Felch,  jo  *  *  *  2.  It  is  contended  that,  admitting  the  au- 
thority of  Zina  Pitcher  to  enter  into  the  submission  on  behalf  of  the 
plaintiffs  in  error,  he  has  not  so  executed  the  agreement  for  submis- 
sion, as  to  bind  his  principals.  "The  mayor,  recorder,  aldermen  and 
freemen  of  the  city  of  Detroit,  by  Zina  IMtchcr,  mayor  of  said  city, 

6  When  the  agent  signs  in  the  name  of  his  principal,  the  latter  only  Is  liable 
on  the  contract.  To  admit  parol  evidence  to  .show  it  was  intended  to  be  the 
nuent's  contraet  would  be  to  coiit liidict  tlu'  writing,  wliieli  is  not  allowable 
HefTron  v.  Pollard,  T.i  Tex.  OC.  11  S.  W.  IC.'..  in  .\in.  St.  Kep.  TCI  (iss!)). 

rnless  there  are  in  the  contract  apt  words  to  bind  the  agiMit,  be  will  not 
be  liable  on  tbe  eontriuf,  Jenkins  v.  Ihiteblnson,  V,\  Q.  R  711.  <!<!  E.  C.  L. 
74.^  (IRin);  Dgden  v.  Itjiyniond.  22  Conn.  ."'.TD.  HS  Am.  Dec.  4'jn  (is.-..",);  .Tobn 
Hon  V.  Welfh,  I'J  \V.  Va.  is,  24  S.  E.  r>s.'>  (IsiMi) ;  the  more  no  If  he  be  a  pnlijif 
agent  whose  aufborlty  is  publbly  known,  .M<Ciirdy  v.  Rogers,  L'l  WLs.  VM,  t)l 
Am.  Dec.  4ns  (istiC). 

«  Tart  of  the  opinion  is  omitted. 


m1^ 


458  Till':  ArTiioKri'Y  (Tart  2 

and  aj:^oiit  for  that  puriniso  duly  appoiulcd."  is  the  description  of  the 
contracting  party  in  the  body  iii  the  ai^reenient  ;  and  the  justice's  cer- 
titicate  of  its  acknowledgment  descril)es  tlic  party  aj^pearing  before 
liini  in  precisely  the  same  words.  Hut  the  agreement  is  signed  "Zina 
Pitcher,  Mayor  of  Detroit."  without  any  other  addition  ;  and  it  is  con- 
tended that  a  disclosure  of  the  agency  should  have  been  made  by  an 
addition  to  the  signature,  as  well  as  by  description  in  the  body  of 
the  instrument. 

t  is  perfectly  competent  for  an  agent,  wlio  has  due  authority  to 
contract  on  behalf  of  his  principal,  so  to  execute  an  instrument,  as 
to  make  himself  personally  responsible  for  his  principal.  Thus,  in 
Stone  V.  \\'ood,  7  Cow.  453,  17  Am.  Dec.  529,  the  defendant  described 
himself  in  the  charter  party  on  which  the  suit  was  brought,  as  agent 
for  J-  &  R-  Raymond,  but  in  fact  agreed  for  himself,  his  executors 
and  administrators,  to  pay  the  freight  therein  mentioned,  and  was 
held  to  be  bound  personally.  In  Spencer  v.  Field,  10  Wend.  87,  the 
contract  was  made  between  the  defendant  and  "James  Hillhouse,  com- 
missioner of  the  school  fund  for  the  state  of  Connecticut,  for  and 
in  behalf  of  said  state,"  was  under  seal,  and  was  signed  "James  Hill- 
house,  Commissioner  of  the  School  Fund."  It  was  held  that  it  was 
not  the  contract  of  the  state.  In  Pcntz  v.  Stanton,  10  Wend.  271,  25 
Am.  Dec.  558,  the  plaintiff  declared  on  a  bill  of  exchange,  drawn  by, 
and  signed  "H.  T.  West,  Agent."  The  suit  was  against  the  principal, 
who  was  held  not  to  be  bound,  his  name  not  appearing  on  the  bill. 
Taft  V.  Brewster  and  others,  was  upon  a  bond,  in  which  the  de- 
fendants, by  the  name  and  description  of  "Jacob  Brewster,  Thaddeus 
Loomis  and  Joseph  Coats,  trustees  of  the  Baptist  Society  of  the  town 
of  Richfield,  acknowledged  themselves  to  be  held  and  firmly  bound," 
&c.  The  same  description  was  added  to  their  signatures.  It  was  held 
to  be  their  individual  bond,  and  not  that  of  the  Baptist  Society.  See, 
also,  White  v.  Skinner,  13  Johns.  307,  7  Am.  Dec.  381 ;  Tippets  v. 
Walker,  4  Mass.  595. 

In  these  and  numerous  other  cases  of  the  same  class,  the  Court 
have  simply  looked  to  the  form  of  the  instrument  itself,  in  order  to 
ascertain  wdiether  it  is  the  contract  of  the  principal,  or  of  the  agent 
personally.  If,  by  the  terms  of  the  agreement,  a  party  describing  him- 
self as  agent,  undertakes  to  do  certain  things,  the  mere  addition  of 
the  word  agent,  or  indeed  any  other  designation  which  he  may  add 
to  his  name,  will  not  make  it  the  contract  of  his  principal.  Such  ad- 
dition will  be  regarded  as  mere  description ;  and  will  not  have  the  ef- 
fect of  bindingj  a  third  person,  who  is  not,  in  form,  made  a  party  tK 
the  instrument!  It  is  not  enough  that  the  person  executing  an  instru-\ 
ment  have  po\^r  as  agent  to  bind  a  third  person ;  he  must,  in  fact,  | 
make  it  the  obligation  of  that  person  in  terms,  in  order  to  bind  him.    1 

But  in  deternrining  whether  an  instrument,  executed  by  an  agent,  / 
contains  the  obligation  of  the  principal,  we  are  to  look  to  the  whole 


Ch.  3)  EXECUTION  OF  THE  AUTHORITY  459 

instrument.^  The  particular  form  of  execution  is  not  material,  if 
it  be  substantially  done  in  the  name  of  the  principal.  Magill  v.  Hins- 
dale, 6  Conn.  464,  16  Am.  Dec.  70 ;  Pentz  v.  Stanton,  10  Wend.  275, 
25  Am.  Dec.  558.  In  this  case,  the  plaintiffs  in  error  are  fuU}^  de- 
scribed in  the  body  of  the  agreement  for  submission,  as  the  contract- 
ing party.  The  submission  is  directly  asserted  to  be  theirs ;  the  name 
of  the  agent  is  given,  as  the  instrument,  through  whom  the  act  is 
done.  The  agent  does  not  purport  to  act  for,  or  in  any  manner  to 
bind  himself,  personally.  On  the  contrary,  the  body  of  the  instru- 
ment fully  shows,  that  he  is  the  mere  agent,  and  that  the  submission 
is  the  submission  of  the  plaintiffs  in  error.  It  is  in  the  precise  form 
given  in  Spencer  v.  Field,  10  Wend.  87,  as  the  proper  form  of  draw- 
ing an  instrument,  to  be  executed  by  an  agent,  so  as  to  bind  his  prin- 
cipal. It  is  signed  "Zina  Pitcher,  Mayor  of  Detroit."  Were  there 
nothing  in  the  body  of  the  instrument,  which  clearly  showed  who  was 
the  contracting  party,  it  would  not  certainly  bind  the  plaintiff's  in 
error.  But  here,  the  capacity  in  which  Pitcher  acted,  is  fully  ex- 
plained. No  part  of  the  instrument  shows  that  he  makes  any  contract 
individually ;  but  the  whole  of  it  shows  that  he  acts  as  the  agent  for 
the  plaintiffs  in  error,  and  to  have  added  or  prefixed  their  name  to 
liis  signature,  would  have  been  but  to  repeat,  in  the  same  instrument. 
What  already  suftkiently  appeared. 

\lt  is  true  ther«  are  cases  which  appear  to  establish  the  doctrine, 
th\l  the  name  of  Hie  principal  must  be  signed  to  an  instrument  exe- 
cuted by  an  agent.  \  But  in  th/  case  of  New  England  Marine  Insur- 
ance Co.  V.  De  Wolf,  8  Pick.  36,  Parker,  C.  J.,  in  dclWering  the  opin-|' 
ion  of  the  Court,  reniarks,  thai  "the  authorities  cited  lo  maintain  thisfL 
position,  are  of  deeds  only ;  inWruments  under  seal. '7  No  doubt  this 
is  the  rule  in  regard  to  sealed  iV^struments.  Not  onW  must  the  prin- 
cipal's name  be  signed  to  them,  but  his  seal  mu^  be  affixed  also. 
White  v.  Cuyler,  6  T.  R.  176;  Wilkes  v.  Back,  2  E/hst,  142;  Simonds 
v.  Catlin,  2  Caines,  66;  Elwell  v.  Shaw,  16  Mass.  42,  8  Am.  Dec. 
126;  Combe's  Case,  9  Co.  76b;  Frontin  v.  Small,  2  Ld.  Raym.  1418; 
Fowler  v.  Shearer,  7  Mass.   14;    Slinchficld  v.  Utile,   1   Grcenl.  231, 

7  Tlio  rl«i(l  rule  as  to  deeds  should  not  lie  extouded  to  uiercautUc  trausac- 
tlons.  New  KuKland  Marinr-  Ins.  Vo.  v.  Do  Wolf,  H  IMek.  oC.  (isi:;)).  In  the 
ra.se  of  iustruiiieiits  not  under  si-al  the  courts  will  look  to  the  liistr\nnent  to 
learn  what  tlie  intention  is.  Andrews  v.  Kstes.  II  Me.  L'C.7,  liCi  .\ni.  1  >ee.  f)'.'! 
(l.s:U).  This  lias  i.een  well  expressed  in  Whitney  v.  Wynian,  KM  U.  S.  :!!)_'. 
:'.'t5  2r>  L  Kd  KfoO  (l.S7!»).  aijproved  in  Sun  I'rinlin^'  &  I'lihlishinj,'  .\ss"n  v. 
.Moore.  is:{  U.  S.  Olli.  *JL'  S>ip.  Ct.  *J10,  Hi  K.  Kd.  .'!<•.(;  (I'.Hrj):  "The  M'i«'sllon  is 
always  one  of  intent;  ami  the  court  iiein;:  untianniieled  hy  any  oilier  eon- 
.-achTatir.n  is  hound  to  Kive  it  elTect.  .Vs  the  nu'anln;,'  of  the  lawmaker  is  the 
law  so  the  ineanini,'  of  the  contraetinn  parties  is  the  a;.'reeinent.  Words  are 
inereiv  the  synihois  they  employ  to  manifest  tlielr  purpose  that  it  may  he 
carried  into  exe<'Ution.  If  the  contract  lie  unsealed  and  the  meaning  clear, 
it  matters  not  how  It  is  phrased  nor  how  it  Is  signed,  whether  hy  the  a«ent 
for  the  iirinclpal.  or  with  the  name  <.f  the  jtrincipal  hy  the  au'ent,  or  other- 
wise. The  inH'iit  developed  Is  aloiu'  material,  and  when  that  is  ascertained 
it  Is  conclusive." 


4i;0  THio  AUTiiOKiTY  (Part  2 

10  Am.  Doc.  65.  Whorejliowovor,  the  instrument  is  not  under  seal, 
a  different  rule  prevails.  I  In  such  cases,  it  is  enough  if  the  contract 
is  made  in  the  name  of  til;  principal,  and  as  his  contract,  through  the 
agent,  and  the  signature  oV  the  agent  is  made  to  the  instrument  pur- 
porting to  charge  his  principal.  In  New  England  "Marine  Insurance 
Co.  V.  De  Wolf,  hefore  cited,  the  declaration  was  upon  a  guaranty 
endorsed  on  the  back  of  a  note,  given  for  a  premium  on  insurance, 
as  follows:  "By  authority  of  J.  De  Wolf,  Junior,  in  a  letter  dated 
September  24,  1824,  I  hereby  guaranty  his  payment  of  the  premium 
or  policy  No.  10,079.  Isaac  Clap."  It  was  held  that  the  defendant 
was  bound  as  guarantor  of  the  notes;  Clap,  the  agent,  having  author- 
ity to  sign  for  his  principal,  and  his  intention  to  do  so,  being  evident 
from  the  warranty  itself. 

A  familiar  instance  of  the  manner  of  executing  a  contract  by  an 
agent,  is  found  in  the  case  of  bank  bills.  They  are,  upon  their  face, 
the  promises  of  the  corporation  by  which  they~  were  issued ;  but  they 
are  signed  by  the  president  and  cashier,  with  an  abbreviation  showing 
only  the  capacity  in  which  they  sign.  It  has  never  been  contended, 
that,  because  these  agents  did  not  add  to  their  signatures  the  name 
of  the  corporation,  they  were  personally  bound,  and  not  the  corpo- 
ration. Even  where  a  check  was  drawn  by  the  cashier  of  a  bank, 
and  it  appeared  doubtful  whether  it  was  an  official  or  a  private  act, 
parol  evidence  has  been  admitted  to  show  that  it  was  an  official  act, 
for  the  purpose  of  making  the  bank  responsible.  Mechanics'  Bank 
v.  Bank  of  Columbia,  5  Wheat.  326,  5  L.  Ed.  100 ;  Story  on  Agency, 
268,  note. 

We  entertain  no  doubt  as  to  what  is  the  proper  construction  of  the 
agreement  for  submission  in  this  case.  We  think  the  plaintiffs  in 
error  must  be  regarded  as  one  of  the  contracting  parties,  although 
their  agent  has  signed  his  own  name  to  it,  without  adding  the  name 
of   his  principals.     *     *     * 


M' 


SECTION  4.— NEGOTIABLE  INSTRUMENTS   y 


MERCHANTS'  BANK  OF  MACON  v.  CENTRAL  BANK  OF 

GEORGIA. 

(Supreme  Court  of  Georgia,  1846.     1  Ga.  418,  44  Am.  Dec.  665.) 

Action  upon  a  bill  of  exchange,  which  requested  the  Fulton  Bank 
of  New  York  to  pay  Scott  Cray,  agent,  or  order,  $5,000.  The  bill 
was  endorsed  by  "Scott  Cray,  Agent,"  and  was  protested  in  New 
York,  and  notice  of  protest  was  given.  The  principal  was  not  dis- 
closed, but  was  afterwards  shown  to  be  the  plaintiff  in  error,  defend- 


Ch.  3)  EXECUTION  OF  THE  AUTHORITY  4G1 

ant  below.  On  the  trial  the  agency  of  Scott  Cray  was  proven  by  the 
books  of  the  bankX^rror  was  alleged  upon  various  grounds,  chiefly 
because  the  bill  did  nbt  bind  the  bank,  as  its  name  nowhere  appeared 
upon  the  instrument.  1 

NiSBET,  J. 8  Ther^  are  two  counts  in  the  plaintiff's  writ:  One 
founded  on  the  bill  t>f  exchange,  the  other  for  money  had  and  re- 
ceived. The  testimony  proves  that  the  bill  was  discounted  by  the 
Central  Bank,  at  the  instance  of  Scott  Cray,  for  the  Bank  of  Haw- 
kinsville ;  that  the  money  was  paid  to  him,  and  deposited  in  the 
agency  of  the  Hawkinsville  Bank  at  Macon,  to  the  credit  of  Jerry 
Cowles,  the  drawer;  and  that  two-thirds  of  it  was  applied  in  ex- 
tinguishment of  a  debt  due  by  him  to  the  Hawkitlsville  Bank;  the 
balance,  Mr.  Cowles  was  permitted  to  check  out.  Under  this  state 
of  facts,  if  it  is  conceded  that  the  Merchants'  Bank  of  Macon  is  not 
liable  to  pay  this  bill,  upon  the  endorsement  of  Sccttt  Cray,  yet  it  is, 
in  our  opinion,  liable  upon  the  common  count,  upon  principles  ex 
jaequo  et  bono. 

If  a  person,  assuming  to  act  as  the  agent  of  a  corporation,  but 
Without  legal  authority,  makes  a  contract,  and  the  corporation  re- 
ceive the  benefit  of  it,  and  use  the  property  acquired  under  it,  such 
acts  will  ratify  the  contract,  and  render  the  corporation  liable  there- 
on. Angell  and  Ames  (2d  Ed.)  178;  Utica  Ins.  Co.  v.  Kip,  8  Cow. 
25 ;  Story  on  Agency,  §  162 ;  Episcopal  Charitable  Society  v.  Epis- 
copal Church  in  Dedham,  1  Pick.  372;  Bank  of  Columbia  v.  Patter- 
son, 7  Cranch,  299,  3  L.  Ed.  351;  Randall  v.  Van  Vechten,  19 
Johns/  60,  10  Am.  Dec.  193 ;  Utica  Ins.  Co.  v.  Bloodgood,  4  Wend. 
654;  Mechanics'  Bank  v.  Bank  of  Columbia,  5  Wheat.  334,  5  L.  Ed. 
100.  It  is  contended  by  the  plaintiff  in  error,  that  an  act  of  an  agent, 
to  be^binding  upon  his  principal,  must  be  done  in  the  name  of  the 
principal ;  and,  inasmuch  as  the  name  of  the  principal  does  nowhere 
appear  on  this  bill,  it  cannot  be  evidence  to  charge  the  principal,  the 
Merchants'  Bank  of  Macon,  formerly  the  Bank  of  Hawkinsville. 
The  bill  is  payable  to  the  order  of  Scott  Cray,  agent;  drawn  by  J. 
Cowles,  upon  the  cashier  of  the  Fulton  Bank,  New  York;  accept- 
ance waived,  and  endorsed  "Scott  Cray,  Agent." 

The  inference  drawn  from  the  paper  is,  that  Scott  Cray  acted  as 
agent  for  some  person,  or  corporation,  but  who,  or  what,  does  not 
appear.  The  name  of  his  principal  does  not  appear.  The  general 
rule  is  this :  in  order  to  bind  a  principal,  on  a  contract  made  by  an 
agent,  it  must  jmrport,  on  its  face,  to  be  liic  contract  of  the  prin- 
cipal; and  his  name  must  be  inserted  in  it,  and  signed  to  it  It  is 
not  enough  that  the  agent  be  described  as  such  in  the  instrunicnl. 
Story  on  Agency,  §  147 ;  Paley  on  Agency,  by  Lloyd,  180,  181,  182 ; 
2  Kent,  629,  3d  edition. 

"  r.'irt  of  tho  oiiinlon  Is  omitted. 


Hl'J  Till-;  AiriioitrrY  (Part  2 

This  rule  applies,  more  iiarticnlarly.  to  soleinn  iustnuiKMits  under 
seal ;  and  as  to  them,  to  use  the  lanj^uaji^e  of  Judge  Story,  it  is  "regu- 
larly true,"  but  not  universally  true  in  all  its  extent.  For,  so  far  as 
regards  instruments  imder  seal,  there  are  some  exeei)lions  to  some 
of  the  requirements  of  the  rule.  Although  the  rule  is  thus  strict  as 
to  sealed  instruments,  yet  a  more  liberal  rule  obtains  as  to  unsolemn 
instruments,  especially  commercial  and  maritime  contracts.  In  such 
cases,  in  furtherance  of  the  public  policy  of  encouraging  trade,  if  it 
can,  upon  the  whole  instrmneiU.  l)e  collected,  that  the  true  object 
and  intent  of  it  are.  to  bind  the  princii)al,  and  not  merely  the  agent, 
courts  of  justice  will  ^dopt  that  construction  of  it,  however  informally 
it  may  be  expressed./  Story  on  Agency,  §  154.  This  is  a  commercial 
contract,  not  under  seal,  and  comes  under  the  ijule  last  laid  down. 
If  an  agent,  in  a  parol  contract,  intends  to  bind  ms  principal,  and  ap- 
pears to  act  as  agent,  the  principal  is  bound.  /Wheaton's  Selwyn, 
S23,  note  5,  Am.  Ed.;  Andrews  v.  Estes,  2  Fa?rf.  (11  Me.)  267,  26 
Am.  Dec.  521;  New  England  Ins.  Co.  v.  De  Wolf,  8  Pick.  56; 
Angell  and  Ames,  235-237. 

It  may  be  stated  generally,  that  where  it  appears  from  the  face 
of  the  paper,  that  the  credit  is  not  given  to  the  agent,  and  the  name 
of  principal  is  disclosed  at  the  time  of  the  transaction,  and  the  act 
•  is  within  the  powers  of  the  agent,  the  principal  is  bound.  The  ques- 
tion whether  the  agent  is  bound,  does  not  affect  this  question,  for 
there  are  many  cases  where  both  principal  and  agent  are  bound. 
Xow,  it  is  apparent  on  this  bill  of  exchange,  that  it  was  the  intent 
of  the  parties  to  bind  Scott  Cray's  principal :  else  why  make  it  oay- 
able  to  him  as  agent,  and  why  take  his  endorsement  as  agent  ^  It 
is  still  more  manifest  that  he  does  appear  to  act  as  agent.  Th/£  tes- 
timony upon  the  trial,  too,  is,  that  the  name  of  his  principal  wis  dis- 
closed to  the  Central  Bank  at  the  time  the  bill  was  discounted.  We 
hold,  too,  that  upon  parol  contract,  where  the  intent  is  not  suffi- 
ciently clear  that  the  prmcipal  is  to  be  bound,  the  defect  can  be  sup- 
plied by  parol  testimony.!  A  party  cannot  be  discharged,  who  is  ap- 
parently liable  on  the  cohtract,  but  a  new  party  may  be  introduced 
by  parol.  Ang.  and  Ames,  236,  237;  Mechanics'  Bank  v.  Bank  of 
Columbia,  5  Wheat.  326;  5  L.  Ed.  100;  Mott  v.  Hicks,  1  Cow.  536, 
13  Am.  Dec.  550;  Emerson  v.  Providence  Hat  Mfg.  Co.,  12  Mass. 
240,  7  Am.  Dec.  66;  Hodgson  v.  Dexter,  1  Cranch,  345,  2  L.  Ed. 
130;  6  Adolphus  &  Ellis,  486;  8  Meeson  &  Welsby  (Excheq.)  440. 
See,  also,  Story  on  Agency,  190,  191,  334-336.® 

The  testimony  on  the  trial  shows  that  it  was  the  intent  of  the 
parties  to  bind  the  Bank  of  Hawkinsville  by  this  endorsement. 
*     *     *     Affirmed. 

'•>  A  discriminating  review  of  the  cases  is  jriven  in  Forsyth  v.  Day,  41  Me. 
382  (ISfjO),  ante.  p.  70,  and  a  still  more  extensive  one  may  be  found  in  Shu'y 
V.  Adair,  IS  V,'::sli.  ISS,  51  I'ae.  ;J88,  39  L.  K.  A.  473,  (J3  Am.  St.  Kei>.  .S70  (Is'.iT). 


Ch  3)  EXECUTION  OF  THE  AUTHORITY  4G3 

PRATT  V.  BEAUPRE. 
(Supreme  Court  of  Minnesota,  1868.     13  Minn.  IS"  [Gil.  177].) 

McMillan,  J.  This  action  is  brought  by  the  plaintiff  to  recover 
damages  for  an  alleged  breach  of  a  contract  to  transport  and  deliver 
certain  flour.     The  contract  is  in  the  following  words : 

"St.  Paul,  May  6,  1863. 

"We,  Temple  &  Beaupre,  of  St.  Paul,  Ramsey  county,  IMinnesota, 
for  the  consideration  of  $25  to  us  in  hand  paid,  the  receipt  whereof  is 
hereby  acknowledged,  have  bargained,  agreed,  and  contracted  with 
B.  F.  Pratt,  of  St.  Peter,  to  receive  at  his  mill  in  St.  Peter,  county 
of  Nicollet,  state  aforesaid,  one  thousand  and  four  hundred  barrels 
(1,400)  of  flour,  and  transport  the  same  and  deliver  to  Capt.  M.  P. 
Small,  commissary  of  subsistence  for  the  United  States,  on  the  levee 
in  St.  Paul,  at  such  time  as  he,  the  said  Small,  shall  direct,  for  the 
sum  of  25  cents  for  each  barrel  so  transported  and  delivered  in  good 
order.     [Signed]  Temple    &   Beaupre, 

"Agents  Steamer  Flora. 

"B.  F.  Pratt." 

The  words,  "agents  steamer  Flora,"  attached  ,to  the  signature  of 
Temple  &  Beaupre,  are  descriptio  personarum/  The  rule  is,  that 
when  words  which  may  be  either  descriptive  of  ^he  person,  or  indic- 
ative of  the  character  in  which  a  person  contracts,  are  affixed  to  the 
name  of  a  coVitracting  party,  prima  facie  they  are  descriptive  of  the 
person  only;  ^^  but  the  fact  that  they  were  not  intended  by  the  par- 
ties as  descripiive  of  the  person,  but  were  understood  as  determining 
the  character  in  which  the  party  contracted  may  be  shown  by  ex- 
trinsic evidence,  but  the  burden  of  proof  rests  upon  tii>»  party  seeking 
•to  change  the  prima  facie  character  of  the  contract.  J  And  when  a 

10  A  sifrnatino,  "D.  II.,  Apont  for  the  Churchman,"  has  /een  held  to  in- 
dicate i>nil):iMv.'iiicr(>lv  a  incnioranduiii  to  show  from  \Ahat'fun(l  the  note  so 
sifrluMl'  sh.uild  "lie  liai<i  and  to  Itiiid  tlie  a^cnt  personally  to  pay  the  note. 
De  Witt  V.  Walton,  '.)  N.  Y.  .j71,  Seld.  Notes,  li.".:;  (isr)4).  See  extended  discus- 
sion  in   Knippeuberg  v.   Greenwood   Mining  Co.,  \Vd   Mont.   11,    H»l    I'ae.   159 

(r.»()0). 

That  it  Is  unroasr.nalile  to  treat  the  words  "agent,"  "i)rosident,  "stiperm- 
tendent,"  "manager."  as  mere  descriptive  pi-rsoiis  has  often  lieen  snggcsted. 
Whatever  may  he  tliM  custom  in  England,  in  tlie  T"nited  States  men  in  sign- 
ing l.u'^iness  instruments  are  not  woiii  tlnis  to  designate  tlieir  ranlc  or  cali- 
'ng  and  wlien  .sudi  terms  are  used  it  is  Idghly  artilicial,  and  rarely,  if  ever, 
in  jKcord  with  tlie  facts,  to  regard  them  as  descriiitive  of  the  person.  'I'liev 
are  always  int.-nd<'d  as  descriptive  of  tlie  cai.a<ity  in  which  lie  acts,  and  i! 
on  the  i)aper  aiivthing  appears  to  show  who  this  prlncii.al  is  it  .seems  al.surd 
not  to  give  «'frect  to  this  evident  Intent.  S<'e  the  extended  discussion  in  Sec 
.  nd  Nat.  I'.anlv  v.  .Midl.-ind  Steel  Co..  ir,.-,  Ind.  .^sl.  .^,s  N.  K.  s.".."..  r.-_>  I..  K.  A. 
;;(»7  (P.IOO);  Sayre  v.  Nichols.  7  Cal.  r.:'..^  (IS  Am.  Dec  liso  (is:.7);  Geiler  v. 
Stuart  1  .Mont'  172  ns7<i).  The  great  weight  of  authority  is.  liowe\er.  the 
other  wav,  thou'-di  with  nmch  .uiiilicl.  Avery  v.  Uougherly,  KHi  Ind.  Ii:'..  li 
.\.  10.  \'£\,  nii  Am.  Hep.  •'SO  (1>^''"').  Tor  what  .Mr.  Juslicf  Lamar  i-atls  tlie 
"ananhy  of  "the  authorities."  see  the  valiiahle  review  In  I'alk  v.  .Mu.-bs,  ll^T 
r.  s.  .-.'..7,  s  Slip.  ct.  i:!ii).  '.\'i  L.  VA.  'im  (isss). 


11)1:  TiiK  AiriiOKiTY  (Part  2 

party  who  thus  socks  to  change  the  prima  facie  character  of  the  con- 
tract, seeks  to  do  so  on  the  ground  of  agency  in  making  the  con- 
tract, the  fact  of  his  agency  must  be  estabhshod,  for  if  he  acted  as 
an  agent  without  authority  he  is  personally  liable. 

On  the  trial  of  this  cause  the  only  evidence  was  the  deposition  on 
the  part  of  the  plaintiff.  The  defendant  offered  no  evidence.  There 
is  no  evidence  to  establish  the  fact  of  the  agency  of  Temple  & 
Beaupre.  In  the  absence  of  evidence  to  prove  that  fact,  those  por- 
tions of  the  deposition  of  the  plaintifif  indicated  by  the  letters  A,  B, 
C,  respectively,  although  untler  other  circumstances  they  might  be 
competent  as  evidence  tending  to  show  that  the  plaintiff  contracted 
with  them  as  agents,  are  not  material.  They  were  therefore  properly 
stricken  out.  This  determines  the  only  point  raised  by  the  appel- 
lant's counsel. 

The  judgment  below  is  affirmed. 


SECTION  5.— PAROL  EVIDENCE  TO  EXPLAIN 


HIGGINS  V.  SENIOR.^^ 
(Court  of  Exchequer,  1841.    8  Mees.  &  W.  834.) 

Special  assumpsit  for  compensation  for  the  non-delivery  of  iron. 
Defendant  claimed  he  contracted  only  as  agent. 

Parke,  B.  The  question  in  this  case,  which  was  argued  before 
us  (Parke,  Alderson,  Gurney,  and  Rolfe,  BB.)  in  the  course  of 
the  last  term,  may  be  stated  to  be,  whether  in  an  action  on  an  agree- 
ment in  writing,  purporting  on  the  face  of  it  to  be  made  by  the  de- 
fendant, and  subscribed  by  him,  for  the  sale  and  delivery  by  him  of 
goods  above  the  value  of  £10,  it  is  competent  for  the  defendant  to  dis- 
charge himself,  on  an  issue  on  the  plea  of  non  assumpsit,  by  proving 
that  the  agreement  was  really  made  by  him  by  the  authority  of  and 
as  agent  for  a  third  person,  and  that  the  plaintiff  knew  those  facts,  at 
the  time  when  the  agreement  was  made  and  signed.  Upon  considera- 
tion, we  think  that  it  was  not :  and  that  the  rule  for  a  new  trial  must 
be  discharged. 

There  is  no  doubt,  that  where  such  an  agreement  is  made,  it  is 
competent  to  show  that  one  or  both  of  the  contracting  parties  were 

iiAcrord:  Darrow  v.  Home  Produce  Co.  (C.  C.)  57  Fed.  463  (1893),  in 
which  I'iiker,  J..  c|uote.s  at  large  from  leading  authorities;  We.ston  v.  Mc- 
Millan. 42  Wis.  507  fl877);  So.  Pac.  Co.  v.  Von  Schmidt  Dredge  Co.,  118  Cal. 
308,  50  Pac.  050  (1807) ;  Higgins  v.  Dellinger,  22  Mo.  397  (1850).  In  Schenck 
V.  Spring  Lake  Beach  Imp.  Co.,  47  N.  J.  Eq.  44,  19  Atl.  881  (1890),  the  doctrine 
is  denied,  but  this  .seems  to  conflict  with  Borcherling  v.  Katz,  37  N.  J.  Eq. 
150  (18S3),  and  Smith  v.  Felter,  63  N.  J.  Law,  30,  42  Atl.  1053  (1899). 


Ch.  3)  EXECUTION  OF  THE  AUTHORITY  4G5 

agents  for  other  persons,  and  acted  as  such  agents  in  making  the  con- 
tract, so  as  to  give  the  benefit  of  the  contract  on  the  one  hand  to  (Gar- 
rett V.  Handley,  4  B.  &  Cr.  664;  Bateman  v.  Philhps,  15  East,  272),  and 
charge  with  habihty  on  the  other  (Paterson  v.  Gandasequi,  15  East,  62, 
post,  p.  738),  the  unnamed  principals ;  and  this,  whether  the  agreement 
be  or  be  not  required  to  be  in  writing  by  the  Statute  of  Frauds :  and 
this  evidence  in  no  way  contradicts  the  written  agreement.  It  does 
not  deny  that  it  is  binding  on  those  whom,  on  the  face  of  it,  it  purports 
to  bind ;  but  shows  that  it  also  binds  another,  by  reason  that  the  act 
of  the  agent,  in  signing  die  agreement,  in  pursuance  of  his  authority, 
is  in  law  the  act  of  the  principal. 

But,  on  the  other  hand,  to  allow  evidence  to  be  given  that  the  party 
who  appears  on  the  face  of  the  instrument  to  be  personally  a  con- 
tracting party,  is  not  such,  would  be  to  allow  parol  evidence  to  con- 
tradict the  written  agreement ;  which  cannot  be  done.  And  this  view 
of  the  law  accords  with  the  decisions,  not  merely  as  to  bills  of  exchange 
(Sowerby  v.  Butcher,  2  C.  &  M.  371;  4  Tyr.  320;  Lefevre  v.  Lloyd, 
5  Taunt.  749;  1  Marsh.  318)  signed  by  a  person,  without  stating  his 
agency  on  the  face  of  the  bill ;  but  as  to  other  written  contracts,  name- 
ly, the  cases  of  Jones  v.  Littledale,  6  Ad.  &  Ell.  486,  1  Nev.  &  A.  677, 
and  Magee  v.  Atkinson,  2  M.  &  W.  440.  It  is  true  that  the  case  of 
Jones  V.  Littledale  might  be  supported  on  the  ground  that  the  agent 
really  intended  to  contract  as  principal ;  but  Lord  Denman,  in  deliver- 
ing the  judgment  of  the  court,  lays  down  this  as  a  general  proposi- 
tion, "that  if  the  agent  contracts  in  such  a  form  as  to  make  himself 
personally  responsible,  he  cannot  afterwards,  whether  his  principal 
were  or  were  not  known  at  the  time  of  the  contract,  relieve  himself 
from  that  responsibility."  And  this  is  also  laid  down  in  Story  on 
Agency,  §  269.  Magee  v.  Atkinson  is  direct  authority,  and  cannot  be 
distinguished  from  this  case. 

The  case  of  Wilson  v.  Hart,  7  Taunt.  295,  1  Moore,  45,  which  was 
cited  on  the  other  side,  is  clearly  distinguishable.  The  contract  in 
writing  was,  on  the  face  of  it,  with  another  person  named  Read,  ap- 
pearing to  be  the  principal  buyer;  but  there  being  evidence  that  the 
defendant  fraudulently  put  forward  Read  as  the  buyer,  whom  he  knew 
to  be  insolvent,  in  order  to  pay  a  debt  from  Read  to  himself  with  the 
goods  purchased,  and  having  subsequently  got  posses.sion  of  them,  it 
was  held,  on  the  principle  of  Hill  v.  Perrott,  3  Taunt.  274,  and  other 
cases,  that  the  defenrlant  was  liable;  and  as  is  observed  by  Mr.  Smilli. 
in  the  very  able  work  to  which  we  are  referred,  (Leading  Cases,  vol. 
2,  p.  125,)  that  decision  turned  altogether  upon  the  fraud,  and  if  it 
had  not,  it  would  have  been  an  authority  for  the  admission  of  parol 
eviflence  to  charge  the  defendant  not  to  discharge  Read. 

Rule  discharged. 
lioui).rit.&  A. — oO 


y 


■Kit)  THio  Ai;rii()KirY  (Tart  2 


r..\Riu>:i'  V.  GOOirvT.K. 

(v«?vipronio  Court  of  Orouoii,   IMH"..     'JS  Dr.    IC..").  .".s  Vac.  07,  4P>  V:\c.  StS.) 

Action  on  a  contract  for  logs,  exccntod  under  seal,  b}>  G.  W.  Hand- 
saker  and  J.  C.  Gootlalc.  After  about  three-fourths  of  the  logs  had 
been  delivered  Goodale  refused  to  take  any  more,  and  liarljie  sues  to 
recover  under  the  contract  upon  parol  evidence  that  llandsaker  was 
Barbre's  agent,  and  had  signed  the  contract  in  his  name  instead  of  Bar- 
bre's  by  consent  of  defendant.  Judgment  for  plaintiff,  and  defendant 
api)eals. 

W'oLVERTON,  J.^"  *  *  *  The  question  is  here  presented 
whether  it  is  competent  to  show  by  parol  testimony  that  a  contract  ex- 
ecuted by  and  in  the  name  of  an  agent  is  the  contract  of  the  principal, 
where  the  principal  was  known  to  the  other  contracting  party  at  the 
date  of  its  execution.  There  are  two  opinions  touching  the  question 
among  American  authorities, — the  one  affirming,  and  the  other  deny- 
ing; but  the  case  is  one  of  first  impression  here,  and  we  feel  constrained 
to  adopt  the  rule  which  may  seem  the  more  compatible  with  the  pro- 
motion of  justice,  ar^d  the  exaction  of  honest  and  candid  transactions 
between  individuals. ';  The  English  authorities  are  agreed  that  parol 
evidence  is  admissit^e\t-o  show  that  a  written  contract  executed  in  the 
name  of  an  agent  i^  the  contract  of  the  principal,  whether  he  was 
known  or  unknown ;  And  the  American  authorities  are  a  unit  so  far  as 
the  rule  is  applied/lo  an  iniknown  principal,  but  disagree  where  he 
was  known  at  the'^titne  the  contract  was  executed  or  entered  into  by 
the  parties.  All  the  authorities,  both  English  and  American,  concur  in 
holding  that,  as  applied  to  such  contracts  executed  when  the  principal 
w-as  unknowji,  parol  evidence  which  shows  that  the  agent  who  made 
the  contract  in  his  own  name  was  acting  for  the  principal  does  not 
contradict  the  writing,  but  simply  explains  the  transaction ;  for  the 
effect  is  not  to  show  that  the  person  appearing  to  be  bound  is  not 
bound,  but  to  show  that  some  other  person  is  bound  also.  And  those 
authorities  which  deny  the  application  of  the  rule  where  the  principal 
was  known  do  not  assert  or  maintain  that  such  parol  testimony  tends 
to  vary  or  contradict  the  written  contract,  but  find  supj:)ort  upon  the 
doctrine  of  estoppel ;  it  being  maintained  that  a  pa^rty  thus  dealing 
with  an  agent  of  a  known  principal  elects  to  rely  solefy  upon  the  agent's 
responsibility,  and  is  therefore  estopped  to  proceed  against  the  prin- 
cipal. 

The  underlying  principle,  therefore,  upon  which  the  authorities  seem 
to  diverge,  is  the  presumption  created  by  the  execution  of  the  con- 
tract in  the  name  of  the  agent,  and  the  acceptance  thereof  by  a  party, 
where  the  principal  is  known.    Is  this  presumption  conclusive,  or  is  it 

1-'  Part  of  the  opinion  is  omitted. 


J- 


/  Ch.  3)  EXECUTION  OF  THE  AUTHORITY      /  4G7 

disputable?  Without  attempting  to  reconcile  the  decisions,^'  we  be- 
lieve the  better  rule  to  be  that  the  presumption  thus  created  is  a  dis- 
putable one.  and  that  the  intention  of  the  party  must  be  gathered  from 
his  words,  and  the  various  circumstances  which  surround  the  trans- 
action, as  its  practical  effect  is  to  promote  justice  and  fair  dealing. 
The  principal  may  have  recourse  to  the  same  doctrine  to  bind  the  party 
thus  entering  into  contract  with  his  agent.  Parol  evidence,  however, 
is  not  admissible  to  discharge  the  agent,  as  the  party  with  whom  he 
has  dealt  has  his  election  as  to  whether  he  will  hold  him  or  the  prin- 
cipal responsible.  This  doctrine  must  be  limited  to  simple  contracts, 
and  may  not  be  extended  to  negotiable  instruments  and  specialties  un- 
der seal,  as  they  constitute  an  exception  to  the  rule.  As  bearing  upon 
these  deductions,  see  1  Am.  &  Eng.  Enc.  Law,  392 ;  Briggs  v.  Partridge, 
64  N.  Y.  362,  363,  21  Am.  Rep.  617;  Nicoll  v.  Burke,  78  N.  Y.  583; 
New  Jersey  Steam  Nav.  Co.  v.  Merchants'  Bank,  6  How.  380,  12  L. 
Ed.  465;  Nash  v.  Towne,  5  Wall.  703.  18  L.  Ed.  527;  Stowell  v.  El- 
drcd,  39  Wis.  626;  Chandler  v.  Coe,  54  N.  H.  561 ;  Ford  v.  Williams, 
21  How.  289,  16  L.  Ed.  36;  Hunter  v.  Giddings,  97  ^lass.  41,  93  Am. 
Dec.  54;  Trueman  v.  Loder,  11  Adol.  &  E.  589;  Higgins  v.  Senior,  8 
Mees.  &  W.  843  ;  Calder  v.  Dobell,  L.  R.  6  C.  P.  486;  Mechem,  Ag.  §§ 
449,  698,  699.  If  an  instrument  is  valid  without  a  seal,  although  ex- 
ecuted under  seal,  it  is  to  be  treated  as  written  evidence  of  a  simple 
contract ;  and  the  seal  adds  nothing,  except,  under  our  statute,  it  is 
made  primary  evidence  of  a  consideration.  Stowell  v.  Eldred,  supra ; 
Byington  v.  Simpson,  134  Mass.  169,  45  Am.  Rep.  ^\A;  Rector,  etc., 
v.  Wood,  24  Or.  404,  34  Pac.  18,  41  Am.  St.  Rep.  860.    ) 

Xow,  looking  to  the  contract  which  is  the  basis  of  tfie  cause  of  ac- 
tion under  consideration,  we  find  that  it  was  executes  in  manner  and 
form  as  requested  by  the  defendant,  and  to  subserv^.>a  special  purpose 
peculiar  to  his  own  interest,  with  the  express  avowal  that  it  should  be 
treated  as  the  contract  of  plaintiff,  although  executed  in  the  name  of 
Handsaker,  the  agent.  It  is  further  disclosed  that  both  the  defendant 
and  the  plaintiff  afterwards  so  treated  it;  the  plaintiff  proceeding  un- 
der it,  and  in  obedience  with  the  terms  and  conditions  thereof,  in  cut- 
ting, hauling,  and  banking  the  logs  preparatory  to  delivery,  and  the 
defendant  by  making  jjayments  to  him  from  time  to  time,  sometimes 

>8  Sonic  foiirts  limit  t\w  ortprafi<pii  of  lliis  nilc  to  cisos  wlicrc  liic  |iriii(i|i;il 
WMS  undisclosed.  Ford  v.  Wllliiiiiis,  <ili  \\  S.  CJl  H«i\v.)  I'M,  1(1  1..  Va\.  -.'.r, 
(1K."|S).  post.  II.  7'Jl,  imd  ollicrs  to  coiitrMcIs  doiihiriij  upon  tiicir  fiicc,  Arni- 
t<tron«  V.  .\iidrc\vs,  !(»!>  .Mich,  r.:;?,  (IT  .\.  W.  '>i\~  (IMid).  if  tJic  con!  r.-icl  clcnrl.v 
Rtiitcs  wlio  is  llalilc  jiMPol  evidence  Is  not  iidndssilde  to  f.-isten  liiitiilitv  on  -.[u 
other.  Howell  v.  Oleson.  '.'.'2  .Minn.  'jss.  !.•()  .\.  W.  L'i'7  (issj);  Vail  v.  .\oitli- 
wcsteni  L.  Ins.  Co.,  V.)2  111.  '.CT.  CI  .\.  K.  C.-.I  (l<i(»l).  Tlie  rnic  <iin  have  no 
appliciitlon  to  a  case  In  whhh  the  anient  had  no  anlhorlt.v  to  «'ontract  for  the 
Iirincipal  and  has  contracted  In  his  own  ii.inie.  IIsIicIIm  \incvar<I  Co.  v.  r.iil- 
ler.  lli.".  Cal.  L'.'IL'.  ;"  I'ac.  t>M»  (]Si>!t). 

It  Is  not  essential  that  the  a^ent  sitrn  the  |iapcr  in  tlie  prindpars  name, 
thoufdi  of  ((nirse  he  should  do  so.  It  Is  euouuh  if  In  the  hod.v  of  the  paper  It 
appears  that  the  note  is  the  note  of  the  prineipjil.  Ilaskell  v.  Cornisli,  I".  i'mI. 
4r>  (1.S.'>0).     Tentz  v.  Stanton.  U»  Wend.  'JTI.  St  .\m.  Dec.  5r>8  (ISlili). 


4l)S  THE  ArTuouiTY  (Part  2 

ilircotly,  and  sometimes  through  TTaiulsakcr.  the  agent.  This  is  ratifi- 
cation, and  constitutes  a  very  significant  feature  of  the  inquiry.  Aside 
from  this,  the  contract  discloses  upon  its  face  that  a  part  of  the  con- 
sideration for  these  logs  moved  directly  from  defendant  to  plaintiff. 
Under  these  attendant  circumstances,  and  others  which  might  be  allud- 
ed to,  we  think  the  court  conmutted  no  error  in  admitting  the  testimony 
to  show  who  were  the  real  parties  to  the  contract,  as  well  as  to  ex- 
plain how  the  clause  touching  the  $1,700  came  to  be  placed  therein. 
The  admission  of  the  parol  evidence  touching  this  clause  may  be  up- 
held as  being  explanatory  of  the  consideration  which  in  part  supports 
the  contract.     *     *     *     Afifirmcd.  / 

^  \  / 

RICHI^IOND  LOCOMOTIVE  &  MACHINE  WORKS  v. 

MORAGNE. 

(Supreme  Court  of  Alabama,  1898.     119  Ala.  80,  24  South.  834.) 

Action  on  two  notes  signed,  "J-  ^-  Moragne,  W.  B.  Beeson,  G.  W. 
Wharton,  Board  of  Business  Managers."  Defense,  that  defendants 
were  agents  of  the  Etowah  Alliance  Manufacturing  Company,  an 
Alabama  corporation,  that  plaintiff  knew  this,  and  so  dealt  with  them 
in  selling  some  machinery  and  taking  these  notes  for  the  price.  Plain- 
tiff demurred,  the  demurrer  was  overruled,  and  plaintiff  appeals. 

McClELLAN,  J.  If  an  agent,  in  the  execution  of  a  promissory 
note,  disclose  his  principal,  make  it  appear  on  the  face  of  the  paper 
that  it  is  the  contract  of  the  principal,  and  sign  it  as  agent,  of  course 
the  principal  is  bound,  the  undertaking  being  within  the  agency ;  and 
the  agent  is  not.^*    On  the  other  hand,  if  a  principal  is  not  disclosed 

i*The  distinction  between  nesotiable  paper  and  other  simple  contracts  is 
stated,  and  extensively  illustrated,  in  Williams  v.  Robbins,  82  Mass.  (16  Gray) 
77.  77  Am.  Dec.  39G  (18t)0),  and  Bank  of  British  North  America  v.  Hooper, 
71  Mass.  (5  Gray)  5G7,  6G  Am.  Dec.  .390  (1856).  To  make  liable  on  commercial 
paper  persons  whose  names  do  not  appear  upon  it  is  alarming.  It  is  important 
for  all  parties  to  know  the  security,  and  the  parties  liable,  from  the  face  of 
the  bill.  Fenn  v.  Harrison,  37  II.  761  (1790) ;  Wheeled  Scraper  Co.  v.  Me- 
Milleu,  71  Neb.  686,  99  N.  W.  512  (1904) ;  Sydnor  v.  Hurd,  8  Tex.  98  (1852). 
Cf.  Carpenter  v.  Farnsworth,  106  Mass.  561,  8  Am.  Rep.  .360  (1871),  in  which 
the  words  "^Etna  Mills"  printed  in  the  margin  of  a  check  was  held  enough 
to  make  the  check  the  obligation  of  the  .Etna  Mills,  uiul  not  of  the  agent 
who  signed  the  check  "I.  D.  Farnsworth,  Treasurer,"  with  Casco  Nat.  Bank 
V.  Clark.  1.39  X.  Y.  310,  .34  N.  E.  908,  30  Am.  St.  Rep.  705  (IS!):',),  in  which  it 
was  held  that  the  appearance  of  "Ridgewood  Ice  Co."  in  the  margin  of  a  note 
was  not  a  fact  carrying  any  presumption  that  the  note  was,  or  was  intended 
to  be.  one  of  that  company. 

Indorsement  on  negotiable  paper  payable  to  a  corporation  by  the  proper 
agents  in  their  own  names  has  often  been  held  to  be  the  indorsement  of  the 
company.  Lay  v.  Austin,  25  Fla.  9.33,  7  South.  143  (1S,S9).  And  so  with  drafts 
drawn  by  the  agent.  Chipman  v.  Foster,  119  Mass.  189  (187.5).  The  difference 
between  a  maker  of  paper  and  the  indorser,  or  the  drawer  of  a  bill  of  ex- 
rrhauge  is  emphasized  in  Collins  v.  Buckeye  State  Ins.  Co.,  17  Ohio  St.  215, 
93  Am.  Dec.  614  (1867).  The  acceptor  of  a  bill,  however,  is  treated  like  the 
.  maker  of  a  note,  and  not  like  an  indor.ser.  Robinson  v.  Kanawha  Valb^y  P>ank, 
'  44  Ohio  St.  441,  8  N.  E.  583,  .58  Am.  Rep.  829  (1886);  Slawson  v.  Loriug,  5 
.Mien,  340,  81  Am.  Dec.  750  (1862). 


Ch.  3)  EXECUTION    OF    THE    AUTHORITY  4G0 

on  the  face  of  the  paper,  and  the  party  signing  describes  himself  as 
agent,  trustee,  or  the  like,  without  more,  it  is  the  obligation  alone  of 
the  party  whose  name  is  set  to  the  paper,  the  superadded  word  or 
words  being  mere  descriptio  personse,  to  be  disregarded  as  surplus- 
age ;  and  evidence  cannot  be  received  to  show  that  he  was  in  fact  the 
agent  or  trustee  or  the  like  of  an  undisclosed  principal,  cestui  que 
trust,  or  the  like,  and  that  the  obligation  was  that  of  such  other  per- 
son. And,  again,  if  the  paper  discloses  the  names  of  two  parties  either 
of  whom  may  be  the  obligor,  and  it  is  doubtful  from  the  whole  in- 
strument which  of  the  two  is  intended  to  be  bound,  and  the  signer 
describes  himself  as  agent,  or  as  acting  in  other  representative  ca- 
pacity, parol  evidence  is  admissible  to  show  that  it  is  the  obligation 
of  the  party  named  in,  but  not  signing,  the  paper. 

These  propositions  are  not  only  settled  by  the  great  weight  of  au- 
thority in  other  jurisdictions,  but  they  have  been  several  times  de- 
clared and  reaffirmed  by  this  court,  and  never  departed  from,  as  a 
critical  examination  of  the  cases  relied  on  by  the  appellees  themselves 
will  demonstrate.  Lazarus  v.  Shearer,  2  Ala.  718;  Baker  v.  Greg- 
ory, 28  Ala.  550,  65  Am.  Dec.  366 ;  Drake  v.  Flewellen,  33  Ala.  106 ; 
May  v.  Hewitt,  Id.  161 ;  Ware  v.  Morgan,  67  Ala.  461 ;  Collins  v. 
Hammock,  59  Ala.  448.  In  all  these  cases,  where  parol  evidence  was 
let  in,  the  names  of  two  or  more  possible  obligors  appear  on  the  face 
of  the  instrument  in  such  way  as  to  render  it  doubtful  from  the  pa- 
per itself  which  of  them  was  intended  to  be  bound,  the  question  being 
thus  brought  within  the  category  last  above  stated.  This  is  not  true 
of  the  instrument  now  before  us.  The  only  possible  obligors  upon 
it  are  those  whose  names  are  signed  to  it.  The  only  other  name  upon 
the  paper  is  that  of  the  payee.  The  name  of  no  other  possible  obligor 
being  disclosed,  the  words,  "Board  of  Business  Managers,"  following 
the  signatures  of  the  defendants,  it  being  in  no  wise  indicated  of 
what  or  of  whom  they  are  business  managers,  are  merely  descriptive 
of  the  persons  of  the  signers,  and  to  be  wholly  disregarded  as  sur- 
plusage. Thus  the  case  is  brought  within  the  second  category  above 
stated,  and  the  defendants  should  not  have  been  allowed  to  plead  or 
prove  that  it  was  the  intention  of  the  parties  to  the  note  to  bind  the 
Etowah  Alliance  Manufacturing  Company,  of  which  they  were  the 
board  of  business  managers,  and  not  themselves  individually. 

The  rulings  of  the  trial  court  were  not  in  line  with  these  views, 
and  its  judgment  must  be  reversed.    The  cause  is  remanded. 


470  Till':  AiriioKiiY  (i'ait  l* 

RAW  I.INC.S  V.  ROP.SON. 

(SuiirtMiio  C.Mirt   of  (Icori,'!;!.    iss:;.     70  (Ja.  ^^'^7>.) 

Ckawtokd.  J.  This  suit  was  l)r(>ii<;lit  against  Gcorf^ia  Kobson. 
the  detoiulaiU,  io  rocoxor  of  hor  $.i60,  for  six  tons  of  commercial 
guano.  She  was  suetl  upon  a  note  j:^iven  therefor,  which  was  signed 
"J.  A.  Robson,  agent  for  wife,"  and  also  upon  account  for  guano 
for  the  same  amount  called  for  by  the  note. 

When  the  case  was  called  for  trial,  the  court,  on  motion  of  defend- 
ant's counsel,  dismissed  it  upon  the  grounds: 

(\)  Hecause  the  note  sued  ui)on  was  the  note  of  J.  A.  Robson,  and 
not  that  of  his  wife.  Georgia  Robson. 

(2)  Because  the  account  sued  uj)on  was  settled  l)y  the  note,  and 
could  not  be  sued  upon. 

We  think  that  the  court  erred  in  dismissing  the  suit,  on  both 
grounds. 

1.  Where  one  signs  a  note  with  his  own  name,  and  nothing  ap- 
pears upon  its  face  to  show  that  he  is  acting  for  another,  he  will  be 
held  personally  liable.  And  so,  too,  where  one  signs  for  another  for 
whom  he  has  no  legal  authority,  as  where  he  adds  to  his  own  name 
the  word  administrator,  executor,  guardian,  or  where  he  simply  adds 
the  word  agent,  the  obligation  is  held  to  be  a  personal  one.  But  in 
this  case  whilst  J.  A.  Robson  signs  his  own,  instead  of  his  wife's 
name,  it  is  clear  that  the  intent  was  to  sign  for  and  bind  the  wife, 
and  that  the  contract  was  for  her  benefit.  We  think  that  this  paper 
shows  two  material  facts  ;  one,  that  the  debt  was  the  wife's ;  the  other, 
that  he  was  her  agent  to  make  it.  And  the  failure  upon  her  part,  when 
sued  thereon,  to  plead  non  est  factum,  may  well  be  construed  into 
an  implied  admission  of  his  authority  to  make  it. 

Where  the  principal  is  distinctly  indicated,  as  in  this  case,  on  the 
face  of  the  paper,  such  principal,  and  not  the  agent,  will  be  the  party 
liable.  The  rule,  however,  is  that  this  must  appear  in  some  way ; 
the  particular  form  in  which  it  is  done  is  immaterial,  if  it  in  fact 
be  done  for  the  principal,  and  sulistantially  in  his  or  her  name,  that 
will  be  sufficient. '■"'  Of  course  such  liability  will  always  depend  upon 
the  right  of  the  agent  to  bind  the  principal ;    but  wherever  it  exists, 

1"'  "When  tbe  names  of  both  princijial  and  aj,'t'nt  apitcar  in  the  instrument, 
aiul  the  contract,  thonjih  in  the  name  of  the  a.yent,  (Hscloses  a  reference  to 
the  liusiiie.s.s  of  the  principal,  so  that  the  instrnment  as  it  stands  is  consistent 
with  either  view,  of  its  beiuK  the  en«a,i:enient  of  tlie  i)riiicipal,  or  tliat  of  tlie 
anient,  parol  evidence  is  adniissil)le  in  a  suit  aji;ainst  the  aj;ent  to  charj^e  him 
i>y  sliowiiif;  either  that  credit  was  jriven  to  him  or  that  lie  had  not  authority 
to  hind  the  principal,  or  to  discharge  him  by  proving  that  the  consideration 
passed  directly  to  his  i)rinciiia]."  etc.  Smith  v.  Alexander,  'M  Mo.  !!).'{  (1860). 
A.s  to  when  parol  evidence  may,  and  when  it  may  not,  be  admitted,  see  the 
elalcn-ate  note  in  L'l  L.  IJ.  A.  (N.  S.)  104.5  to  N.  Y.  L.  Ins.  ("o.  v.  Martindale. 
75  Kan.  142.  88  Pac.  oHO,  121  Am.  St.  Kep.  302,  12  Ann.  Cas.  077  (1!)07):  also. 
Knippeuberg  v.  Greenwood  Min.  Co.,  .'50  Mont.  11,  101  Pac.  150  (1900). 


Cll.  3)  EXECUTION    OF    THE    AUTHORITY  471 

and  the  paper  shows  that  he  is  acting  for  the  principal  and  not  for 
himself,  the  principal  will  be  bound.  The  note  here  sued,  on  its  face 
forbids  the  conclusion  that  J.  A.  Robson  was  the  principal ;  it  shows 
that  he  was  only  an  agent,  and  at  the  same  time  for  whom  he  was 
agent.  This  much  appearing  in  the  paper  itself  authorizes  the  ad- 
mission of  parol  evidence  to  show  who  the  wife  was,  for  it  is  no 
attack  upon  the  writing  to  do  this  by  additional  testimony.  See  Col- 
Hns  V.  Johnson,  16  Ga.  458 ;  Graham  v.  Campbell,  56  Ga.  258 ;  People 
V.  Superior  Court  of  New  York,  10  Wend.  292 ;  Parsons,  Notes  and 
Bills,  92,  95,  102 ;   Tiller  v.  Spradley,  39  Ga.  35. 

2.  Upon  the  second  ground  of  the  defendant's  motion  to  dismiss 
the  plaintiff's  suit,  we  think  that  the  court  also  erred.  Section  2867 
of  the  Code  declares  that  bank  checks  and  promissory  notes  are  not 
payment  until  themselves  paid. 

In  the  case  of  Weaver  v.  Nixon  &  Wester  [69  Ga.  699],  decided 
September  term,  1882,  this  court  held  that  "a,  bill,  acceptance  or 
promissory  note,  either  of  the  debtor  or  of  a  third  person,  is  no  pay- 
ment or  extinguishment  of  the  original  demand,  unless  it  is  expressly 
agreed  to  receive  it  in  payment." 

Let  the  judgment  of  the  court  below  be  reversed. 

-       ^/ 

KEIDAN  V.  WINEGAR. 

(Supreme  Court   of   Michifiau,  189:?.     0.1  Mich.  430,  54  N.   W.  flOl,  20  iL.  R 

A.  70.->.)  / 

McGratii,  J.^'''  Plaintiff  had  judgment  upon  the  following  prom- 
issory note:  "$336.96-100.  Grand  Rapids,  Mich.,  Dec.  22,  1887. 
Ninety  days  after  date,  I  promise  to  pay  to  the  order  of  Geo.  Keidan 
three  hundred  thirty-six  and  96-100  dollars  at  the  Old  National  Bank 
of  Grand  Rapids,  Mich.,  value  received,  with  interest  at  the  rate  of 
eight  per  cent,  per  annum  until  paid.     W.  S.  Winegar,  Agt." 

Defendant,  with  his  plea,  filed  an  affidavit  setting  forth  "that  the 
note,  a  coi)y  of  which  is  attached  to  the  declaration  in  said  cause,  and 
served  upon  said  deponent,  with  a  copy  of  said  declaration,  is  not 
the  note  of  this  deponent,  defendant  as  aforesaid;  and  he  denies  the 
same  and  the  execution  thereof,  and  says  that  he,  said  defendant, 
is  not  indebted  to  said  plaintiff  upon  said  note,  nor  for  any  part 
thereof,  nor  is  he  indebted  to  said  ])laintiff  in  any  sum  whatever,  nor 
in  any  maimer  whatever." 

Upon  the  trial  defendant  offered  to  show  that  in  1884,  before  i)lain- 
tiff  had  any  dealings  with  defendant,  plaintiff  was  informed  that  de- 
fendant was  carrying  on  business  as  the  agent  of  Maggie  G.  Winegar. 
and  was  not  doing  business  for  himself;    that  business  relatifdis  were / 
then  estabHshed  between  plaintiff  and  said  Maggie  G.  Winegar;    that 

in  Pjirt  of  IliP  fijiiiilnii  Is  (iiiilttcd. 


172  TiiK  AriiioKri'Y  (Pari  3 

said  business  relations  contimicd  ivou\  tito  oarl\'  jiart  of  1884  to  and 
including  the  year  1887,  and  embraced  many  transactions  between 
plaintitY  and  IMaggie  G.  W'inegar;  that  many  instruments  were  made 
between  the  parties,  which  were  signed  exactly  as  the  note  sued  upon 
is  signed,  and  that  this  form  of  execution  had  come  to  be  recognized 
and  adopted  between  the  parties  as  binding  Maggie  G.  Winegar;  that 
during  that  time  no  business  wms  transacted  by  the  defendant  in  his 
individual  capacity,  and  all  the  business  done  was  that  of  his  prin- 
cipal, and  known  and  understood  to  be  such  by  plaintiff;  that  the 
said  note  was  given  and  accepted  as  the  obligation  of  Maggie  G.  Wine- 
gar;  that  the  note  was  given  for  duebills  and  goods  furnished  by 
plaintitT  to  Maggie  G.  Winegar,  and  such  duebills  and  goods  were  by 
plaintitf  charged  to  said  Maggie  G.  Winegar  on  the  books  of  plaintiff; 
that  the  taking  of  these  notes  did  not  in  the  least  change  the  char- 
acter of  the  indebtedness;  and  that  defendant  never  received  any 
benetit  or  consideration  for  said  note.  The  court  refused  to  admit 
the  testimony,  and  directed  a  verdict  for  the  plaintiff. 

The  clear  weight  of  authority  is  that  the  promise  in  the  present 
case  is  prima  facie  the  promise  of  William  S.  Winegar,  and,  as  be- 
tween one  of  the  original  parties  and  a  third  party,  the  addition  of 
the  word  "agent"  is  not  sufficient  to  put  such  third  party  upon  inquiry. 
The  question  here,  however,  is  whether,  as  between  the  immediate 
parties  to  the  instrument,  parol  evidence  is  admissible  to  show  the  real 
character  of  the  transaction. 

In  his  excellent  work  on  Agency,  Mr.  Mechem  lays  down  the  fol- 
lowing general  rules,  which  we  think  are  sustained  by  reason  and  the 
weight  of  authority:  "(1)  Where  the  paper,  on  its  face,  is  the  under- 
taking of  the  agent  only,  no  reference  being  made  on  its  face  to  rep- 
resentative capacity,  and  where  the  paper,  on  its  face,  is  unmistakably 
the  principal's,  parol  evidence  will  not  be  received,  in  the  one  case 
to  exonerate,  and  in  the  other  to  charge,  the  agent.  (2)  But  where  the 
paper  bears  on  its  face  some  reference  to  a  principal,  or  some  appel- 
lation indicating  representative  character,  while  it  is  undoubtedly  true 
that  the  mere  addition  of  the  word  'agent,'  'trustee,'  'treasurer,'  and 
the  like,  or  the  mere  recital  in  the  body  of  the  instrument  that  the  per- 
son signing  is  such  agent,  treasurer,  or  trustee  of  a  principal  named 
or  unnamed,  is,  as  has  been  seen,  to  be  regarded,  prima  facie,  as  de- 
scriptio  personse,  merely,  and  not  as  characterizing  the  act  as  one 
done  in  a  representative  capacity;  and  while  it  is  true,  as  a  general 
rule,  that  parol  evidence  is  not  admissible  to  exonerate  an  agent  from 
a  contract  into  which  he  has  personally  entered,  yet  it  is  believed  that 
the  preponderance  of  authority  will  warrant  the  statement  of  the 
rule  that — First,  between  the  immediate  parties  to  a  bill  or  note,  parol 
evidence  is  admissible  to  show  (a)  that,  by  a  course  of  dealing  be- 
tween the  parties,  that  form  of  execution  has  come  to  be  the  rec- 
ognized and  adopted  form  by  which  the  obligation  of  the  principal 
is  entered  into;   or  (bj  that  the  instrument  was,  to  the  knowledge  of 


Ch.3)  EXECUTION    OF    THE    AUTHORITY  473 

the  parties,  intended  to  be  the  obligation  of  the  principal,  and  not  of 
the  agent,  and  that  it  was  given  and  accepted  as  such;  (c)  that  an 
instrument  which  is  so  ambiguous  upon  its  face  as  to  render  it  un- 
certain who  was  intended  to  be  bound  was  known  to  be  intended  to 
be  the  obligation  of  the  principal."  INIechem.  Ag.  §  443,  and  cases 
cited.    See,  also  1  Amer.  &  Eng.  Enc.  Law,  390,  391. 

In  Metcalf  v.  Williams,  104  U.  S.  93,  26  L.  Ed.  665,  Mr.  Justice 
Bradley  says :  "The  ordinary  rule,  undoubtedly,  is  that  if  a  person 
merely  adds  to  the  signature  of  his  name  the  word  'agent,'  'trustee,' 
or  'treasurer,'  without  disclosing  his  principal,  he  is  personally  bound. 
The  appendix  is  regarded  as  a  mere  descriptio  personae.  It  does  not 
of  itself  make  third  persons  chargeable  with  notice  of  any  representa- 
tive relation  of  the  signer.  But  if  he  be  in  fact  a  mere  agent,  trustee. 
or  officer  of  some  principal,  and  is  in  the  habit  of  expressing  in  that 
way  his  representative  character  in  his  dealings  with  a  particular  party, 
who  recognizes  him  in  that  character,  it  would  be  contrary  to  justice 
and  truth  to  construe  the  documents  thus  made  and  used  as  his  per- 
sonal obligation,  contrary  to  the  intent  of  the  parties." 

In  Kean  v.  Davis,  21  N.  J.  Law,  683,  47  Am.  Dec.  182,  Chief  Jus- 
tice Green  says :  "The  question  is  not,  what  is  the  true  construction 
of  the  language  of  the  contracting  party?  Whose  language  is  it?  And 
the  evidence  is  not  adduced  to  discharge  the  agent  from  a  personal 
liability  which  he  has  assumed,  but  to  prove  that  in  fact  he  never 
incurred  that  liability;  not  to  aid  in  the  construction  of  the  instru- 
ment, but  to  prove  whose  instrument  it  is.  Now,  it  is  true  that  the 
construction  of  a  written  contract  is  a  question  of  law,  to  be  settled 
by  the  court  upon  the  terms  of  the  instrument.  But  whether  the  con- 
tract was  in  point  of  fact  executed,  when  it  was  made,  and  by  whom 
it  was  made,  are  questions  of  fact,  to  be  settled  by  a  jury,  and  are 
provable  in  many  instances  by  parol,  even  though  the  proof  conflicts 
with  the  language  of  the  instrument  itself." 

In  Hicks  v.  Hinde,  9  Barb.  528,  where  an  agent  drew  a  bill  on  his 
principal  for  a  debt  due  from  the  principal  to  the  payee,  adding  the 
word  "agent"  to  his  signature,  and  the  payee  knew  that  the  drawer 
was  authorized  by  his  principal  to  draw  the  bill  as  his  agent,  and  it 
was  the  understanding  of  all  parties  that  the  drawer  signed  only  as 
agent,  and  not  with  a  view  of  binding  himself,  it  was  held  that  the 
drawer  was  not  personally  liable  on  the  bill.'^     ♦     *     * 

As  is  so  often  said,  it  is  the  intent  of  the  parties  which  is  to  be 
carried  out  by  the  courts.  The  rule  that  rejects  words  added  to  the 
signature  is  an  arbitrary  one.  Its  reason  is  not  so  much  that  the 
words  are  not,  or  may  not  be,  suggestive,  but  that  they  are  but  sug- 

iT  Accord,  iu  a  Hult  between  tlic  fmrtics:  Ilnrdy  v.  Pllclier,  57  Ml.ss.  is, 
34  Am.  Kcp.  A'.'.'J  (ISTKi.  .'<(•(•  tlic  i-xlcmlid  review  In  Knljipenherg  v.  Green- 
woMfl  ^rln.  Co..  :',u  Mont.  11,  101  I'ac.  \r,U  (1000). 

KfYeet  of  Ne^'otlulile  In.strnnH-ut.s  Lnw  us  to  descriptio  personse.  Iliuipt  v. 
Vint,  US  W.  Va.  G57,  70  S.  K.  702,  .'{4  L.  R.  A.  (N.  S.)  .^.IS,  itost,  p.  057  (1011). 


474  Tin:  AT  riiouri'Y  (rait  2 

i:[ostive.  aiul  tlio  iiistninu'iU,  as  a  whole,  is  nol  suriK-icntly  coin])lcte 
to  point  to  other  parentage.  The  very  sui,^j;estivenes.s  of  these  added 
words  has  j:;i\en  rise  to  an  irreei>ncihible  confusion  in  the  authorities 
as  to  the  legal  effect  of  such  an  instrument.  Extrinsic  evideme,  there- 
fore, is  admissible  in  such  case,  between  the  immediate  i)arlios.  to  ex- 
plain a  suggestion  contained  on  llic  face  of  the  iiistrnmeiU,  and  to 
carry  out  the  contract  actually  entered  into  as  suggested,  but  not  fully 
shown,  by  the  note  itself. 

The  presumption  that  persons  dealing  with  negotiable  instruments 
take  them  on  the  credit  of  the  parties  whose  names  appear  should  not 
be  absolute  in  favor  of  the  immediate  payee,  from  whom  the  consid- 
eration passed,  who  must  be  deemed  to  have  known  all  the  facts  and 
circumstances  surrounding  the  inception  of  the  note,  and  with  such 
knowledge  accepted  a  note  containing  such  a  suggestion.  In  the  case 
of  Tilden  V.  Barnard,  43  Mich.  376,  5  N.  W.  420,  38  Am.  Rep.  197, 
under  a  state  of  facts  similar  to  those  offered  to  be  shown  here,  it 
was  hekl  that  defendants  there  were  not  liable. 

We  think  that  in  the  present  case  defendant  was  entitled  to  make 
the  showing  offered.  Under  the  general  issue,  defendant  was  entitled 
to  give  in  evidence  any  matter  of  defense  going  to  the  existence  of 
any  promise  having  legal  force,  as  against  him.  1  Shinn,  PI.  &  Pr. 
§  740. 

The  judgment  is  reversed,  and  a  new  trial  ordered.  The  other 
justices  concurred. 


IvIEBSCHER  v.  KRAUS. 

(Supreme  Court  of  Wisconsin,  1889.     74  Wis.  387,  43  N.  W.  166,  5  L.  R.  A. 
496,  17  Am.  St.  Rep.  171.) 

Orton,  J.  This  action  was  brought  on  the  following  promissory 
note: 

"$637.40.     Milwaukee,  January  1st,  1887.     Ninety  days  after  date 
we  prorruise  to  pay  to  Leo  Liebscher,  or  order,  the  sum  of  six  hun- 
dred and  thirty-seven  dollars  and  forty  cents,  value  received. 
"San  Pedro  Mining  and  Milling  Company, 

"F.  Kraus,  President." 

The  plaintiff  demands  judgment  on  this  note  against  both  the  cor- 
poration and  Frederick  Kraus,  as  joint  makers.  The  defendant 
Kraus  answered  that  he  signed  the  note  for  the  said  San  Pedro  Min- 
ing &  Milling  Company,  as  its  president,  and  not  otherwise,  and 
that  his  signature  was  placed  upon  said  note  for  the  purpose  of 
showing  who  executed  the  same  on  behalf  of  said  company,  and  as 
a  part  of  the  corporation  signature  to  the  note,  and  for  no  other 
purpose.  The  plaintiff  offered  to  prove  on  the  trial,  substantially, 
that  Kraus  did  not  sign  the  name  of  the  company,  but  signed  his 
own  name  as  a  joint  maker,  intending  to  bind  himself,  and  that  this 


Ch.  3)  EXECUTION  OF  THE  AUTHORITY  475 

was  according  to  the  understanding  of  the  parties  at  the  time.  This 
oflfer  was  rejected,  and  a  verdict  in  favor  of  Kraus  was  directed  by 
the  court.  This  evidence  is  admissible  only  on  the  ground  that  there 
is  an  ambiguity  in  the  signatures  to  the  note.  If,  in  the  law,  this 
signing  imports  that  both  the  company  and  Kraus  are  jointly  bound, 
or  that  only  the  company  is  bound,  there  is  no  ambiguity,  and  parol 
evidence  to  alter  or  vary  this  eflfect  is  inadmissible.  But  if,  in  the 
law,  such  signing  imports  only  that  both  are  bound,  or  the  company 
only  is  bound,  according  to  the  facts  and  circumstances  in  explana- 
tion of  it,  and  the  intention  or  understanding  of  the  parties,  then 
there  is  an  ambiguity,  and  the  evidence  was  proper. 

The  contention  of  the  learned  counsel  of  the  appellant  that  this 
signing  imports  that  both  are  bound  is  inconsistent  with  the  of?er 
of  such  evidence.  The  learned  counsel  of  the  a]:)pellant  has  ex- 
pressed, in  his  brief,  the  true  principle  as  follows :  '"As  to  the  ques- 
tion of  parol  evidence,  the  rule  of  law  is  that  such  evidence  cannot 
be  admitted  to  vary  the  terms  of  a  contract,  or  to  show  contrary  in- 
1  ^tion  than  that  disclosed  by  the  instrument,  unless  there  is  an  am- 
biguity." This  has  been  often  decided  to  be  the  law  by  this  court. 
Foster  v.  Clifford,  44  Wis.  569,  28  Am.  Rep.  603 ;  Cooper  v.  Cleg- 
horn,  50  Wis.  113,  6  N.  W.  491 ;  Hubbard  v.  Marshall,  50  Wis.  322, 
6  N.  W.  497;    Gillmann  v.  Henry,  53  Wis.  470,  10  N.  W.  692. 

There  appears  to  be  an  inconsistency  in  cases  where  it  is  first  held 
that  such  a  note  ipso  facto  binds  the  person  who  signed  it  with  his 
official  name,  and  yet  that  parol  evidence  might  be  given  to  make  it 
certain.  Heffner  v.  Brownell,  70  Iowa,  591,  31  N.  W.  947.  This 
case  is  mentioned  as  the  only  one  in  which  it  has  been  decided  that 
such  signing  binds  the  person  as  well  as  the  corporation ;  but  there 
would  seem  to  be  somewhat  of  an  ambiguity  in  the  opinion.  In 
Bean  v.  Mining  Co.,  66  Cal.  451,  6  Pac.  86,  56  Am.  Rep.  106,  it  seems 
to  have  been  decided  that  a  similar  note  bound  the  company  alone, 
but  that  parol  evidence  was  proper  to  explain  it.  No  case  is  cited, 
and  I  can  find  none,  where  it  has  been  decided  squarely  that  such  a 
note  bound  both  the  company  and  the  person  whose  name  appears 
below,  with  the  name  of  his  office  or  agency,  or  bound  the  company 
alone,  except  the  case  of  Chase  v.  Pattberg,  12  Daly,  171,  where  the 
note  was:  "We  promise  to  pay,"  etc.  "[Signed]  English  S.  M.  Co. 
H.  Pattberg,  Manager ;"  anrl  it  was  decided  that  the  company  was 
not  boimd,  and  that  Pattberg  was. 

The  authorities  arc  generally  the  other  way.  In  Draper  v.  Steam- 
Heating  Co.,  5  Allen,  33<S,  the  note  was :  "We  promise  to  pay,"  etc. 
"[Signed]  Massachusetts  Steam-Heating  Company,  L.  S.  Fuller. 
Treasurer."  In  Castle  v.  Founflry  Co.,  72  Me.  167,  it  was:  "We 
promise  to  pay,"  etc.,  "at  office  Belfast  Foundry  Company.  [Sign- 
ed] Belfast  Foundry  Comj)any.  W.  W.  Castle,  President."  In 
Falls  v.  Moebs,  127  U.  S.  597,  8  Sup.  Ct.  1319,  n  L.  VA.  200.  it  was: 


470  TiiK  AiPnoiirPY  (Part  2 

■'Wo  promise  to  pay,"  etc.,  "to  the  order  of  Goo.  "Moebs,  Sec.  & 
Troas.,  at,"  etc.  "[ Signed )  Poninsular  Cii;ar  Co.  Goo.  Moebs,  Sec. 
cv:  Troas.,"  ami  indorsed  "Goo.  I\lool)s,  Sec.  &  Treas."  These  notes 
wore  hold  to  be  unainbii;iious,  and  not  explainable  by  parol  evidence, 
anil  the  notes  of  the  companies  alone.  ^lany  other  cases  of  similar 
signing  are  found  in  the  above  cases  and  in  the  text-books.  See, 
also,  Mochom.  Ag.  §  430;  1  Rand.  Com.  Paper,  188;  1  Daniel,  Neg. 
Inst.  §§  299-305  •"  Gillot  v.  Bank.  7  111.  App.  499;  Scanlan  v.  Keith, 
102  in.  634.  40  Am.  Rep.  624;  Latham  v.  Flour-Mills,  68  Tex.  127, 
3  S.  W.  462;  Story,  Ag.  §  154;   Pars.  Notes  &  B.  312. 

The  question  comes  very  near,  if  not  quite,  having  been  decided 
by  this  court  in  Houghton  v.  Bank,  26  Wis.  663,  7  Am.  Rep.  107, 
whore  it  is  held  that  an  indorsement  on  a  note  not  belonging  to  the 
bank,  by  "Geo.  Buckley,  Cas.,"  he  being  cashier  of  the  bank,  bound 
the  bank  and  not  himself.  In  Bank  v.  Bank,  16  Wis.  120,  it  is  held 
that  a  note  signed  by  "J.  H.  Sidmore,  Cash.,"  bound  the  bank  alone. 
In  Rockwell  v.  Bank,  13  Wis.  653,  where  the  bank  promises  to  pay 
in  the  body  of  the  note,  and  it  is  signed  only  by  "D,  D.  Spencer, 
Cashier,    it  was  held  that  the  bank  only  was  bound. 

The  principle  of  these  authorities  seems  to  be  "that  if  the  agent 
sign  the  note  with  his  own  name  alone,  and  there  is  nothing  on  the 
face  of  the  note  to  show  that  he  was  acting  as  agent,  he  will  be  per- 
sonally liable ;  but  if  his  agency  appears  with  his  signature,  then  his 
principal  only  is  bound."  Here  the  corporation  could  not  sign  its 
own  name,  and  it  is  not  otherwise  shown  on  the  face  of  the  note 
than  that  Kraus  signed  the  corporate  name,  and  by  adding  the  word 
"President"  to  his  own  name  he  shows  conclusively  that  as  president 
of  the  corporation  he  signed  the  note,  and  not  otherwise.  Such  is 
the  natural  and  reasonable  construction  of  these  signatures,  and  so 
it  would  be  generally  understood.  The  affix,  cashier,  secretary,  pres- 
ident, or  agent,  to  the  name  of  the  person  sufficiently  indicates  and 
shows  that  such  person  signed  the  bank  or  corporate  name,  and  in 
that  character  and  capacity  alone.  The  use  of  the  word  "by"  or  "per" 
or  "pro"  would  not  add  to  the  certainty  of  what  is  thus  expressed.  It 
is  not  common  to  use  these  words  in  commercial  business.  It  is 
sufficiently  understood  that  the  paper  is  signed  by  the  officer  or  agent 
named,  and  for  the  corporation.  But  it  is  useless  to  prolong  this  dis- 
cussion. It  is  almost  too  plain  for  argument.  The  note  was  that  of 
the  corporation  alone,  signed  by  Kraus  as  its  president. 

The  circuit  court  properly  rejected  the  offer  of  parol  proof,  and 
correctly  instructed  the  jury  to  find  a  verdict  in  favor  of  Kraus.  The 
judgment  of  the  circuit  court  is  affirmed.^^ 

18  An  instructive  discussion  is  found  in  Guthrie  v.  Imbrie,  12  Or.  1S2,  6 
Pac.  W4.  ')H  Am.  Rep.  xn  n^8.")).  The  note  sued  on  read:  '%nOO.  Portland, 
Oregon.  .July  8,  1875.  For  vahie  received,  we  promise  to  pay  to  Diivid  Guthrie, 
or  order,  ninety  day.s  after  date,  live  hundred  dollar.s  in  U.  S.  gold  coin,  with- 
out interest.     [Signed]  James  Imbrie,  Pres't.     [Seal.]  J.  J.  Imbrie,  Sec.  G.  M. 


Q\l   3)  EXECUTION    OF    THE    AUTHORITY  477 


SECTION  6.— EFFECT  OF  VARIOUS  FORMS  OF 
EXECUTION 


TUCKER  MFG.  CO.  v.  FAIRBANKS. 
(Supreme  Judicial  Court  of  Massachusetts,  1867.    98  Mass.  101.) 

Action  on  the  following  bill  of  exchange:  "Boston,  March  23, 
18667  $47469.76.  Two  months  after  date  pay  to  the  order  of  Messrs. 
Hiram  Tucker  &  Co.  four  thousand  four  hundred  and  sixty-nine 
76/100  dollars,  value  received,  and  charge  the  same  to  the  account 
of  David  FairBanT^s  and  Co.,  Agts.  Piscataqua  F.  &  M.  Ins.  Co. 
To  Piscataqua  F.  &  M.  Ins.  Co.,  So.  Berwick,  Me."  The  draft  was 
"accepTed  foTtTie  Treasurer,  David  Fairbanks,  President,"  and  was_ 
indorse'd,"*'ParyalDle  in  Boston,  Hiram  Tucker  &  Co." 

Gray;  p'  ^  *  *~'3.  The  question  whether  the  defendants  are 
liable  upon  the  face  of  the  bill  requires  more  consideration.  The 
difficulty  is  not  in  ascertaining  the  general  principles  which  must 
govern  cases  of  this  nature,  but  in  applying  them  to  the  different 
forms  and  shades  of  expression  in  particular  instruments.  JQi  order 
to  exempt  an  agent  from  liability  upon  an  instrument  executed"  l:iy 
Tiirn  within  the  scope  of  his  agency,  he  must  not  only  name  his 
principal,  but  he  must  express  by  some  form  of  words  that  the  writ- 
ing is  the  act  of  the  principal,  though  done  by  the  hand  of  the  agent. 
If  he  expresses  this,  the  principal  is  bound,  and  the  agent  is  not.. 
But  a  mere  description  of  tlie  general  relation  or  office  which  the 
■persoiTsigning  the  paper  holds  to  another  person  or  to  a  corpora- 
"TTofi,  without  indicating  that  the  particular  signature  is  made  in  the 
execufiori  of  the  office  and  agency,  is  not  sufficient  to  charge  the 
principal  or  to  exempt  the  agent  from  personal  liability.  Amid  the 
great  variety  of  language  which  may  be  used  by  merchants  in  haste 
or  thoughtlessness,  ignorant  or  unmindful  of  legal  rules,  or  not  an- 
ticipating the  importance  of  holding  one  party  rather  than  the  other 

Co."  The  seal  was  that  of  the  Oranircr  Market  Company,  a  corporation.  Tlie 
court  held  that.  Imt  for  the  seal,  then'  is  nothirn,'  wliich  purports  fo  l>iud  the 
cr)rporation.  The  wonls.  "I'residfnl,"  "Si-c.  (}.  M.  Co.,"  arc  merely  .Icscrip- 
tlo  persona-.  They  do  not  dlsfjose  the  name  of  any  principal,  and  are.  in 
fact,  too  indefinite'  Hut  the  seal  on  the  face  of  the  note  calls  for  extraneovis 
proof  to  show  why  It  was  put  there.  It  must  be  assumed  it  was  i)ut  there 
for  some  i.urF)ose.  See.  also.  I'.rown  v.  Hradlce.  l.^C.  Mass.  'JS,  .'{0  N.  E.  S.>. 
ir.  L  I{  A  rM)  .TJ  Am  St.  IU'\>.  i:'.*)  (is'.rj).  and  Heeve  v.  l<'irst  Nat.  Hank  of 
(ilas^horo  V.J  \.  J.  Law.  'JOS.  L':?  Atl.  S.^.::.  K!  I,.  U.  A.  1  i'A.  IVA  Am.  St.  Hcp-  <■'"•'• 
MM)!)  HcfTiicr  v.  I'.rowncli,  70  Iowa.  r.'.M.  :n  N.  W.  J)»7  (1SS7).  and  Hcan  v. 
•  nccr  MiniMU  Co..  r,(i  Cal.  l.".l.  <!  I'ac  sc,  -,r,  Am.  Hep.  IOC  (issr.).  represent 
oiijiosite  extremes  as  to  the  en<-<t  r.f  such  signatures.  On  this  tlie  later  Io\v:i 
ciise  of  .Matliews  v.  iMiliiupie  Mattress  Co..  S7  Iowa.  2W,  HI  N.  W.  JJ...  !'•'  I- 
U.  A.  «i7<;  (|s!i::i.  is  interesting.  See  the  dl.s.seuting  uplnion. 
i»  I'art  of  the  opinion  is  omitted. 


•ITS  TiiK  AiriioiMi'Y  (Part  2 

responsible,  it  imist  often  hapiH-n  thai  eases  fall  very  near  the  divid- 
ing lino;  and,  in  order  to  maintain  unilorniily  oi  deeision,  it  is  neces- 
sary for  the  conrt  to  refer  to  the  eases  already  adjudieated,  especially 
within  its  own  jnrisdiction. 

The  authority  which  at  first  slight  seems  most  slron^lv  to  sn])i)ort 
the  position  of  the  defendants  is  that  of  luillou  v.  Talhot,  16  Mass. 
461,  8  Am.  Dee.  14().  in  which  a  note  signed  "Joseph  Talbot,  Agent 
for  David  Terry."  was  held  not  to  bind  Talbot  jjersonally.  That  case 
has  since  been  reci^gnized  and  followed  in  this  Commonwealth. 
Jefts  V.  York.  4  Cnsh.'  372.  50  Am.  Dec.  791;  Page  v.  Wight,  14  Al- 
len, 182.  Bnt  the  important  and  effective  word  in  Ballon  v.  Talbot 
was  not  the  word  "agent."  nor  the  name  of  the  principal,  bnt  the  con- 
necting word  "for,"  which  might  indeed  indicate  merely  the  relation 
which  the  agent  held  to  the  principal ;  but  which  was  equally  apt  to 
express  the  fact  that  the  act  was  done  in  behalf  of  the  principal,  in  the 
same  manner  as  if  the  words  had  been  transposed  thus :  "For  David 
Ferry,  Joseph  Talbot,  Agent."  See  Deslandes  v.  Gregory,  2  El.  & 
El.  602.  This  is  made  manifest  by  considering  that  if  the  word 
"agent"  had  been  wholly  omitted,  and  the  form  of  the  signature  had 
been  simply  "Joseph  Talbot,  for  David  Ferry,"  or  "For  David  Ferry, 
Joseph  Talbot,"  it  would  have  been  well  executed  as  the  contract  of 
the  principal,  even  if  it  had  been  under  seal,  and  of  course  not  less 
so  in  the  case  of  a  simple  contract.  Long  v.  Colburn,  11  Mass.  97,  6 
Am.  Dec.  160;  Emerson  v.  Providence  Hat  Mfg.  Co.,  12  Mass.  237, 
7  Am.  Dec.  66;  Mussey  v.  Scott,  7  Gush.  215,  54  Am.  Dec.  719; 
Met.  Con.  105,  110. 

On  the  other  hand,  in  Hills  v.  Bannister,  8  Cow.  31,  a  note  signed  by 
two  persons,  with  the  addition  "Trustees  of  Union  Religious  Society, 
Phelps"  (who  were  a  legal  corporation),  w^as  held  to  bind  the  signers 
personally;  and  in  Barker  v.  Mechanic  Insurance  Co.,  3  Wend.  94, 
20  Am.  Dec.  664,  a  note  signed  "John  Franklin,  President  of  the 
Mechanic  Fire  Insurance  Company,"  was  held  on  demurrer  not  to 
be  the  note  of  the  company,  although  alleged  to  have  been  made 
within  the  authority  of  the  president  and  the  scope  of  the  legitimate 
business  of  the  corporation ;  the  court  saying :  "In  this  case,  there  is 
an  averment  that  the  president  was  lawfully  authorized;  but  it  does 
not  appear  that  he  acted  under  that  authority ;  he  does  not  say  that 
he  signs  for  the  company;  he  describes  himself  as  president  of  the 
company,  but  to  conclude  the  company  by  his  acts  he  should  have 
contracted  in  their  name,  or  at  least  on  their  behalf."  The  variation 
between  the  words  "for"  and  "of"  seems  at  first  view  slight ;  but  in 
the  connection  in  which  they  are  used  in  signatures  of  this  kind  the 
difference  is  substantial.  "Agent  of"  or  "president  of"  a  corporation 
named  simply  designates  a  personal  relation  of  the  individual  to  the 
corporation.  "Agent  for"  a  particular  person  or  corporation  may 
designate  either  the  general  relation  which  the  person  signing  holds 
to  another  party,  or  that  the  particular  act  in  question  is  done  in 


Cll    3)  EXECUTION    OF    THE    AUTHORITY  479 

behalf  of  and  as  the  very  contract  of  that  other;  and  the  court,  if 
such  is  manifestly  the  intention  of  the  parties,  may  construe  the 
words  in  the  latter  sense.  But  even  "agent  for"  has  been  held  under 
some  circumstances  a  mere  descriptio  personge  of  the  agent,  as  in 
De  Witt  V.  Walton,  9  N.  Y.  571,  in  which  the  name  following  these 
words  was  not  the  proper  name  of  the  principal,  but  the  name  of  a 
newspaper  which  the  agent  carried  on  in  the  principal's  behalf,  and  a 
note  signed  "David  Hoyt,  Agent  for  The  Churchman,"  was  held 
to  be  the  note  of  Hoyt  and  not  of  his  principal ;  and  in  Shattuck  v. 
Eastman,  12  Allen,  369,  in  which  it  was  held  that  a  paper  in  the  form 
of  a  receipt,  signed  "Robert  Eastman,  Agent  for  Ward  6,  Lowell, 
Mass.,"  if  executed  under  such  circumstances  as  to  amount  to  a  con- 
tract, might  be  binding  on  the  agent  personally.  In  Fiske  v.  El- 
dridge,  12  Gray,  474,  in  a  careful  review  of  the  cases  by  ]\Ir.  Justice 
Dewey,  the  New  York  decisions  above  mentioned  were  quoted  with 
approval,  and  a  note  signed  "John  T.  Eldridge,  Trustee  of  Sullivan 
Railroad,"  was  held  to  be  the  personal  note  of  Eldridge.  In  Haver- 
hill Insurance  Co.  v.  Xewhall,  1  Allen,  130,  a  note  signed  "Cheever 
Newhall,  President  of  the  Dorchester  Avenue  Railroad  Company," 
was  held  to  bind  Newhall  personally,  although  given  by  him  to  an 
insurance  company  (as  was  expressed  in  the  note  itself)  in  considera- 
tion of  a  policy  issued  to  the  railroad  corporation,  which  he  was  in 
fact  authorized  to  obtain  and  sign  the  note  for.  See  also  Fullam 
V.  West  Brookfield,  9  Allen,  1 ;  Morell  v.  Codding,  4  Allen,  403 ; 
Tanner  v.  Christian,  4  El.  &  Bl.  591 ;  Parker  v.  Winslow,  7  El.  & 
Bl.  942;  Price  v.  Tavlor,  5  H.  &  N.  540;  Bottomlcy  v.  Fisher,  1 
H.  &C.  211.-« 

20  The  lipst  niodo  of  signature  is  "A.  B..  l>.v  C  D..  Afioiit."     "C.  D..  for  A.  I 

P,  "  tlKHiiih   loss  formally   ((irrect.  is  eipially  availal)l(*.     Lazarus  v.   ShoanM-.  I 

*>  Ala   Tls  (1.S41);   Excliaiiw  I'ank  v.  Lewis  County.  1!S  W.  Va.  1*7:5  (ISS(i),  with  I 

liiaiiy  illustrations.  "A.  H.  [for  C.  D.l."  however,  has  been  held  the  note  of 
A  ii  otherwise  the  brackets  seem  to  have  no  meaning;.  Early  v.  Wilkinson. 
9  Crat.  (50  Va.)  (!S  (is.lii),  and  "C.  I).,  for  A.  15.."  has  sometimes  been  held 
to  iiind  C.  D.,  tliou}.di  this  was  overruled  in  Itobertson  v.  Tope.  1  Kieh.  "lO:;. 
44  \ni  Dec  207  (1X4.')).  I'.ut  "(".  D.,  A«ent  fnr  A.  1?.."  binds  <\  D.  Kxcliant^e 
Bank  V  Lewis  Countv.  lis  W.  Va.  27:!  (issfi):  Tannant  v.  Koeky  .Mt.  Nat. 
I'.ank  1  f'olo.  271).  !•  Am.  Itej).  !".(;  (1S71);  De  Witt  v.  Walton.  S)  N.  \.  r>7L 
^eld  Notev  •'.".:;  (1S.")4) ;  Dawson  v.  Cotton.  2(5  .Ma.  ".Ill  (IS.").".);  Peterson  v. 
Homaii  44 '.Minn.  KKi.  U>  N.  W.  :!(»:{.  20  Am.  St.  Uep.  ''<i4  (IS'.K)).  "C.  D.  as 
A«i-nt  for  A.  H."  is  ^eiirrally  lu'ld  to  bind  A.  1'..  Wcni.M-  v.  Wheeler,  112  Api'. 
Div.  :!.".s.  127  .\.  Y.  Supp.  l.'.s  (lilll). 

If  the  name  of  the  principal  is  si^'ucd  the  execution  will  be  pu.d,  even 
tliouu'h  the  agent's  name  is  entirely  omitted.  Perkey  v.  .Tudd.  22  Minn.  2s7 
(1S7.^,)-  P.radlee  v.  P.ostoii  (Jlass  .Mft'.  Co..  Ki  Ph'k.  :U7  (is:;.",);  Western 
Wheeled  Scrap.-r  Co.  v.  .McMillan.  71    Neb.  tlsC.  If.)  .\.  W.  .^.12  (I'.MM). 

An  act  done  under  an  authority  must  In-  done  in  pursuance  of  that  author- 
ity. Clinan  v.  Cooke,  1  Sch.  &  Lef.  :!2.  !l  Itev.  Peii.  ."{  (1S(I2).  If  an  a«ent  in  lill- 
InV  up  a  blank  note  exceed!-  liis  ;mthority,  the  note  is  not  void  In  toto  but 
only  for  the  excess  amount.  .lohnson  v.  Plasdale.  1»  Miss.  (1  Smedes  i«t  M.) 
17."4()  .\m.  Dec.  S.">  (isb'!).  If  the  contract  is  separable,  it  will  be  upheld  to 
the  extent  of  the  authority.  Cam.  v.  C.  &  N.  W.  Ky.  Co..  4!)  Wis.  .'".7,  .''.  .\.  W. 
4."»  (ISS(t).  Put  if  there  Is  no  way  to  deterndne  what  Is  iiulliori/.ed  and  what 
Is  not  the  whole  ..Neriition   is  delectiv...     Clioteau  v.  Allen.  7o  Mo.  •_".>(»  dsT'.H. 


n 


-ISO  Till'    AUTIIOKITY  (Pait   2 

Tliis  case  is  not  (listinmiisliaMc  frDiii  (Imsc  Just  stated.     It  differs 
from  Rallou  v.  Talbot,  in  omitting  the  word  "for"  (the  only  evidence, 
contained  in  the  note  there  sued  on,  that  it  was  made  in  behalf  of  the 
principal),  leaving  the  words  "Agts.  Piscataqua  F.  &  M.  Ins.  Co." 
as  a  mere  description  of  the  persons  signing  this  bill.    The  cases  of 
Mann  v.  Chandler,  9  ^Fass.  335,  Despatch  Line  of  Packets  v.  P>ellamy 
Manufacturing  Co.,  12  N.  H.  205,  37  Am.  Dec.  203,  and  Johnson  v. 
Sniith,  21   Conn.  627,  cannot  avail  the  defendants  against  the  later 
decisions  of  this  court.     See  Fiske  v.  Eldridge,  12  Gray,  476;    Bar- 
low V.  Congregational  Society  in  Lee,  8  Allen,  461,  462.    The  n^me— 
of  the  principal  does  not  appear  in  the  body  of  the  bill..,.  The  address  _ 
of  tlie  bill  to  the  corporation  and  the  request  to  them  to^arge  the, 
amount  to  the  account  of  the  drawers  have  certainly  no  tendency  to 
show  that  the  drawers  are  the  same  as  the  corporation,  the  drawees. 
The  fact  that  the  bill  was  delivered  to  the  plaintiffs  by  the  insurance  . 
company,  as  shown  by  the  contemporaneous  receipt,  does  not  make 
it  the  less  the  promise  of  the  signers.    The  defendants  must  therefore^ 
be  held  personally  responsible  as  the  drawers  of  the  bill.. 

Judgment  for  the  plaintiffs. 


/ 


LOEB  V.  DRAKEFORD. 
(Supreme  Court  of  Alabama,  1883.    75  Ala.  464.) 

SoMERViivLK,  J.^^  The  purpose  of  the  present  bill  is  to  claim  the 
benefit  of  certain  mortgages  and  other  collateral  securities  placed  in 
the  hands  of  Lehman,  Durr  &  Co.  by  one  Thomas  B.  Dryer,  in  the 
latter  part  of  the  month  of  March,  in  the  year  1881.  Dryer  was  in- 
debted to  complainants  for  advances  made  to  him  during  that  year,  and 
also  for  antecedent  debts  aggregating  about  two  thousand  dollars,  and 
based  on  previous  transactions.  The  theory  of  the  bill  is,  that  there 
was  an  express  agreement  made  by  Dryer,  during  his  life-time,  that  the 
old,  or  pre-existing  debt  should  be  paid  out  of  these  securities.  The 
whole  question  is  as  to  the  existence  of  such  an  agreement.  It  is  not 
contended  that  such  a  contract  was  made  with  the  deceased  in  person, 
but  only  with  his  authorized  agents.     *     *     * 

It  is  claimed,  however,  that  this  agreement  was  authorized  by  one 
Felts,  who  acted  under  a  written  power  of  attorney  executed  by  Dryer, 
and  bearing  date  March  28th,  1881.  The  testimony  shows  very  con- 
clusively, that  Felts  did  assent  to  such  an  arrangement,  claiming  his 
authority  under  a  certain  power  of  attorney,  which  was  at  the  time 
exhibited  to  the  other  contracting  parties.  But  this  was  a  joint  power 
of  attorney,  given  to  W.  G.  Campbell,  M.  B.  Swanson  and  W.  W. 
Felts,  authorizing  the  three  to  act  as  agents  in  this  transaction  jointly. 
Such  a  power  conferred  upon  several  can  not  be  exercised  by  one 

21  Part  of  the  opinion  is  oniitted. 


Ch.3) 


EXECUTION  OF  THE  AUTHORITY 


481 


^ 


alone,  at  least  in  the  case  of  private  agencies.     It  is  required  that  all 
must  act  together  jointly  in  the  execution  of  such  an  agency.     Cald-.-' 
well  V.  Harrison,  1 1  Ala.  755 ;  Story  on  Agency,  §  42 ;  Evans  on  Agen-I 
cy  (Ewell's  Ed.)  *32." 

Xor  could  such  a  trust  be  delegated  by  one  of  such  agents  to  another. 
The  principal  is  supposed  to  rely  upon  the  personal  integrity  and  ability 
of  each  of  his  selected  agents,  these  qualifications  constituting  the  rea- 
son of  the  trust.    Hence,  the  maxim  applies,  "Delegatus  non  delegare/ 
potest."    Story  on  Contr.  §  127. 

We  are  satisfied  from  the  testimony  that  neither  Campbell  nor 
Swanson  concurred  with  Felts  in  the  execution  of  this  power.  They 
were  not  personally  present  at  the  time,  and  are  not  satisfactorily  shown 
to  have  afterwards  assented  to  what  he  did  in  the  attempted  execu- 
tion of  their  joint  authority.  The  power  was  not,  therefore,  legally  ex- 
ecuted, and  the  contract  made  by  Felts,  acting  alone,  conferred  no  lien 
in  favor  of  the  complainants  upon  the  proceeds  of  the  various  collateral 
securities  placed  by  Dryer  in  the  hands  of  Lehman,  Durr  &  Co. 

We  see  nothing  in  the  record  authorizing  us  to  infer  that  any  other 
person  or  persons  had  authority  from  the  deceased  either  to  make  or 
to  ratify  the  contract  attempted  to  be  made  between  Felts  and  the  com- 
plainants, as  stated  in  the  bill. 

The  decree  of  the  chancellor  is,  in  our  judgment,  free  from  error, 
and  it  is  affirmed. 


U  / 


GUTHRIE  v.  ARMSTRONG. 

(Court  of  King's  Bench,  1822.    5  B.  &  Aid.  628,  1  D.  &  R.  248,  7  E.  C.  L.  34.3.) 

Assumpsit  against  the  defendant  as  underwriter  on  a  policy  of  insur- 
ance. Plea,  general  issue.  At  the  trial  at  the  last  assizes  for  North- 
umberland before  Bayley,  J.,  a  question  arose  as  to  the  execution  of 
the  policy  by  the  defendant.  In  order  to  prove  this,  a  power  of  attor- 
ney signed  by  the  defendant  was  produced,  by  which  he  constituted 

22  If  the  power  Is  piven  to  A.  <&  B.  as  partners,  either  may  act  for  the  part- 
nership. Oordon  v.  Buchanan.  1."'.  Tcnn.  (.'5  Ycrp.)  71  (1^33):  Doakin  v.  TTn- 
fhTwood,  .37  Minn.  OS,  :',:',  N.  W.  ."{is.  H  Am.  St.  Ucp-  ■'^-7  (ISST).  If  all  the 
1olnt  atr<-nts  consent,  then  one  may  act  for  all.  Bobbins  v.  Hor>?an,  192  .Mass. 
44.''.,  7.S  N.  E.  .".O:'.  (n»0<i). 

IT  tlie  authority  shows  an  intent  fliat  part  of  the  agents  shall  act.  then 
Joint  execution  Is  not  necessary.  <'eil;ir  ilMpids  &  St.  P.  B.  To.  v.  Stewart. 
2r)  Iowa.  115  (ISCS). 

When  the  power  is  of  a  iiublie  nature,  a  majority  may  act.  if  all  deliberated 
or  had  an  oiiporlunity  to  do  so.  Patterson  v.  I.eavilt.  t  Coun.  oO,  IP  .\m.  I>ee. 
J>S  (ISL'l),  r-itiiiK  To.  F,ltt.  Jsllt.  Kspeeially  ill  matters  ministerial.  In  re  P.al- 
tlnirtn-  Turnpike,  .'")  P.in.  4M  (isi.'!).  Tin-  sanio  rule  applies  to  n  committee  of 
•  llreetors  of  a  ec.ripnration.  McNeil  v.  Boston  C.'liamber  of  Conunen-e,  lol 
Mass.  277,  28  N.  E.  21.').  13  I>.  B.  A.  .'(.'.9  dspl).  It  is  enough  if  a  meeting  liasi 
been  lield  which  all  mi'^'lit  liave  atten<led,  and  wliich  a  majority  did  atlendj 
and  tlie  aet  was  decided  upon  a  majfirlty  vole.  Kesiiateb  Line  of  Packet>J 
V.  I'.ellamy  .Mfg.  Co.,  12  N.  II.  20.",  .".7  Am.  Dec.  203  (isjl). 
(;oi)ii.Pii.i\:  A. — .".1 


482  TiiK  Ai  riioKiTY  (Part  2 

fifteen  persons,  there  iiaiued.  "liis  true  and  lawful  attorneys,  jointly  and 
separately  for  him,  ami  in  his  name,  to  sign  and  underwrite  all  sueh 
polieies  of  insuranee.  as  they  his  said  attorneys  or  any  of  them  should 
jointly  and  separately  think  proiier."  The  policy  was  executed  for 
the  defendant,  by  four  of  the  persons  named  in  the  power  of  attor- 
ney. The  learned  judge  thought  this  a  sut^cient  execution  of  the  pow- 
er, but  reserved  the  point.    The  pl.iintiff  having  obtained  a  verdict. 

J.  Williams  moved  to  enter  a  nonsuit.  This  was  a  naked  authority, 
and  must  he  construed  strictly.  In  Viner's  Abridgment,  title  Au- 
thority, B.  PI.  7,  it  is  laid  dow^n  thus :  "If  a  letter  of  attorney  to  make 
livery  of  seizin  conjunctim  et  divisim  be  made  to  three  and  two  of 
them  make  livery,  the  third  being  absent,  it  is  not  good,  for  this  is  not 
conjunctim  nor  divisim."  And  Com.  Dig.  Attorney,  C.  11,  is  exactly 
to  the  same  elTect.  And  in  Co.  Litt.  181b,  it  is  stated,  "If  a  charter 
of  feoffment  be  made,  and  a  letter  of  attorney  to  four,  or  three,  jointly 
or  severally  to  deliver  seizin,  two  cannot  make  livery,  because  it  is 
neither  by  the  four  or  three  jointly,  nor  any  of  them  severally."  Here, 
the  power  is  to  fifteen  jointly  or  severally,  and  it  is  neither  executed 
by  the  whole  jointly,  nor  by  one  of  them  severally.  The  latter  words, 
"or  any  of  them,"  only  apply  to  the  persons  who  are  to  exercise  the 
discretion,  but  they  have  no  reference  to  the  authority  itself. 

Abbott,  C.  J.  The  law  undoubtedly  is  as  stated  by  Mr.  Williams, 
but  we  are  not  disposed  to  extend  the  rule  further.  Whenever  a 
case  exactly  similar  to  those  cited  shall  occur,  the  Court  will  feel  itself 
bound  by  them.  But  in  this  case  we  ought  to  look  at  the  whole  instru- 
ment :  and  if  we  do  so,  there  is  no  doubt  what  the  meaning  of  it  is. 
Here,  a  power  is  given  to  fifteen  persons  jointly  and  severally  to  ex- 
ecute such  policies  as  they  or  any  of  them  shall  jointly  or  severally 
think  proper.  The  true  construction  of  this  is,  as  it  seems  to  me,  that 
the  power  is  given  to  all  or  any  of  them  to  sign  such  policies,  as  all  or 
any  of  them  should  think  proper.  The  argument  is,  that  the  latter 
words  only  apply  to  the  persons  who  are  to  exercise  the  discretion. 
That  would  have  been  quite  correct,  if  those  had  been  different  from 
the  persons  entrusted  with  the  power.  But  they  are  the  same;  these 
latter  words,  therefore,  control  the  meaning  of  the  former,  and  the 
verdict  is  right. 

Rule  refused. 


Ch.  4)  DELEGATION  OF  THE  AUTUORITY  i&J 

CHAPTER  IV 
DELEGATION  OF  THE  AUTHORITY 


SECTION  1.— GENERAL  RULE 


CATLIN  V.  BELL. 

(Nisi  Prius  in  King's  Bench,  1815.    4  Camp.  183.) 

This  was  an  action  of  assumpsit  for  not  accounting  for  goods  de- 
livered by  the  plaintiff  to  the  defendant,  to  be  sold  on  her  account. 

The  defendant  is  master  of  a  ship  trading  from  this  country  to  the 
West  Indies,  and  the  plaintiff  entrusted  to  him  a  quantity  of  millinery 
goods,  which  he  undertook  to  sell  for  her  there. 

The  first  defense  was,  that  these  goods  had  paid  no  duty  on  exporta- 
tion ;  and  it  was  proved  that  the  defendant's  ship,  in  which  they  were 
carried,  cleared  out  at  the  custom-house  in  ballast.  It  was  contended, 
therefore,  that  the  adventure  was  illegal,  and  that  no  action  could  arise 
out  of  it. 

Lord  Ellexborougii.  You  do  nothing  unless  you  show  that  it 
formed  part  of  the  agreement  between  the  parties  to  defraud  govern- 
ment of  the  duties.  This  would  contaminate  the  contract  on  which  the 
action  is  founded ;  but  it  cannot  be  affected  by  the  simple  circumstance 
of  the  ship  clearing  out  in  ballast. 

It  was  then  stated,  that  the  defendant  not  being  able  to  sell  the 
goods  in  the  island  to  which  they  were  destined,  had  sent  them  to  the 
Caraccas,  in  search  of  a  market,  where  they  had  been  destroyed  by  an 
earthquake ;  but 

Lord  EllKNBoroucii  clearly  laid,  that  there  being  a  special  con- 
fidence reposed  in  the  defendant  with  respect  to  the  sale  of  the  goods, 
he  had  no  right  to  hand  them  over  to  another  person,  and  to  give  them 
a  new  destination.^ 

1  The  same  principle  hns  often  been  ni>i)lio(l  to  puhllc  nKonts  nnd  cspocinlly 
to  lionnls  .'iiifl  ofTifcrs  of  cities  nnrl  the  state.  "It  Is  of  flic  greatest  pnlilic 
iiupurtaiu'*'  fi)  cstaltlish  the  ^'eiierai  rule  of  agency,  tiiat  'delcLiated  !nilii<)rity 
cannot  he  (le!e;:iite(l  at'alii,  wltlioiit  sin-cial  ii(t\v<'r  so  to  do,'  as  ptveriiiii;,'  the 
olHfiiil  powers,  acts  and  contracts  of  our  st.-ite  ollicers."  Lyon  v.  .lerome,  1!<! 
Wend.  4.S.'..  'M  Am.  Dec.  L'71  (ISIl);  M.-ilthews  v.  Alexandria.  (IS  Mo.  11.-..  ::(► 
Am.  Itei).  77«;  MSTS);    O.ale  v.   KMlaiii.'i/.oo.  L'."!   Mich.  .'Ml.  U  Am.   Kcp-  ^0  (ISTIt. 


^ 


4.84  TiTK  AUTiKMUTY  (Part  2 

BONWELL  V.  ITOWKS. 

(Common  Tloas  of  Now  York  City  and  County,  1SS8.     15  Daly,  43,  2  N.  Y. 
Supp.  717,  rovcrslns  1  N.  Y.  Siipp.  435.) 

Action  to  recover  commissions  as  a  real  estate  broker.  Judgment 
for  plaintiff,  aflirmed  by  the  General  Term.    Defendant  again  appeals. 

Van  HoKSEN,  J.  The  motion  for  a  dismissal  of  the  complaint 
ought  to  have  been  granted.  It  appeared  that  the  defendant  never 
employed  the  plaintiff's  assignor,  never  knev^^  of  such  employment 
until  after  the  exchange  of  the  two  pieces  of  property  had  been  ef- 
fected, and  never  authorized  or  ratified  such  employment.  Of  these 
facts,  there  cannot  be  any  question.  The  evidence  adduced  by  the 
plaintiff  showed  that  Rogers,  the  plaintiff's  assignor,  knew  that  Reuben 
W.  Howes  was  acting  as  the  agent  for  his  son,  John  T.  Howes,  the 
defendant,  in  selling  the  Tenth  Avenue  property ;  and  that  not  until 
after  the  property  had  been  exchanged  for  the  Haberman  property, 
in  Fourth  avenue,  did  Rogers  ever  have  the  slightest  communication, 
directly  or  indirectly,  with  the  defendant.  There  is  no  testimony  to 
prove  that  the  defendant  was  previously  aware  of  Rogers'  employ- 
ment. Upon  this  state  of  facts,  the  court  should  have  granted  the 
motion  to  dismiss  the  complaint.  Reuben  W.  Howes,  who  employed 
Rogers,  was  himself  an  agent  to  sell,  and,  as  such,  he  had  no  right 
or  power  to  employ  a  subagent,  or  to  bind  the  defendant  by  an  agree- 
ment that  the  subagent  should  receive  a  commission.  Atlee  v.  Fink, 
75  Mo.  100,  42  Am.  Rep.  385. 

It  was  said  by  one  of  the  justices  of  the  city  court  that  the  testi- 
mony established  the   fact  that  it   was  customary   in   New  York  to 
employ  brokers  to  sell  property.    That  is  true,  but  irrelevant ;  because 
the  question  here  is,  has  one  agent  any  authority  to  employ  another? 
No  proof  on  that  subject  was  offered.     I  understand  the  rule  to  be_ 
f         that  "except  where  necessity  requires,  or  a  known  usage  of  trade- 
justifies,  the  employment  of  subagents,  an  agent  whose  duties  involve_ 
personal  trust  and  confidence  and  the  exercise  of  judgment  and  disz 
cretion,  cannot,  without  authority  from  his  principal,  delegate  to  an- 
other the  confidence  and  discretion  reposed  in  him.^     He  may  employ 
another  to  perform  mere  mechanical  acts,  but  nothing  else.     Lewis 
V.  Ingersoll,  3  Abb.  Dec.  60.     The  jury  probably  regarded  Reuben 
W.  Howes  as  the  real  owner  of  the  property,  and  believed  they  were 
doing  substantial  justice  in  requiring  the  nominal  owner,  who  holds 

\^        2  The  maxim,  "delegatus  non  potest  delegare,"  is  based  on  the  fact  that 

\        agency  is  generally  a  personal  trust  and  confidence  which  cannot  be  delegated; 

for  the  principal  employs  the  agent  from  his  opinion  of  his  personal  skill 

\       and  integrity,  and  the  latter  has  no  right  to  turn  his  principal  over  to  another 

\      of  whom  he  knows  nothing.     Wilson  v.  York  &  Md.  Line  K.  Co.,  11  Gill  &  J. 

\      58  (1S.30),  quoting  2  Kent's  Com.;    Warner  v,  Martin,  11  How.  209,  18  L.  Ed. 

Cfil  {IH'^O).    The  distinction  between  what  may  and  what  may  not  be  delegated 

bv  an  agent  is  clearly  stated  and  illustrated  in  Kohl  v.  Beach,  107  Wis.  400, 

M  N.  W.  057,  50  L.  R.  A.  OW,  81  Am.  St.  liep.  840  (1900). 


Ch.  4)  DELEGATION  OF  THE  AUTHORITY  485 

real  estate  in  his  name,  to  pay  the  debt  that  the  real  owner  contracted. 
But  the  testimony  shows  that  Rogers  knew  that  Reuben  W.  Howes 
was  dealing  in  the  character  of  an  agent.  If  he  wished  to  hold  the 
principal  he  ought  to  have  ascertained  that  Reuben  had  authority 
to  employ  a  subagent,  or  else  he  should  have  required  some  instruc- 
tions from,  or  had  some  communication  with,  the  defendant.  Hard 
cases  ought  not  to  make  bad  law ;  and  I  am  of  opinion  that  it  would 
be  dangerous  to  permit_oneagent  to  employ  another  at  the  expense 
of  the  principal. 

"'TJpon  a  new  trial,  it  may  be  shown  that  the  principal  knew  that 
Reuben  W.  Howes  intended  to  employ,  or  had  employed,  a  broker 
to  assist  him,  and  that  he  approved  of  the  employment.  Judgment 
reversed,  and  new  trial  ordered,  with  costs  to  abide  event. 


SECTION  2.— EXCEPTIONS 


ELDRIDGE  v.  HOLWAY. 

(Supreme  Court  of  Illiuois,  1857.     18  111.  445.) 

Forcible  detainer  before  a  justice.  Plaintiff  authorized  one  Cobb 
to  begin  the  action  for  him,  and  Cobb  had  one  Kates  serve  written 
notice  and  demand  of  possession  on  defendant.  Evidence  to  prove 
this  being  excluded,  the  jury  found  for  the  defendant. 

ScaTes,  C.  J.  An  attorney  in  fact  of  plaintiff  employed  an  attor- 
ney at  law  in  this  case,  who  served  the  written  notice  and  demand 
of  possession.  The  court  excluded  this  evidence,  on  the  ground  that 
delegated  authority  cannot  be  delegated. 

This  is  true  as  a  general  principle,  when  properly  applied  to  the 
classes  of  cases  where  personal  confidence  is  reposed,  and  skill,  judge- 
ment, etc.,  are  involved.  Story  on  Agency,  §§  12,  13,  14.  It  was. 
doubtless,  to  obviate  this  literal  application  of  the  principle  that  the 
convention,  out  of  abundant  caution,  inserted  clause  17  of  section  8, 
art.  1,  in  the  Constitution  of  the  United  States,  3  Story,  Com.  Const. 
§§  1236,  1237.  Some  powers  arise,  by  implication,  as  incidents  to 
others,  and  are  essential  to  their  exercise.  So,  in  the  performance 
of  a  general  or  special  agency,  many  acts  are  to  be  performed  of  an 
indifferent  nature,  which  may  as  well  be  done  by  one  person  as  an- 
other, and  which  an  agent  might  find  it  extremely  inconvenient  to 
be  compelled  to  perform  personally.  The  maxim  withholding  tbc 
power  of  subdclcgation  of  authority  only  has  place  when  there  is 
an  object,  an  end  to  be  gained — where  the  interest  of  the  principal 
may  be  neglected  or  injured  li\   --ubsiitution.     When,  from  the  nature 


•1S()  TiiK  Ari'iiouri'Y  (Part  2 

of  the  act  to  be  clone,  there  can  he  no  ihlVerenoc,  (he  |)rineiiile  cannot 

apply. 

Such  is  the  case  here.  There  is  neither  confuleme.  skill,  discre- 
tion or  juilgnient  reiiuired  in  (leli\er  a  written  notice,  and  make  oath 
of  it,  which  coulil  prevent  the  employment  of  any  one  by  an  agent. 
The  service  of  declarations  in  ejectment,  notices  to  take  depositions, 
and  a  great  variety  of  acts  now  done  by  attorney's  clerks  and  others, 
would  fall  under  the  same  rule  contended  for,  and  compel  attorneys 
to  do  such  acts  personally. 

An  attorney  may  serve  such  notice  and  demand,  and  we  perceive 
no  reason  why  an  agent,  to  bring  suit,  may  not  employ  an  attorney. 
Agents,  as  such,  cannot  appear  in  courts  for  parties.  Where  agents 
are  not  licensed  as  attorneys,  they  must  employ  attorneys  to  appear 
for  the  client  in  the  courts. 

The  act  here  falls  strictly  within  a  class  which  may  be  done  by 
such  supposed  subdelegation.  It  is  rather  the  true  and  only  mode 
of  acting  out  an  agency  where  an  attorney  becomes  necessary,  than  a 
^ubdelegation  of  power. 

Had  the  agency  here  been  an  attorneyship,  it  might  present  another 
question — one  involving  a  question  of  confidence  reposed,  or  skill  and 
judgment — which  could  not  be  transferred.  But  the  agency  does  not 
appear  to  be  of  that  character.^ 

Judgment  reversed  and  cause  remanded. 


NORWICH  UNIVERSITY  v.  DENNY. 

(Supreme  Court  of  Verinout,  1874.     47  Vt.  13.) 

Assumpsit  on  a  subscription  of  $200  to  induce  the  location  of  plain- 
till  University  at  Norwich.     Verdict  for  plaintiff. 

Barrett,  J.  The  liability  of  the  defendant  for  the  sum  claimed 
depended  on  the  subscription  of  his  name  to  the  paper  presented.  If 
his  name  was  put  there  by  his  authorization,  then  he  is  liable ;  if  not 
by  his  authorization,  then  he  is  not  liable.  Whatever  authorization 
was  given,  he  gave  to  Dr.  Nichols.  The  question  of  fact  in  contro- 
versy in  the  jury  trial  was,  whether  the  defendant  gave  such  author- 
ization to  Dr.  Nichols.  That  was  determined  by  the  jury  upon  legit- 
imate evidence,  with  proper  instructions  by  the  court.  It  is  shown 
and  agreed  that  the  defendant's  name  was  put  there  by  the  procure- 
ment of  Dr.  N.,  pretending  to  act  in  virtue  of  authority  from  the 
defendant. 

It  is  now  insisted  that  Dr.  N.  could  not  delegate  such  authority, 
so  as  to  enable  another  to  make  a  binding  subscription  of  the  defend- 

«  When  the  transaction  has  been  fully  agreed  upon,  and  there  remains  a 
mere  executive  authority  to  receive  the  property  and  pay  over  the  money,  the 
agf?nc-y  may  be  as.sij;ned.     Grinnell  v.  Buchanan,  1  Daly.  538. 


Ch.  4)  DELEGATION  OF  THE  AUTHORITY  487 

ant's  name.  This  cannot  be  maintained.  It  is  matter  of  entire  in- 
difference for  any  purpose  or  reason  by  what  hand  the  name  was 
written;  provided  it  was  done  by  the  procurement  of  Dr.  N.  under 
and  in  execution  of  the  authority  given  by  the  defendant  to  him. 
He  might  as  well  do  it  by  the  fingers  of  another  person,  as  by  the 
pen  of  another  person.  He  was  not  delegating  any  authority,  but  only 
performing  an  authorized  act  by  a  servant,  instead  of  doing  it  w^ith 
his  own  hand.  It  was  the  act  of  his  mind  and  will,  and  was  an  ef- 
fectual doing  by  him  of  the  act  he  was  authorized  to  do. 

It  differs  entirely  from  cases  in  which  the  person  is  authorized  to 
do  things  requiring  the  exercise  of  that  person's  judgment  and  dis- 
cretion, which  can  be  exercised  only  by  the  person  himself.  An  ar- 
bitrator cannot  delegate  his  function  to  another;  but  having  heard 
and  decided  as  arbitrator,  he  can  have  another  person  draw  up  his 
award  and  put  his  name  to  it,  instead  of  doing  it  himself.  So  in  this 
case,  Dr.  N.  could  execute  the  authority  conferred  on  him  by  the  de- 
fendant, by  procuring  another  to  use  the  pen  under  the  direction  of 
his  own  mind  and  will,  instead  of  using  the  pen  himself.* 

Judgment  affirmed. 

LOUISVILLE  &  N.  R.  CO.  v.  BLAIR." 

(Court  of  Chancery  of  Tennessee,  1S73.  1  Teun.  Ch.  351.) 
Bill  to  call  to  account  and  to  hold  defendant  Blair  and  his  sureties 
on  his  bond  for  deficiencies  in  the  accounts  of  the  Nashville  Agency 
of  plaintiff.  The  business  was  large  and  varied,  the  freight  bills  dur- 
ing the  period  in  question  amounting  to  $863,834.01.  Blair  was  sta- 
tion agent. 

COOPKR,  Ch."  *  *  *  It  has  been  left  to  be  inferred  from  the 
large  deficiency  that  there  must  have  been  negligence.  And  this  is  true, 
but  the  negligence  seems  to  have  been  at  the  Louisville  office  to  which 
the  cashier,  whose  duty  it  was,  made  the  regular  returns.  If  that 
office  had  been  vigilant,  and  called  the  attention  of  their  station  agent 
to  the  increasing  deficiency,  and  he  had  failed  to  take  the  proper  steps 
to  prevent  it,  he  would  have  been  clearly  guilty  of  neglect  of  duty. 
But  it  does  appear  that  the  defendant,  Blair,  was  not  expected  to  keep 
the  books  and  was  not  a  book-keeper,  and  it  also  appears  that  the 
books  were  kept,  the  freight  bills  received  and  handed  out,  the  freights 

«  The  cases  go  on  wlicfhtT  tlu-  (l<-I«'U:iti«>n  bo  of  n  (liscrctioii.  Newton  v. 
Bronson,  l.'{  N..Y.  HST.  <i7  Am.  I )«•(■.  h'.J  (1S.-.4);  Weaver  v.  Carn.-ill.  .T.  .VrU. 
19S  37  Am.  Hop.  2'2  (1S7!M  (where  the  agent  was  a  mere  amanuensis).  An 
Insuranee  agfiit  may  del. -gate  to  another  tlie  mere  signing  of  liis  name  to  a 
rKiiiey  he  has  apl'ioVed,  (irady  v.  Am.  Cent.  Ins.  Co..  tj(»  >[ii.  IKi  (ls7rii:  Jmt 
not  tlie  power  to  pass  upon  applifatlons,  Cnllinan  v.  l',owl<er.  Iso  N.  Y.  li:!,  71! 
N.  E.  1(1 1  n'.»04). 

B  Acrord:  Kansct  v.  fJarden  Cy.  St.  I'-ank,  'Jl  S.  D.  lilS,  VS.',  N.  W.  GSO  (lUOU), 
and  cases  Hted. 

n  Part  of  file  oj)iiiioii   is  omitted. 


JjA 


4SS  THE  AUTHORITY  (Part  2 

received  from  the  collector  and  reniiiicd  by  the  casliicr.  These,  there- 
fore, were  specially  his  duties.  He  was  employed  by  the  company  and 
reported  to  it,  although  in  the  name  of  the  agent.  It  is  not  shown 
that  the  station  agent  was  expected  to  examine  these  accounts,  unless 
his  attention  was  called  to  them  by  the  mother  oBice.  I  am  of  opin- 
ion, consequently,  that  the  complainants  have  failed  to  make  out  a  case 
against  defendants  on  the  bond. 

But  I  am  also  clearly  of  opinion  that  the  defendant,  Blair,  was  not 
bound  for  the  faults  of  either  the  cashier  or  collector,  unless  he  was 
cognizant  of  them,  or  connected  with  them,  of  which  there  is  no  pre- 
tence in  this  case.  These  agents  were  employed  and  paid  by  the  com- 
plainant, and  were,  as  the  testimony  shows,  absolutely  necessary  to  the 
discharge  of  the  duties  of  the  agency.  In  such  a  case,  it  is  a  matter 
of  no  consecjuence  whether  the  sub-agent  was  appointed  on  the  recom- 
mendation of  the  chief  agent,  or  appointed  directly  by  him  with  the 
sanction  of  the  principal.  In  all  cases  of  this  sort,  where  the  sub- 
agency  is  required  by  the  exigency  of  the  business  or  is  authorized  by 
the  principal,  the  agent  will  not  be  responsible  for  the  negligence  or 
misconduct  of  the  sub-agent,  if  he  has  used  reasonable  diligence  in  his 
choice  as  to  the  skill  and  ability  of  the  sub-agent.  Story  on  Agency, 
§§  201,  217a,  321.  It  is  neither  charged  nor  shown  that  the  persons 
employed  as  cashier  and  collector  in  this  case  were  not  good  men,  and 
of  unexceptionable  character  when  employed ;  or,  in  other  words,  that 
the  defendant,  Blair,  knew  that  they  were,  for  any  reason,  unfit  for  the 
discharge  of  the  duties  to  which  they  were  assigned. 

I  am  of  opinion,  therefore,  that  the  complainant  has  wholly  failed  to 
make  out  any  case  against  the  defendants ;  and  order  that  the  bill  be 
dismissed  w^ith  costs. 

Note. — This  decision  was,  upon  appeal,  affirmed. 


BLOWERS  V.  SOUTHERN  RY. 

(Supreme  Court  of  South  Carolina,  1906.    74  S.  C.  221,  54  S.  E.  368.) 

Action  by  a  mail  messenger  to  recover  for  services  in  transferring 
mail  matter  from  one  train  to  another  for  a  period  of  six  years.  There 
was  evidence  that  he  did  the  work  under  the  supervision  of  the  station 
agent  of  defendant,  w'ho,  when  Irwin  ceased  doing  .,  "'ork,  hired 
another  man  to  do  it.    Judgment  for  plaintiff  and  defendant  appeals. 

Jones,  J.''  *  *  *  An  exception  is  taken  to  the  following 
charge :  "I  charge  you,  further,  as  a  matter  of  law,  if  the  station  agent 
was  authorized  by  any  superior  officer  who  had  authority  to  make  this 
contract  and  he  was  carrying  out  the  orders  of  his  superior  officer  and 
made  a  contract  that  w'ould  be  within  the  scope  of  his  authority,  and 

7  Part  of  the  opinion  is  omitted. 


Ch.  4)  DELEGATION  OF  THE  AUTHORITY  489 

the  railroad  agent,  if  he  is  acting  under  the  direction  or  by  the  author- 
ity of  a  superior  officer  who  had  power  and  whose  duty  it  was  to  attend 
to  these  matters  and  make  such  contracts,  if  he  acted  under  his  orders 
and  direction,  then  the  acts  of  the  agent  here  would  be  acts  of  the  su- 
perior officer."  The  specifications  of  error  being:  (1)  That  an  agent 
or  officer  to  whom  authority  is  delegated  cannot  delegate  the  authority 
to  another.  (2)  There  was  no  evidence  that  any  superior  officer  of  de- 
fendant company  was  authorized  to  make  a  contract  with  plaintiff  to 
transfer  the  mail. 

We  are  not  sure  from  the  record  but  that  this  charge  was  made  at 
the  request  of  the  defendant,  and,  if  so,  defendant  cannot  raise  objec- 
tion thereto.  But,  assuming  that  the  charge  was  not  made  at  the  re- 
quest of  defendant,  we  see  nothing  in  it  prejudicial  to  defendant's  con- 
tention. The  principle  delegatus  non  potest  delegare  does  not  apply 
when  there  is  express  or  implied  authority  in  the  general  or  superior 
agent  to  employ  subagents  in  the  work  of  the  principal.  "Where  an 
agent  has  power  to  employ  a  subagent,  the  acts  of  the  subagent,  or  no- 
tice given  in  the  transaction  of  the  business,  have  the  same  effect  as  if 
done  or  received  by  the  principal."  Bates  v.  American  Company,  Z7 
S.  C.  101,  16  S.  E.  883,  21  L.  R.  A.  340.  The  authority  to  employ  sub- 
agents  may  be  implied  from  the  nature  of  the  duties  and  powers  com- 
mitted to  the  general  agent.     1  Ency.  Law,  981. 

In  this  case  the  superior  agent  and  the  alleged  subagent  were  both 
engaged  in  the  work  of  the  principal  in  the  matter  of  transportation, 
and  the  subagent  from  the  nature  of  his  position  and  duties  was  under 
the  direction  and  supervision  of  the  superior  agent  in  the  matter  of 
mail  transportation  when  it  became  a  part  of  the  principal's  business. 
Under  such  circumstances,  if  the  subagent  acts  under  the  orders  of  a 
superior  officer,  his  acts  become  the  acts  of  the  superior  officer  and  the 
principal  as  well.  There  was  some  evidence  that  the  general  super- 
intendent of  transportation  had  control  of  the  matter  of  mail  transfer 
and  in  the  direction  and  supervision  of  mail  transfer  clerks,  as  already 
indicated.     *     *     ♦ 

Reversal,  unless  the  plaintiff  within  thirty  days  remits  part  of  the 
judgment,  which  the  c         found  to  be  excessive. 

\ 


DARLING  V.  STANWOOD. 
(Supreme  JiuUclal  Court  of  Massachusetts,  1867.     00  Mass.   [14  Allonl  504.) 

Contract  to  recover  a  balance  of  account  for  money  expended  and 
commissions  charged  in  purchasing  cotton  for  defendant.  Verdict  for 
plaintiff. 

FosTKR,  J."  When  the  defendant  employed  the  plaintiff  to  buy  cot- 
ton on  his  account  in  the  New  Orleans  market  and  to  ship  it  to  Boston, 

•  Part  of  the  opinion  Is  omitted. 


L.  V^V 


•tiH)  TIIK    AUTIIOUITY  (Part  2 

ho  is  prcsuiiioil  to  have  contcniphilod  that  the  ]Mirchascs  would  he  made 
in  the  onliiiary  eourse  of  sueh  husiuess  at  tliat  port.  L^pon  the  question 
whether  the  phiintitT  is  liahle  in  ihunaoes  for  negligently  or  improper- 
ly exeeuting  sueh  a  eommission,  the  evidence  of  the  usages  of  the  cot- 
ton trade  were  clearly  admissihle,  especially  as  it  appears  that  the  de- 
fendant himself  was  well  acquainted  with  them.  The  employment  of  a 
hroker  to  elTect  the  jnn-chases  was  a  juslifiahle  delegation  of  authority 
to  a  suh-agent,  hecause  this  manner  of  transacting  husiness  was  the 
usual  and  known  custom  of  the  New  Orleans  market.  The  statement 
that  the  seller  of  the  cotton  is  understood  to  warrant  that  the  cotton  is 
sound  at  the  time  of  sale  seems  to  have  been  a  part  of  the  narrative 
given  by  the  witnesses  of  the  course  of  the  business ;  and  not  an  at- 
tempt to  prove  by  custom  a  warranty  in  a  case  where  none  would  be 
implied  by  law.  ■w!t-#i^-<-^  i<-it/^y 

In  a  business  which  requires  or  jusfifies  the  delegation  of  an  agent's 
authority  to  a  sub-agent,  who  is  not  his  own  servant,  the  original  agent 
is  not  liable  for  the  errors  or  misconduct  of  the  sub-agent  if  he  has 
used  due  care  in  his  selection.  The  instructions  of  the  presiding  judge 
seem  to  have  been  conformable  to  law  and  well  adapted  to  the  case 
disclosed  by  the  bill  of  exceptions.     *     *     * 

Exceptions  sustained  on  another  question. 


SKINNER  &  CO.  V.  WEGUELIN  EDDOWES  &  CO. 

(Queen's  Bench  Division  of  the  High  Court  of  Justice,  1882.     1  Cabab§  & 

ElUs,  12.) 

Action  to  recover  £474  collected  on  insurance  on  a  ship  by  defend- 
ant's Paris  agent,  for  plaintilT,  and  not  paid  over. 

Day,  J.  The  doctrine  has  always  been,  that  if  I  employ  an  agent 
to  do  work  for  me,  and  he  employs  a  sub-agent,  the  agent  remains 
responsible  to  me.  On  the  facts  I  am  clearly  of  opinion  that  the  de- 
fendants are  responsible  to  the  plaintiffs  for  the  money  received  by  M. 
Magniol.    Judgment  accordingly. 


BRADSTREET  v.  EVERSON. 

(Supreme  Court  of  Penn.sylvania,  1872.     72  Pa.  124,  13  Am.  Rep.  665.) 

Action  to  recover  money  collected  by  defendant's  Memphis  agent, 
and  by  him  misappropriated.  Verdict  for  plaintiff,  and  defendant  re- 
moved the  verdict  to  the  supreme  court  upon  error. 

Agxew,  J.9  *  *  *  -pj-ig  next  question  is  upon  the  nature  of 
the  liability  arising  upon  the  receipt.     It  is  in  the  following  words: 

9  Part  of  the  opinion  is  omittecL 


Ch.  4)  DELEGATION    OF    THE    AUTIIOUITY  49X/ 

"J.  M.  Bradstreet  &  Son,  Improved  Mercantile  Agency.  Pittsburg, 
June  2d,  1865.  Received  of  -Messrs.  Everson,  Preston  &  Co.  four 
duplicate  acceptances  for  collection,  versus  Watt  C.  Bradford,  Mem- 
phis, Tennessee,  amounting  in  all  to  $1,726.37.  [Signed]  J.  M.  Brad- 
street  &  Son."  -  :  -ji-^  _  yo^uiitt,?  / 

It  is  argued,  notwithstanding  the  express  receipt  "for  collection," 
that  the  defendants  did  not  undertake  for  themselves  to  collect,  but 
only  to  remit  to  a  proper  and  responsible  attorney,  and  made  them- 
selves liable  only  for  diligence  in  correspondence,  and  giving  the  neces- 
sary information  to  the  plaintiffs ;  or  in  briefer  terms,  that  the  attorney 
in  Memphis  was  not  their  agent  for  the  collection  but  that  of  the  plain- 
tiffs only.  The  curj;^ent  of  decision,  however,  is  otherwise  as  to  attor- 
neys at  law  seiKTing  claims  to  correspondents  for  collection,  and  the 

Teasons  for  applying  the  same  rule  to  collection  agencies  are  even 
stronger.  They^haye  their  selected  agents  in  every  part  of  the  coun- 
try. From  the  nature  of  such  ramified  institutions  we  must  conclude 
tliat  the  public  impression  will  be,  that  the  agency  invited  customers 
on  the  veVy  ground  of  its  facilities  for  making  distant  collections.     It 

Hriust  be  presumed  from  its  business  connections  at  remote  points,  and 
its  knowledge  of  the  agents  chosen,  the  agency  intends  to  undertake  the 
performance  of  the  service  which  the  individual  customer  is  unable  to 
perform  for  himself.  There  is  good  reason  therefore  to  hold,  that  such 
an  agency  is  liable  jor  collections  made  by  its  own  agents,  when  it 

-mr^Ftakes  the  collection  by  the  express  terms  of  the  receipt.     If  it 

"do'es  not  so  intend,"  it  has  it  in  its  power  to  limit  responsibility  by  the 
terms  of  the~receipt. 

""^Xirexample  of  this  limited  liability  is  found  in  the  case  of  Bullitt  v. 
Baird  [27  Leg.  Int.  171],  decided  at  Philadelphia  in  1870;  the  only 
case  in  this  state  upon  the  subject  of  such  agencies.  There  the  receipt 
read :  "For  collection  according  to  our  direction,  and  proceeds,  when 
received  by  us,  to  be  paid  over  to  King  &  Baird."  Across  the  face  of 
the  receipt  was  printed  these  words:  "N.  B.  The  owner  of  the  within 
mentioned  taking  all  the  risks  of  the  mail,  of  losses  by  failure  of  agents 
to  remit,  and  also  of  losses  by  reason  of  insurrection  or  war."  The 
limitation  of  the  liability  of  Bullitt  &  Fairthorn,  by  Mr.  Bullitt,  him- 
self a  good  lawyer,  is  evidence  of  his  belief  that  a  greater  liability 
would  arise  without  the  restriction. 

Recurring  to  the  analogy  of  attorneys  at  law,  the  first  point  to  be 
considered  is  the  interpretation  given  by  the  courts  to  the  terms  of  a 
receipt  "for  collection."  In  our  own  state  we  have  several  decisions  in 
point.  In  Rifldle  v.  I'oorman,  3  Pen.  &  W.  224,  Riddle,  an  attorney  in 
Franklin  county,  gave  a  receipt  in  these  words:  "Lodged  in  my  hands 
a  judgment-bill  granted  by  Henry  H.  Morwitz  to  Menry  IlolTinan  for 
the  sum  of  $1.2fX),  due  with  interest  since  the  15th  of  May  1811,  which 
is  entered  u])  in  I'.edford  county,  which  I  am  to  have  recovered  if  it  can 
be  accomplished."      Kiddle  sent  this  bill  to  his  brother,  a  practising 


n^yf-  (I^i.Um^i 


I 


I/, 


102  Till-:  AUTiK^KiTY  (Part  2 

lawyer  in  Bedford.  Tlio  niouc}'  was  made  liy  the  slierifT,  hut  by  the 
neglect  of  the  Bedford  Riddle  was  not  received  from  the  sherilT,  who 
became  insolvent,  and  the  money  w^as  thns  lost.  llolTman  sued  the 
I'Vanklin  county  Riddle,  on  his  receipt  and  recovered.  On  a  writ  of 
error  it  was  contended  that  the  words  of  the  receipt,  "which  I  am  to 
have  recovered  if  it  can  he  accomi)lished,"  imported  only  a  limited  un- 
dertaking to  have  it  collecte^l  by  another,  and  not  to  collect  it  himself. 
I'-ut  this  court  held  that  the  receipt  contained  an  express  and  positive 
undertaking  for  the  collection  of  the  money,  if  practicable,  and  not 
merely  for  the  emjiloymcnt  of  another  to  that  end ;  and  that  the  de- 
fendant was  bound  by  every  principle  of  moral  and  legal  obligation  to 
make  good  the  collection  of  the  judgment  by  the  application  of  reason- 
able diligence,  skill  and  attention. 

The  next  case  is  Cox  v.  Livingston,  2  Watts  &  S.  103,  37  Am.  Dec. 
486.  This  was  the  receipt :  "Received  of  Mr.  Thos.  Cox,  of  Lancaster, 
Pa.,  for  collection,  a  note  drawn  in  his  favor  by  Mr.  Dubbs,  calling  for 
$497.65,  payable  three  months  after  date."  The  note  was  left  with  an 
instruction  to  bring  suit.  The  receipt  was  dated  August  30th,  1837, 
and  Livingston  died  in  January  following  without  having  brought  suit. 
Dubbs  became  insolvent.  It  was  held  that  Livingston  was  liable  for 
the  collection,  though  only  two  terms  intervened  between  the  receipt 
and  his  death. 

Krause  v.  Dorrance,  10  Pa.  462,  51  Am.  Dec.  496,  was  assumpsit 
against  two  attorneys  for  money  collected  and  not  paid  by  another 
attorney  to  whom  they  sent  the  note  for  collection.  The  liability  of  the 
original  attorneys  for  the  collection  was  admitted,  but  the  point  was 
made  and  succeeded,  that  a  demand  before  suit  was  necessary.  Rogers, 
J.,  says  expressly  they  were  liable  for  the  acts  of  the  agent  whom  they 
employed,  but  being  without  fault  themselves,  a  demand  was  necessary 
before  a  resort  to  an  action. 

In  Rhines  v.  Evans,  66  Pa.  192,  5  Am.  Rep.  364,  the  receipt  was: 
"Received  for  collection  of  A.  Rhines  one  note  on  Lukens  &  Beeson, 
of  Rochester,  dated  October  30th,  1857,  for  $365."  The  liability  of 
Evans,  the  attorney  was  conceded,  and  the  question  was  on  the  Statute 
of  Limitations,  and  it  was  held  the  action  was  barred  by  the  lapse  of 
seven  years  and  five  months  from  the  date  of  the  receipt. 

These  cases  show  the  understanding  of  the  bench  and  bar  of  this 
state  upon  a  receipt  of  claims  for  collection.  It  im]iorts  an  under- 
taking by  the  attorney  himself  to  collect,  and  not  merely  that  he  re- 
ceives it  for  transmission  to  another  for  collection,  for  whose  negli- 
gence he  is  not  to  be  responsible.  He  is  therefore  liable  by  the  very 
terms  of  his  receipt  for  the  negligence  of  the  distant  attorney,  who  is 
his  agent,  and  he  cannot  shift  responsibility  from  himself  upon  his 
client.  There  is  no  hardship  in  this,  for  it  is  in  his  power  to  limit  his 
responsibility  by  the  terms  of  his  receipt  when  he  knows  he  must  em- 
ploy another  to  make  the  collection.     Bullitt  v.  Baird,  su])ra. 

We  find  cases  in  other  states  holding  the  same  doctrine.     In  Lewis 


Ch.  4)  DELEGATION  OF  THE  AUTHOIUTY  -id'S 

&  Wallace  v.  Peck  &  Clark,  10  Ala.  142,  both  firms  were  attorneys. 
The  defendants  gave  their  receipt  to  the  plaintiflFs  for  certain  notes  for 
collection,  and  after  collecting  the  money  transmitted  it  to  the  payees 
in  the  notes  instead  of  the  attorneys  who  had  employed  them,  the 
payees  having  however  endorsed  the  notes :  Held  that  Peck  &  Clark 
were  liable  to  their  immediate  principals,  the  plaintitTs,  there  being  no 
evidence  that  the  payees  had  given  them  notice  not  to  pay  over  to 
Lewis  &  \\'allace,  the  original  attorneys.  This  is  a  direct  recognition 
of  the  liability  of  the  collecting  attorney  to  the  transmitting  attorney. 
■J'he  case  of  Pollard  v.  Rowland,  2  Blackf.  22,  is  more  directly  in  point. 
Rowland  received  from  Pollard  claims  for  collection,  and  sent  them  to 
Stephen,  an  attorney  in  another  county.  Stephen  obtained  judgment, 
and  collected  the  money :  Held  that  Rowland  was  accountable  to  Pol- 
lard for  the  acts  of  Stephen  to  the  same  extent  that  Stephen  was,  and 
could  make  no  defence  that  Stephen  could  not;  and  that  Rowland  was 
liable  to  Pollard  for  the  money.  Cummins  v.  AIcLain  et  al.,  2  Pike, 
402,  was  a  case  nearly  similar  to  the  Pennsylvania  case  of  Krouse  v. 
Dor  ranee,  supra.  The  attorney^"  sent  the  claim  to  another  attorney  at 
d  distance,  and  was  held  liable,  but  for  the  omission  of  the  plaintiff  to 
make  a  demand,  he  failed  to  recover.  The  court  say  the  attorney  is 
liable  for  the  acts  of  the  attorney  he  employs.  In  a  Mississippi  case 
two  attorneys,  Wilkison  and  Willison,  received  of  plaintiff  a  claim  for 
collection,  and  brought  suit  and  obtained  judgment.  They  dissolved 
partnership,  Wilkison  retiring  from  the  practice;  and  Willison  took 
another  partner,  Jennings,  who  received  the  money  from  the  sheriff. 
In  a  suit  against  Wilkison  as  surviving  partner  of  Willison,  he  was 
held  liable  for  the  receipt  of  the  money  by  Jennings.  Wilkinson  v. 
Griswold,  12  Smedes  &  M.  669. 

In  A'iew^f  these  reasons  and  authorities,  we  hold  that  a  collecting 
agency,  such  as  the  defendants  have  been  found  to  be,  receiving  and 
rernjtting  a  claim  to  their  own  attorney,  who  collects  the  money  and 
fails  to  pay  it  over,  is  liable  for  neglect. 

Judgment  affirmed.  ! 


SIMPSON  v.  WALDBY. 

(Supromo  Court  of  MichiRan,  188(5.     63  MIcli.    J.W,  .'lO  N.  W.  199.) 

Action  against  defendants,  as  bankers,  for  the  proceeds  of  drafts 
collected  by  defendant's  correspondent,  the  First  National  Bank  of 
St.  Albans,  Vermont.  The  latter  sent  its  own  New  York  draft  for 
the  money,  but  failed  before  the  draft  was  paid.  Verdict,  no  cause 
of  action. 

i*)'!'!)!'  linliility  of  nn  nttorncy  iif  liiw  for  collcclirjiis  iiiihIc  liy  n  suluicrnt 
Is  nbly  tr«'jil«'(l  In  the  IratliiiK  cast-  of  ("iiiiiinliiij  v.  llcald.  lil  Kan.  000,  .'JO  .\m. 
lU'\t.  i;r,4  (isso),  Miul  of  u  collection  aKeiu-y  in  Hoover  v.  Wi.se,  91  U.  S.  ■'tos. 
2.';  L.  Ed.  :','.Y2  (1870). 


I'.'t  Tin:  AUTHORITY  (Part  2 

MoKSK.  T.''^  *  *  *  'p],^>  ct)uuscl  for  tUfoiulants  contond  here, 
as  thov  dill  liolow.  ili.ii  in  ilic  case  of  collcclioiis,  like  this,  where 
liierc  is  no  special  at;reeineiit,  the  home  liank  is  only  rcsponsihle  for 
the  use  of  onliiiarv  care  anil  prudence  in  the  selection  of  the  agencies 
through  which  it  attcniiits  the  collection.  This  is  undoubtedly  the 
purport  and  meaning  of  the  instructions  of  the  court  below,  taken 
as  a  whole,  to  the  jury. 

The  question  is  therefore  directly  before  us,  what  is  the  law  of  the 
case  when  a  person  steps  into  a  bank,  in  the  ordinary  course  of  busi- 
ness dealing,  and  intrusts  to  it  the  collection  of  a  draft  drawn  upon 
some  person  residing  at  a  distance,  in  case  the  home  bank,  through 
tile  failure  or  dishonesty  of  another  bank,  selected  by  itself,  never 
receives  the  money  upon  such  drafts,  though  the  same  is  paid  by  the 
drawee?  In  the  absence  of  any  agreement  in  regard  to  the  matter, 
who  must  bear  the  loss  in  case  the  home  bank  has  not  been  at  fault 
in  the  selection  of  its  agent  or  agents? 

There  is  a  conflict  of  authority  upon  this  proposition ;  and,  as  it 
has  never  been  settled  in  this  state,  we  must  be  guided  and  governed 
in  our  action  by  what  seems  to  us  the  most  correct  view  in  justice  and 
on  principle. 

It  is  held  in  New  York,  Indiana,  Ohio,  and  New  Jersey  that  the 
home  bank  must  be  the  loser,  upon  the  principle  that  such  bank  under- 
takes the  collection  of  the  draft  or  bill,  and  selects  its  agent  or  agents, 
and  must  be  responsible  for  their  default  or  neglect,  as  it  would  be 
for  the  default  or  neglect  of  its  officers  or  clerks  in  the  collection  of 
a  home  bill,  or  as  a  contractor  would  be  bound  to  answer  for  any  neg- 
ligence or  default  of  his  subcontractors  or  workmen  in  the  perform- 
ance of  his  contract.  Allen  v.  Merchants'  Bank  of  New  York,  22 
Wend.  215,  34  Am.  Dec.  289;  Reeves  v.  State  Bank  of  Ohio,  8  Ohio 
St.  460;  Titus  v.  Mechanics'  Nat.  Bank,  35  N.  J.  Law,  588;  Ayrault 
V.  Pacific  Bank,  47  N.  Y.  570,  7  Am.  Rep.  489;  Abbott  v.  Smith, 
4  Ind.  452;    Tyson  v.  State  Bank,  6  Blackf.  225,  38  Am.  Dec.  139. 

In  other  states  it  is  adjudged  that  the  customer  depositing  the  draft 
for  collection  must  be  presumed  to  know,  and  contract  upon  the  knowl- 
edge, that  in  the  ordinary  course  of  business  the  home  bank  must 
employ  correspondents  or  agents  abroad  to  make  the  collection  and 
transmit  the  money  collected.  The  holder  or  maker  of  the  draft, 
having  full  notice  of  the  usual  course  of  business,  must  be  held  to 
assent  thereto.  "He  therefore  authorizes  the  bank  with  whom  he  deals 
to  do  the  work  of  collection  through  another  bank."  "The  bank  re- 
ceiving the  paper  becomes  an  agent  of  the  depositor,  with  authority 
to  employ  another  bank  to  collect  it.  The  second  bank  becomes  the 
subagent  of  the  customer  of  the  first,  for  the  reason  that  the  customer 
authorizes  the  employment  of  such  agent  to  make  the  collection." 
If,  therefore,  there  is  no  want  of  ordinary  care  and  prudence  in  the 


11  Part  of  the  opiiiiun  Is  omitted. 


(4,  ir]-kwr^ 


Im^ 


Ch.  4)  DELEGATION  OF  THE  AUTHORITY  495 

selection  of  the  subagent,  and  no  negligence  or  fault  on  the  part  of  the 
home  bank,  the  customer  must  be  the  loser  for  the  default  or  negli- 
gence of  such  subagent  who  is  regarded  as  his  agent.  Guelich  v. 
National  St.  Bank  of  Burlington,  56  Iowa,  434,  9  N.  W.  328,  41  Am. 
St.  Rep.  110;  Dorchester  &  Milton  Bank  v.  New  England  Bank,  1 
Cush.  177;  East  Haddam  Bank  v.  Scovil,  12  Conn.  303;  Hyde  v. 
Planters'  Bank,  17  La.  560,  36  Am.  Dec.  621 ;  .Etna  Ins.  Co.  v.  Alton 
City  Bank,  25  111.  243,  79  Am.  Dec.  328;  Stacy  v.  Dane  Co.  Bank, 
12  Wis.  702;  Bowling  v.  Arthur,  34  i\liss.  41 ;  Citizens'  Bank  v.  How- 
ell, 8  Md.  530,  63  Am.  Dec.  714;  Bank  of  Washington  v.  Triplett, 
1  Pet.  25,  7  L.  Ed.  37 ;  Daly  v.  Butchers'  &  Drovers'  Bank,  56  Mo. 
94,  17  Am.  Rep.  663 ;  Jackson  v.  Union  Bank,  6  Har.  &  J.  146;  Bank 
of  Louisville  v.  First  Nat.  Bank  of  Knoxville,  8  Baxt.  101,  35  Am. 
Rep.  691 ;   Morse,  Banking,  347-356. 

Nearly  all  the  cases  cited  above,  in  support  of  both  sides  of  the 
question,  relate  to  transactions  by  which  the  draft  or  bill  failed  of 
collection  by  neglect  of  the  notary  to  make  demand  in  time,  or  proper 
protest,  or  default  of  the  agent  in  not  moving  quick  enough  to  make 
the  money. 

In  the  case  at  bar  the  draft  was  collected  of  the  drawee,  and  the 
loss  of  the  money  resulted  from  the  failure  of  the  St.  Albans  Bank, 
before  the  collection  of  its  draft  transmitting  such  money  to  defend- 
ants. If  defendants  were  negligent  or  in  fault  in  not  immediately 
forwarding  such  draft  to  New  York,  upon  its  reception  by  them,  or 
in  its  presentation  there,  they  are,  in  my  opinion,  liable  to  plaintiff 
for  the  money;  but,  if  there  was  no  negligence  in  either  of  these 
respects,  the  question  arises,  who  must  bear  the  loss  on  account  of 
the  inability  of  the  St.  Albans  Bank  to  meet  its  draft  transmitting 
the  money? 

In  Reeves  v.  State  Bank  of  Ohio,  supra,  it  is  held  lliat  when  a 
bank  in  Ohio  received  for  collection  a  draft  payable  in  New  York, 
and  for  that  purpose  forwarded  the  same  to  its  correspondent  in  New 
York,  such  Ohio  bank  was  responsible  to  the  owner  of  the  draft  for 
the  conduct  of  such  corres])ondcnt,  and  for  the  proceeds  of  the  draft 
immediately  upon  its  collection  by  such  correspondent ;  that  such  cor- 
respondent was  the  agent  of  the  Ohio  bank,  and  not  the  subagent  of 
the  owner  of  the  draft,  and  payment  to  the  agent  was  payment  to 
the  bank,  unless  there  was  some  agreement  or  authority  between  the 
owner  and  the  bank  beyond  the  mere  fact  of  the  draft  being  received 
for  collection. 

In  Mackersy  v.  Ramsays  (in  the  House  of  Lords)  9  Clark  &  F. 
818,  the  same  doctrine  is  maintained.  Mackersy  employed  bankers 
in  Edinburgh  to  obtain  for  him  payment  of  a  bill  drawn  upon  a  per- 
son in  Calcutta.  The  bankers  accepted  the  employment,  and  wrote 
him,  promising  to  credit  him  with  the  money  when  received.  They 
transmitted  the  bill,  in  the  usual  course  of  business,  to  bankers  in 
London,  and  by  them  it  was  forwarded  to  India,  where  it  was  duly 


M  /^■v^a 


4l)G  THK  AUTiiouiTr  (Part  2 

paid.  Tlic  bank  in  India  Uiat  collected  the  money  failed,  and  the 
Edinburgh  bankers  did  not  receive  it.  They,  however,  v^rote  to  the 
drawer  of  the  bill,  announcing  the  fact  of  its  payment,  but  never 
actually  credited  him  with  the  amount  thereof  on  their  books.  Held, 
that  the  Edinburgh  bankers  were  the  agents  of  the  drawer  to  ob- 
tain payment  of  the  bill;  that,  payment  having  been  actually  made, 
they  became  ipso  facto  liable  to  him  for  the  amount  received,  and  that 
he  could  not  be  called  upon  to  suffer  any  loss  occasioned  by  the  con- 
duct of  their  subagents,  between  whom  and  himself  there  existed  no 
privity.  In  56  Iowa,  and  9  N.  W.  32S,  supra,  an  attempt  is  made  to 
distinguish  this  case,  on  the  ground  that  the  decision  was  based  upon 
the  fact  that  the  Edinburgh  bank  expressly  undertook  to  forward 
the  paper,  and  upon  its  payment  to  place  the  amount  thereof  to  the 
credit  of  the  depositor,  and  for  the  performance  of  its  undertaking 
it  was  to  receive  a  commission,  and  that,  upon  such  a  contract,  the 
bank  would  be  bound  to  give  him  credit  when  it  was  paid  to  its  cor- 
respondent, and  therefore  became  directly  liable  to  the  customer.  But 
the  commission  charged  was  only  the  usual  one  among  bankers,  and 
banks  generally  have  a  commission  on  collections ;  in  the  case  at  bar 
it  being  35  cents  on  each  $100,  which  was  divided  between  defendants 
and  the  St.  Albans  Bank.  Besides,  the  opinions,  both  of  Lord  Camp- 
bell and  Lord  Cottenham,  delivered  in  the  house  of  lords,  were  placed 
upon  the  broad  ground  that  the  Edinburgh  bank  was  liable  for  the 
conduct  of  the  bank  in  India,  the  same  as  it  would  have  been  for  the 
default  or  neglect  of  one  of  its  own  officers  or  clerks  in  the  collection 
of  a  home  bill,  and  that  its  correspondents  were  its  agents,  and  not 
the  agents  of  the  drawer  of  the  bill,  who  had  no  privity  with  such 
correspondents;  and  that  the  correspondence  between  the  Edinburgh 
bankers  and  such  drawer,  if  it  proved  any  special  contract,  established 
only  such  an  agreement  as  the  law  would  have  inferred  from  the  deal- 
ings between  the  parties. 

The  ruling  in  that  case  squarely  covers  the  point  in  issue  here,  and 
to  my  mind  is  the  better  doctrine,  and  most  in  accord  with  principle. 
The  learned  jurists  holding  otherwise  all  admit  that,  if  a  person  in- 
trusts a  home  draft  or  bill  to  a  bank  for  collection,  such  bank  is  re- 
sponsible to  the  customer  for  any  negligence  or  default  of  its  agents, 
officers,  or  employes.  I  cannot  see  why  any  different  rule  should 
prevail  in  the  collection  of  a  foreign  bill.  It  is  in  every  case  that  I 
have  examined  sought  to  be  maintained  upon  the  theory  that  the  cus- 
tomer knows  the  bank  must  act  through  some  other  person  or  persons 
at  a  distance,  and  therefore,  impliedly,  from  the  very  nature  of  the 
course  of  business,  assents  to  the  employment  of  such  persons,  and 
makes  them  his  agents. 

This  reasoning  does  not  strike  me  as  sound.  If  I  leave  an  indorsed 
note  against  persons  in  my  own  town  for  collection,  and  consequent 
demand  and  protest,  I  know  that  some  agent  or  employe  of  the  bank 
will  do  the  work,  or  some  part  of  it,  and  I  do  not  know  or  inquire 


Ch.  4)  DELEGATION  OF  THE  AUTHORITY  497 

who  will  do  it.  I  contract,  however,  with  the  bank  that  suitable  agents 
will  be  employed,  and  hold  it  responsible  for  their  acts.  The  law 
authorizes  me  to  do  this.  If  I  intrust  the  same  bank  with  the  collec- 
tion of  a  foreign  draft,  I  also  know  that  they  will  employ  some  agent 
or  correspondent  abroad,  of  their  selection,  not  mine,  of  whom  I  know 
nothing,  and  with  w^hom  they  are  supposed  to  have  business  relations. 
I  do  not  inquire  whom  they  are  to  select.  I  presume,  and  have  a 
right  to  presume,  that  they  have  business  knowledge  of  such  agent 
or  agents,  which  I  do  not  and  cannot  possess,  by  the  very  course  of 
their  dealings  as  bankers.  In  each  case  the  bank  holds  itself  out,  for 
a  consideration,  to  collect  my  paper,  and  it  can  make  no  difference 
whether  the  compensation  is  great  or  small.  In  each  case  it  selects 
its  own  agents  in  the  premises.  In  each  case  I  have  no  part  in  or 
control  over  such  selection.  In  each  case  there  is  no  privity  between 
the  party  selected  and  myself.  I  fail  to  perceive  why,  in  the  one  case 
more  than  the  other,  I  adopt  the  immediate  party  collecting  or  pro- 
testing the  bill  as  my  agent.  I  cannot  find  any  good  reason  for  mak- 
ing this  particular  case  of  the  collection  of  a  foreign  bill  an  exception 
to  the  general  rule  of  agency.  The  law  in  general  "is  clear  that, 
by  the  employment  of  under  agents  or  servants  for  his  own  conven- 
ience, or  to  perform  part  of  w^hat  he  has  contracted  to  do,  the  em- 
ployer becomes  civilly  responsible  to  those  with  whom  he  contracts 
or  deals  in  his  business." 

Judge  Story,  in  his  work  on  Agency,  announces  the  doctrine  thus : 
"It  is  a  general  doctrine  of  law  that  the  principal  is  held  liable  to 
third  persons,  in  a  civil  suit,  for  the  frauds,  deceits,  misrepresenta- 
tions, torts,  negligence,  and  other  malfeasances  or  misfeasances,  or 
omissions  of  duty  of  his  agent  in  the  course  of  his  employment,  al- 
though the  principal  did  not  authorize  or  justify,  or,  indeed,  know  of, 
such  misconduct." 

In  no  other  case  that  I  can  recall  is  a  person  presumed,  by  im- 
plication of  law,  without  any  agreement  to  do  so,  to  adopt  the  sub- 
agent  of  a  person  with  whom  he  deals  as  his  own.  The  carrier  is 
responsible  for  the  negligence  of  his  agents  and  employes,  as  is  also 
the  ship-owner  and  the  contractor.  Why  this  distinction  in  the  case 
of  a  banker  or  bankers?  If  in  their  case,  why  should  it  not  also  be 
made  in  the  case  of  collecting  agents  and  attorneys?  But  collecting 
agents  and  attorneys  have  been  held  to  the  general  rule.  Pollard  v. 
Rowland,  2  Blackf.  22;  Hoover  v.  Wise,  91  U.  S.  308,  23  L.  Ed. 
392;  Bradstreet  v.  Everson,  72  Pa.  124,  13  Am.  Rep.  665;  Lewis 
V.  Peck,  10  Ala.  142. 

It  has  been  said  by  some  of  the  courts  that  the  holding  of  banks 
liable  for  the  default  and  neglect  of  their  correspondents  in  a  case 
like  the  present  would  render  the  collection  of  bills  and  drafts  of 
this  nature  extremely  ditlicult,  and  that  it  would  tend  very  nuuh  to 
destroy  the  facilities  which  at  present  exist,  and  subject  the  holders 
f;oiir).rn.&  .\. — .".'_' 


r 


VJS  TiiK  AUTUouiTY  (Tart  2 

of  bills  to  iiK-oiivciiiciu-e  and  expense,  and  iirobaMy,  in  many  eases. 
lo  serious  loss.  But  as  Ioul;-  as  banks  and  l)ankers  or  other  persons 
hold  themselves  out  to  eolleet  sueh  hills  or  drafts  for  a  eompensation, 
or  their  advantaj:;c,  they  ought  to  be  governed  by  the  same  rules  of  law 
that  apply  to  other  persons,  and,  if  they  wish  to  avoid  such  responsi- 
bility, it  is  very  easy  for  them  to  accept  such  business  only  upon 
a  special  agreement  as  to  their  duties  and  liabilities.  Failing  to  do  this, 
I  think  they  must,  in  taking  such  bills  or  drafts,  be  responsible,  as 
other  business  men  are,  for  the  misconduct  of  their  selected  agents  at 
home  or  abroad.'-^  *  *  * 
Judgment  revc*rscd,  and  a  new  trial  granted. 


BANK  OF  ROCKY  MOUNT  v.   FLOYD. 
(Supreme  Court  of  Nortli  Carolina,  190G.     142  N.  C.  187,  55  S.  E.  9.j.) 

Action  by  the  plaintiff  bank  against  Floyd,  the  Murchison  Bank, 
and  others,  to  recover  $1,059,  the  amount  of  a  check  drawn  on  the 
Dunn  Bank,  deposited  with  plaintiff'  bank  by  Floyd  for  collection, 
and  applied  at  once  to  his  account  to  be  charged  back  if  the  check  was 
not  paid.  Plaintiff  sent  the  check  to  the  Murchison  Bank,  and  it 
forwarded  it  to  the  Dunn  Bank,  which  failed,  and  the  proceeds  were 
never  paid  to  the  Murchison  Bank.  Judgment  against  the  Murchi 
son  Bank. 

CoxxoR,  J.^^  *  *  *  f  i^g  f^rst  question  presented  for  our  con- 
sideration is  the  duty  of  the  plaintiff  and  the  Murchison  Bank  to  the 

12  Tlie  leading  case  for  this  view  is  Excliange  Nat.  Bank  v.  Third  Nat.  Bank, 
112  U.  S.  276,  5  .Sup.  Ct.  141,  28  L.  Kd.  722  (18841.  Accord:  Arkansas.  Second 
Nat.  Bank  v.  Bank  of  Alma,  99  Ark.  386,  138  S.  W.  472  (1911) ;  Indiana,  Ty- 
son V.  St.  Bank.  G  Blackf.  225,  38  Am.  Dec.  139  (1842) ;  Louisiana,  Martin 
V.  Hihernia  Bank,  127  La.  301,  53  South.  572  (1910) ;  Minnesota,  Streissguth 
V.  Nat.  Germ.  Am.  Bank,  43  Minn.  50,  44  N.  W.  797,  7  L.  R.  A.  363,  19  Am. 
St.  Hep.  213  (1890):  Montana,  Power  v.  First  Nat.  Bank,  6  Mont.  251,  12 
I'ac.  597  (1887),  with  exhaustive  review  of  the  cases;  Nciv  Jersey,  Titus  v. 
Mechanics'  Nat.  Bank,  35  N.  J.  Law,  588  (1871);  Nciv  York,  Allen  v.  Mer- 
chants' Bank,  22  Wend.  215,  34  Am.  Dec.  289  (1839);  Ohio,  Reeves  v.  State 
Bank,  8  Ohio  St.  465  (1858) ;  England,  Mackersy  v.  Ramsays,  9  CI.  &  Fin. 
818,  850  (184.3). 

When  the  a^'ent  hank  expressly  stipulates  that  it  will  assume  no  liability 
for  defaults  of  its  suhagents,  it  can.  of  course,  only  he  held  for  its  own  mis- 
conduct. Cal.  Nat.  Bank  v.  T'tah  Nat.  Bank,  190  Fed.  31  s.  ill  C.  C.  A.  218 
(1911).  I->iually  if  the  agent  hank  expressly  assumes  lial)ility  for  the  corre- 
spondent it  must  respond  for  defaults  of  its  subagents.  Mechanics'  Bank  v. 
Earp.  4  Bvawle.  384  (1834);  Landa  v.  Traders'  I'.ank,  118  Mo.  App.  356,  94 
S.  W.  770  (1906). 

While  in  this  view  there  is  in  law  no  privity  between  the  principal  and  the 
suhagent,  yet  the  principal  has  an  equitable  right  to  i)ursue  his  property,  or 
it.s  proceeds,  in  the  hands  of  the  suhagent,  or  of  anyone  who  cannot  estab- 
lish his  right  against  the  true  owner,  on  the  grouml  that  he  is  a  bona  fid(! 
holder.  Naser  v.  First  Nat.  Bank,  116  N,  Y.  492,  27  N.  Y.  St.  Rep.  670,  22 
N.  E.  1077  (1889). 

13  Part  of  the  opinion  is  omitted. 


\.v. 


r 


Ch.  4)  DELEGATION    OF    TPIE    AUTIIOUITY  499 

owner  in  dealing  with  the  check.  While  there  is  a  diversity  of  opin- 
ion and  the  decisions  of  the. courts  are  not  uniform  upon  the  subject, 
this  court  in  Bank  v.  Bank,  75  N.  C.  534,  approved  and  adopted  the 
following  rule  of  conduct :  "It  is  well  settled  that  when  a  note  is  de- 
posited with  a  bank  for  collection,  which  is  payable  at  another  place, 
the  whole  duty  of  the  bank  so  receiving  the  note  in  the  first  instance 
is  seasonably  to  transmit  the  same  to  a  suitable  bank  or  other  agent 
at  the  place  of  payment.  And,  as  a  part  of  the  same  doctrine,  it  is 
well  settled  that,  if  the  acceptor  of  a  bill  or  promissory  note  has  his 
residence  in  another  place,  it  shall  be  presumed  to  have  been  intended 
and  understood  between  the  depositor  for  collection  and  the  bank  that 
it  was  to  be  transmitted  to  the  place  of  residence  of  the  promisor," 
or,  we  may  add.  drawee  or  payor.  In  an  opinion  expressed  with  his 
usual  force  and  clearness,  Bynum,  J.,  says:  "This  decision  is  conso- 
nant with  notions  of  justice."  This  case  has  been  recognized  as  con- 
trolling in  this  state,  and  we  think  is  sustained  by  the  weight  of  au- 
thority in  other  courts  and  the  reason  of  the  thing. 

Mr.  Morse,  in  his  work  on  Banks  &  Banking  (volume  1,  §  235), 
thus  states  the  law :  "When  the  paper  is  payable  in  some  other  place 
than  that  in  >vhich  the  bank  is  located,  its  duty  is  (1)  to  forward  the 
bill,  or  note,  or  check,  in  proper  season  to  a  subagent  selected  with 
due  care;  (2)  to  send  to  such  agent  any  instructions  bearing  upon 
its  duty  that  may  have  been  received  from  its  depositor ;  and  (3)  to 
make  inquiry  with  due  diligence  if  notice  of  the  arrival  of  the  paper 
does  not  come  to  it  within  such  time  as  it  might  reasonably  be  ex- 
pected." He  further  says:  "If  a  bank  fails  to  do  its  duty  in  the 
matter  of  collection  with  reasonable  skill  and  care,  it  is  liable  for  the 
damage  resulting  to  any  party  interested  in  the  paper,  whether  his 
name  appears  on  the  paper  or  not."     Section  252. 

It  is  conceded  that  there  is  much  diversity  of  opinion  and  decision 
in  respect  to  the  liability  of  the  receiving  bank  for  the  default  of  its 
subagent,  and  the  courts  of  the  several  jurisdictions  holding  variant 
views  proceed  upon  entirely  distinct  and  opposite  constructions  of 
the  implied  powers  conferred  upon  the  bank  first  receiving  the  col- 
lection. "If  a  bank  receive  a  paper  for  collection  on  a  party  at  a  dis- 
tant place,  the  agent  it  employs  at  the  place  of  payment  is  the  agent 
of  the  owner  and  not  of  the  bank;  and,  if  the  bank  selects  a  compe- 
tent and  reliable  agent  and  gives  proper  instructions,  its  responsibility 
ceases."  liank  v.  liank,  71  Mo.  App.  451.  The  two  rules  are  stated 
by  Mr.  Morse,  and  the  cases  classified,  with  a  discussion  of  the  rea- 
son upon  which  they  rest.     1   I>anks  &  l>anking,  §§  272-2S7. 

As  we  have  seen,  this  court  has  adojjicd  the  Massachusetts  rule, 
which  is  based  upon  the  following  satisfactory  reason  :  "The  employ- 
ment of  a  subagent  is  justifiable,  because  this  manner  of  conrlucting 
business  is  the  usual  and  known  custom,  and  in  a  business  which 
requires  or  justifies  the  delegation  of  an  agent's  authority  to  a  sub- 
agent,  who  is  not  his  own  servant,  the  original  agent  is  not  liable  for 


.~)(>0  THE  AUTiioiuTT  (Part  2 

the  errors  or  niisconcluct  of  the  subagent,  if  he  has  exercised  due  care 
in  the  selection."  Measured  by  this  standard,  there  can  be  no  doubt 
in  regard  to  the  conduct  of  the  plaintiiT  bank  in  sencUng  the  check 
to  defendant  Murchison  Bank;  its  standing  and  fitness  to  discharge 
the  duty  being  conceded.  His  honor  would  have  been  justified  in 
so  instructing  the  jury.  Measured  by  the  same  rule,  the  Murchison 
Bank  would  have  been  in  the  strict  line  of  its  duty  in  sending  its 
collection  to  its  correspondent  in  Dunn,  but  for  the  fact  that  the  Dunn 
Bank  was  the  drawee  of  the  check. 

This  brings  us  to  the  pivotal  question  in  the  case:  Is  the  drawee 
or  payee  of  a  bill,  note,  or  check  a  suitable  agent  to  which  such  paper 
should  be  sent  for  collection?  This  question  has  never  been  decided 
by  this  court;  hence  we  must  seek  for  an  answer  upon  the  reason 
of  the  thing,  the  general  principles  underlying  the  law  of  agency,  and 
adjudged  cases  in  other  jurisdictions.  By  accepting  the  collection 
from  the  plaintiff  bank  the  Murchison  National  Bank  became,  in  re- 
spect to  Floyd's  interest,  his  agent;  but,  as  the  amount  had  been 
credited  to  him,  the  plaintiff  was  entitled  to  the  proceeds.  In  this 
view  of  the  case  it  is  not  material  whether  the  Bank  of  Rocky  Mount 
was  the  proper  party  plaintiff,  as  all  of  the  persons  interested  were 
before  the  court  and  their  relative  rights  and  duties  presented  for 
adjustment. 

The  Missouri  Court  of  Appeals  in  Bank  v.  Bank,  supra,  in  an- 
swering the  question  presented  here,  says:  "It  was  negligence  to 
place  a  collection,  which  as  a  matter  of  business  required  prompt  at- 
tention, in  the  hands  of  the  debtor  to  collect  from  himself.  The  evi- 
dence here  discloses  the  impropriety  of  the  transaction.  The  defend- 
ant sent  the  check  to  Burr  Oak,  where  it  arrived  on  the  9th.  If  it 
had  sent  it  to  some  one  other  than  the  debtor,  it  would  undoubtedly 
have  been  paid,  since  the  bank  continued  to  do  business  and  meet  its 
obligations  on  the  9th  and  10th."  Morse  on  Banks,  §  236,  says: 
"The  debtor  cannot  be  the  disinterested  agent  of  the  creditor  to  col- 
lect the  debt,  and  it  cannot  be  considered  reasonable  care  to  select  an 
agent  known  to  be  interested  against  the  principal  to  put  the  latter 
into  the  hands  of  its  adversary.  Surely  it  is  not  due  care  in  one 
holding  a  promissory  note  for  collection  to  send  it  to  the  debtor,  trust- 
ing him  to  pay,  delay,  or  destroy  the  evidence  of  debt  as  his  conscience 
permits.  If  this  would  not  be  reasonable  care  and  diligence,  why 
should  the  same  conduct  be  held  to  be  reasonable  care  and  diligence 
when  applied  to  a  bank?"  citing  Bank  v.  Packing  &  Prov.  Co.,  117 
111.  100,  7  N.  E.  601,  57  Am.  Rep.  855.  To  the  same  effect  are  all  of 
the  authorities  to  which  we  have  been  cited  and  which  we  find  in  our 
investigation. 

The  law  is  well  stated  in  Ger.  Nat.  Bank  v.  Burns,  12  Colo.  IW, 
21  Pac.  714,  13  Am.  St.  Rep.  247,  in  which  it  is  said:  "Even  if  we 
can  conceive  of  such  anomaly  as  one  bank  acting  as  the  agent  of  Rr.i- 


Ch.  4)  DELEGATION  OF  THE  AUTHORITY  501 

Other  to  make  a  collection  against  itself,  it  must  be  apparent  that 
the  selection  of  such  an  agent  is  not  sanctioned  by  businesslike  pru- 
dence and  discretion.  How  can  the  debtor  be  the  proper  agent  of  the 
creditor  in  the  very  matter  of  collecting  the  debt?  His  interests  are 
all  adverse  to  those  of  his  principal.  If  the  debtor  is  embarrassed, 
there  is  the  temptation  to  delay.  *  *  *  The  fact  that  the  L.  Bank 
was  a  correspondent  of  the  defendant  to  a  limited  extent  does  not 
alter  the  rule.  *  *  *  As  a  matter  of  law  such  method  of  doing 
business  cannot  be  upheld.  It  violates  every  rule  of  diligence."  In 
Bank  V.  Goodman,  109  Pa.  428,  2  Atl.  687,  58  Am.  Rep.  728,  it  is 
said:  "Such  suitable  agent  must,  from  the  nature  of  the  case,  be 
some  one  other  than  the  party  who  is  to  make  the  payment."  Auten, 
Receiver,  v.  Bank,  67  Ark.  243,  54  S.  W.  337,  47  L.  R.  A.  329;  1 
Dan.  Neg.  Inst.  328.  In  Farley  Nat.  Bank  v.  Pollock,  145  Ala.  321, 
39  South.  612,  2  L.  R.  A.  (N.  S.)  194,  117  Am.  St.  Rep.  44,  8  Ann. 
Cas.  370,  the  same  principle  is  announced,  and  in  the  note  it  is  said : 
"The  American  cases  are  almost  unanimous  in  support  of  the  doctrine 
that  it  is  negligence  in  a  bank  having  a  draft  or  check  for  collection 
to  send  it  directly  to  the  drawee."  The  annotator  gives  a  long  list  of 
authorities  sustaining  this  proposition. 

The  defendant  Murchison  National  Bank,  however,  insists  that  it 
has  shown  that  the  custom  or  usage  prevails  by  which  a  bank,  hav- 
ing a  check  upon  its  own  correspondent  in  good  standing,  may  in- 
trust it  with  the  collection.  The  same  point  has  been  frequently  made 
and  almost  uniformly  met  with  the  declaration  that  such  custom,  if 
shown  to  exist,  is  invalid.  In  this  connection  it  is  said  by  the  Court 
of  Appeals  of  Missouri,  in  Bank  v.  Bank,  supra:  "It  was  said  to  be 
customary  for  banks  to  transmit  collections  to  their  correspondent, 
even  though  such  correspondent  was  the  debtor.  To  this  we  answer 
that  it  is  not  a  reasonable  custom,  and  therefore  must  fail  of  recogni- 
tion by  the  courts.  We  concede  it  may  be,  and  perhaps  is,  in  many 
instances,  the  most  convenient  mode  for  the  bank  intrusted  with  the 
collection.  But,  if  the  bank  adopts  that  mode,  it  takes  upon  itself 
the  risk  of  the  consequences." 

In  Min.  S.  &  Door  Co.  v.  Metropolitan  Bank,  76  Minn.  136,  78 
N.  W.  980,  44  L.  R.  A.  507,  77  Am.  St.  Rep.  609,  the  court  says: 
"We  cannot  agree  with  counsel  that  the  usage  and  custom  here  relied 
upon  as  a  defense  to  the  claim  that  the  defendant  was  negligent  when 
forwarding  this  check  to  the  Mapleton  Bank  for  presentation  and 
payment,  as  a  general  usage  and  custom  will  not  justify  negligence. 
It  may  be  adniilled  that  such  a  course  is  freciuently  adopted,  but  it 
must  be  at  the  risk  of  the  sender,  who  transmits  the  evidence  upon 
which  the  right  to  demand  payment  dei)en(ls  to  the  party  who  is  to 
make  the  payment.  Such  a  usage  and  custom  is  opposed  to  the  pol- 
icy of  the  law,  unreasonable,  and  invalid."  In  Farley  Nat.  Bank  v. 
Pollock,  supra,  Simpson,  J.,  says:  "A  custom  must  be  reasonable, 
and  the  best-considered  cases  hold,  not  only  that  the  bank  or  party 


ji)2  TiiK  AUTHORITY  (Part  2 

who  is  to  pay  the  paper  is  not  the  proper  person  to  whom  the  paper 
should  be  sent  for  colleetion,  but  also  that  a  eustom  to  that  effect  is  un- 
reasonable and  bad."  The  same  rule  is  laid  down  in  the  notes,  and  a 
number  of  cases  cited  to  sustain  it.  Morse  on  Banks,  §  230/*  *  *  * 
No  Error. 

!■«  Atvonl.  as  to  transmission  to  the  drawee  liank  for  collection:  Minne- 
apolis Sasli  &  Door  Co.  v.  Metropolitan  Hank,  7(>  Minn.  i:>(i,  7S  X.  W.  '.)S0, 
44  L.  U.  A.  504.  77  Am.  St.  Kep.  000  (1800) ;  Merchants"  Nat.  liauk  v.  Good- 
man, 100  Ta.  4212,  2  Atl.  0S7,  08  Am.  Kep.  728  (188;"))  ;  Am.  E.\ch.  Rank  v. 
Metropolitan  Nat.  Bank,  71  Mo.  App.  451  (1807).  Cf.  Wilson  v.  Carliiiville 
Nat.  Hank,  187  111.  222,  58  N.  K.  2.50,  52  L.  K.  A.  032  (1000).  When  the  paper 
is  sent  by  the  airent  to  the  debtor  for  collection  in  accordance  with  the  in- 
strnctions  of  the  principal,  there  is  of  conrse  no  liability  if  the  debtor  fails 
(0  pay.  First  Nat.  15ank  v.  Citizens'  Sav.  Bank,  12o  Mich.  :y.M,  82  N.  W.  00, 
48  L.'r.  a.  583  (1000).  ^      ^ 

A  leatUng  case  for  the  view  that  a  collecting  bank  is  not  liable  for  the  de- 
faults of  a  sub-asieut  is  Fabens  v.  Mercantile  Bank,  23  I'ick.  330,  34  Am. 
Dec.  50  (18391.  Accord:  Vonnccticut,  Lawrence  v.  Stoninjiton  Bank,  0  Conn. 
521  (1827);  lUhiois,  .Etna  Ins.  Co.  v.  Alton  City  Bank,  25  111.  243,  79  Am. 
Dee.  328  (1801):  lona,  Guelich  v.  Nat.  St.  Bank,  50  Iowa,  434,  9  N.  W.  328, 
41  Am.  Rep.  110  (1881).  a  leading  case;  Kansas,  Bank  of  Lindsborg  v.  Ober, 
31  Kan.  509.  3  Pac.  324  (1884);  Kentucky,  Falls  C'y  Woolen  Mills  v.  Louis- 
ville Nat.  Banking  Co.,  145  Ky.  04,  140  S.  W.  00  (1011);  Marijland,  Jackson 
V.  Union  Bank.  0  liar.  &  J.  140  (1823) ;  Massachusetts,  Dorchester  Bank  v. 
New  England  Bank,  1  Cu.sh.  177,  180  (1848);  Mississippi,  Tiernan  v.  Com. 
Bank,  7  How.  &4S,  40  Am.  Dec.  S3  (1843);  Missouri,  Landa  v.  Traders'  Bank, 
118  Mo.  App.  350.  94  S.  W.  770  (1900) ;  yebraska.  First  Nat.  Bank  v.  Sprague. 
34  Neb.  318.  51  N.  W.  846,  15  L.  II.  A.  408,  .33  Am.  St.  Rep.  644  (1892) ;  North 
Carolina.  Blanters'  Bank  v.  First  Nat.  Bank,  75  N.  C.  534  (187<)) ;  Pennsyl- 
vania. Mechanics'  Bank  v.  Earp,  4  Rawle,  380  (18.34);  South  Dakota,  Fan.set 
V  Garden  C"y  St.  Bank.  24  S.  D.  248.  123  N.  W.  680  (1900);  Tennessee,  Bank 
of  Louisville  v.  Bank  of  Knoxville.  8  Baxt.  101,  105,  35  Am.  Rep.  091  (1874j ; 
Wisconsin.  Stacv  v.  Dane  Co.  Bank,  12  Wis.  629,  707  (1860) ;  Kohl  v.  Beach. 
107  Wis.  409.  S3'n.  W.  (J57.  50  L.  R.  A.  600,  81  Am.  St.  Rep.  849  (1900). 

When  the  first  agent  is  negligent,  he  of  course  is  liable  for  any  losses  caus- 
ed therebv  through  the  default  of  the  subagent.  Second  Nat.  Bank  v.  Mer- 
chants" Nat.  Bank,  111  Ky.  930,  65  S.  W.  4,  55  L.  R.  A.  273,  98  Am.  St.  Rep. 
439  (1901). 


Ch.  4)  DELEGATION  OF  THE  AUTHORITY  503 

SECTION  3.— EFFECT  OF  DELEGATION 

y 

HOAG  V.  GRAVES.^  = 

(Supreme  Court  of  Michigan,  1S90.    81  Mich.  628,  46  N.  W.  109.) 

Assumpsit  to  recover  half  of  $500,  alleged  to  have  been  collected 
by  defendant  through  his  agent,  one  Anthony.  Hoag  was  the  owner 
of  the  amount  due  on  an  insurance  policy  which  had  been  issued  on 
the  life  of  one  Sweet,  then  deceased.  Graves,  in  his  interest,  arranged 
with  Anthony  in  New  York  to  collect  it,  and  Hoag  gave  Anthony  a 
power  of  attorney^  and  made  a  contract  with  Graves  to  give  him  half 
the  amount  collected,  Graves  bearing  all  costs  of  collection. 

Champlin,  C.  J.^^  *  *  *  'pj^g  j[g(,^  ji^al-  ^i-jg  company  admitted 
liability  was  derived  through  a  letter  from  Anthony  to  Graves.  Quite 
a  correspondence  passed  between  these  parties,  and  Graves  testifies 
that  he  showed  alT  of  the  letters  received  by  him  from  Anthony  to 
Hoag,  and  plaintiff  testifies  that  he  saw  perhaps  a  dozen  such  letters. 
Anthony  collected  on  the  24th  of  June  $500.  After  several  days' 
delay  he  retained  from  the  amount  $100  for  his  services,  and  for- 
warded a  draft  for  $400,  payable  to  the  order  of  Brice  W,  Hoag. 
He  receipted  to  the  insurance  company  for  this  money  as  the  attorney 
in  fact  of  Brice  W.  Hoag.  Graves  handed  the  draft  over  to  Hoag, 
who  drew  the  money  upon  it,  retained  $250,  and  gave  $150  to  Graves. 
On  July  15,  1887,  Anthony  collected  the  balance  of  $500  from  the 
insurance  company,  and  signed  the  receipt  for  the  full  amount,  as 
follows:  "Brice  \V.  Hoag,  Creditor  of  Myron  W.  Sweet.  By  D. 
Ed^ar  Anthony,  Attorney  in  Fact."  He  kept  the  whole  of  the  second 
$500,  and  the  plaintiff  claims  that  Anthony  is  the  subagent  of  Graves, 
and  not  his  agent  at  all.  And  because  the  contract  between  Hoag 
and  Graves,  of  date  June  1,  1887,  recites  that  Graves  has  in  his  hands 
for  collection  a  claim  of  $1,000  on  certificate  3,977  of  the  National 
Benefit  Society  of  New  York,  he  is  liable  to  him  for  $250  collected 
by  Anthony,  and  which  Anthony  has  neglected  and  refused  to  pay 
over. 

loAcfonl:  r(nimicrci:il  r.:ink  v.  .Tniics.  IS  Tex.  811  (1S.")7):  Waltlinnii  v. 
InsnrMiicc  Co..  91  .\l)i.  170.  s  Suiitli.  r,r,r,,  ijt  Am.  St.  Uci'.  "^^-'J  (l"*9iii;  Kavis  v. 
Kliii;,  <",(;  r'..iiii.  4(;.".,  .".t  .\tl.  107.  no  .\iii.  si.  Ki-p.  KH  (IM).")).  WIumi  the  a^'i'iit 
assumes  full  n-siionsilpility  for  tin-  uinlcrtakiiiu  he  will  lie  ilaMi'  fur  llic  ads 
of  tlu'  suliau'iits,  even  wlien  tlie  priiK-ipal  knew  (liey  would  l»e  emiilnyed  ami 
consented  thereto.  Kaney  v.  Weed.  .">  N.  Y.  Sni»er.  Ct.  ri77  (Is.V.t):  Harnard 
V.  Collin.  HI  .Mas.s.  :',~,  6  N.  E.  .'HU.  r,.->  Am.  Kep.  44.'l  (ISSC);  Williams  v. 
Moore,  'J4  Tex.  Civ.  App.  401'.  .'S  S.  W.  9."..'!  (1900) ;  Rosslter  v,  Trafalgar  Life 
Assiir.  Ass'n,  L'7  I'.eav.  .''.77  (IS.V.M. 

'^  I'art  of  tlie  ojiiiiion  is  oiidlleiL 


504  Tin:  AUTiioKiTY  (Part  2 

After  hcarini:^  all  the  tcstiiuony,  the  cirruit  jiuli^c  charged  the  jury- 
as  follows:  "The  question  presented  in  this  case  is  one  of  those 
intercstiui::  ones  which  arise  in  trial  of  cases,  and  which,  by  reason 
of  the  endless  combination  of  facts,  there  seems  to  be  no  end  or  limit 
to.  It  seems  to  the  court  that  the  controlling  question  here  was 
whether  from  the  time  of  the  making  of  the  contract  of  June  1st  the 
man  Anthony  was  under  the  control  of  Mr.  Graves  or  of  Mr.  Hoag; 
and  when  that  question  is  solved,  it  solves  the  case  for  that  matter. 
I  camiot  quite  understand  how  it  would  be  possible  that  Mr.  Graves 
could  be  held  responsible  for  the  conduct  and  acts  of  Mr.  Anthony 
unless  he  had  the  power  to  control  him,  and,  indeed,  take  the  business 
out  of  his  hands  if  it  became  necessary.  And  it  seems  to  the  court 
that  by  the  power  of  attorney  of  January  29th  the  man  Anthony, 
under  the  circumstances,  as  they  seem  to  have  been  disclosed  by  the 
testimony,  was  the  agent  of  Mr.  Hoag;  that  at  the  time  when  the 
contract  of  June  1st  was  made,  it  was  understood  between  the  par- 
ties as  to  what  the  situation  was.  If  that  contract  had  been  intended 
to  have  been  construed  as  taking  the  authority  of  Mr.  Hoag  from 
Mr.  Anthony,  and  putting  the  control  of  Mr.  Anthony  into  the  hands 
of  Mr.  Graves,  it  hardly  seems  to  me  that  that  kind  of  a  contract 
would  have  been  drawn.  It  does  not  seem  to  me  that  the  contract 
goes  far  enough  to  do  that,  and,  as  I  said  before,  if  it  does  not  do 
that  it  does  not  quite  seem  to  me  that  it  could  be  said  that  it  was 
understood  between  the  parties  that  Mr.  Graves  should  be  responsible 
for  the  acts  of  Mr.  Anthony,  except  in  so  far  as  the  contract  speci- 
fies ;  that  is,  he  should  be  liable  for  his  acts  in  whatever  costs  he  might 
make,  and  things  of  that  kind ;  but  for  the  misfeasance  of  Mr.  An- 
thony, it  does  not  seem  to  me  that  the  contract  goes  far  enough.  With 
this  in  view,  it  seems  to  me  that  the  duty  is  upon  the  court  to  in- 
struct the  jury  to  return  a  verdict  for  the  defendant." 

We  think  the  view  of  the  circuit  judge  is  correct.  The  legal  prin- 
ciple involved  is  well  expressed  by  Mr.  Mechem  in  his  work  on  Agen- 
cy, at  section  197,  as  follows:  "If  an  agent  employs  a  subagent  for 
his  principal,  and  by  his  authority,  expressed  or  implied,  then  the 
subagent  is  the  agent  of  the  principal,  and  is  directly  responsible  to_ 
the  principal  for  his  conduct,  and  if  damage  results  from  the  con- 
duct of  such  subagent,  the  agent  only  is  responsible  in  case  he  has 
''not  exercised  due  care  in  the  selection  of  the  subagent.  But  if  the 
'^agent,  having  undertaken  to  transact  the  business  of  his  principal, 
employs  a  subagent  on  his  own  account  to  assist  him  in  what  he  has 
undertaken  to  do,  he  does  so  at  his  own  risk,  and  there  is  no  privity 
between  such  subagent  and  the  principal.  The  subagent  is  therefore 
the  agent  of  the  agent  only,  and  is  responsible  to  him  for  his  con- 
duct, while  the  agent  is  responsible  to  the  principal  for  the  manner_ 
in  which  the  business  has  been  done,  whether  by  himself  or  his  serv- 
ant or  his  agent." 


h"^'. 


J 


Ch.  4)  DELEGATION  OF  THE  AUTHORITY  505 

The  written  agreement  cannot  be  contradicted  by  parol  testimony, 
but  it  must  be  construed  in  the  light  of  the  circumstances  and  situa- 
tion of  the  parties  as  they  existed  at  the  time  it  was  executed.  The 
circumstances  were  that  Hoag  had  already  made  Anthony  his  attor- 
ney in  fact  to  liquidate,  settle,  and  adjust  this  claim  against  the  in- 
surance company.  He  was  at  the  time  the  contract  of  June  1st  was 
entered  into  the  agent  and  attorney  of  Hoag,  and  there  is  no  evidence 
that  he  ever  revoked  his  authority.  Anthony  received  the  money  of 
the  insurance  company  by  virtue  of  his  power  of  attorney  from  Hoag. 
and  not  by  virtue  of  any  authority  he  received  from  Graves.  He  did 
not  act,  or  claim  to  act,  as  the  agent  of  Graves,  or  by  virtue  of  any 
authority  received  from  him,  and  was  in  no  sense  a  subagent  of 
Graves,  but  was  the  immediate  agent  of  Hoag.  The  authority  con- 
ferred upon  Anthony  was  to  liquidate,  settle,  and  adjust  the  claim, 
and  this  authorized  him  to  receive  the  money  due  upon  the  claim,  and 
thus  liquidate  it.  Hoag  recognized  this  authority  in  receiving  without 
question  the  draft  as  avails  of  the  first  payment  made  upon  the  claim, 
and  which  was  received  after  the  execution  of  the  contract  of  June 
1st.  The  relations  between  Hoag  and  Anthony  had  not  changed  when 
Anthony,  as  the  agent  of  Hoag,  received  the  balance  of  the  claim, 
and  gave  a  receipt  in  Hoag's  name,  by  himself  as  his  attorney  in  fact, 
in  full  liquidation  of  the  whole  claim. 

The  plaintiff's  cause  of  action,  as  stated  in  his  declaration,  is  that 
Grayes^collecfed  $500  through  his  agent,  and  neglected  and  refused 
to  pay  plaintiff  his  half.  There  was  no  evidence  showing  or  tending 
to  show  that  Anthony,  who  collected  the  money,  was  the  agent  of 
Graves,  but,  on  the  contrary,  it  was  conclusively  shown  that  he  was 
Hoag's  agent,  and  it  follows  that  the  plaintiff  entirely  failed  to  make 
his  case. 

The  judgment  is  affirmed.     The  other  justices  concurred. 


PART  III 

EFFECTS  AND  CONSEQUENCES  OF  THE  RE- 

LATION 


CHAPTER 


DUTIES  AND  LIABILITIES  OF  THE  AGENT  TO  HIS 
PRINCIPAL 


SECTION  i.— LOYALTY 
L  In   GeneraIv 


LUM  V.  McEWEN. 

(Supreme  Court  of  Minnesota,  1894.    56  Minn.  278,  57  N.  W.  662.) 

Linn,  in  behalf  of  citizens  of  Brainerd,  gave  to  Clark  nominally,  to 
McEwen  really,  his  note  for  $5,000,  in  order  to  induce  McEwen  to  use 
his  influence  to  have  his  principals  build  a  railroad  to  Brainerd.  Mc- 
Ewen would  have  done  as  he  did  without  the  note,  and  he  had  no  in- 
fluence in  inducing  his  principals  to  build  the  road.  Linn  sues  to  have 
the  note  adjudged  null  and  void,  and  delivered  up  and  canceled.  On 
the  ground  that  the  note  was  in  circulation,  was  fair  upon  its  face,  and 
that  the  contract  was  still  executory,  the  court  below  decreed  for 
plaintiff. 

Mitchell,  J.  It  is  only  necessary  to  consider  one  of  numerous 
questions  argued  by  counsel.  The  defendant  McEwen  was  the  super- 
intendent and  general  manager  of  the  business  of  the  Northern  Mill 
Company.  That  company  had  a  sawmill  on  Gull  river,  eiglit  miles 
from  Brainerd,  and  also  a  logging  railroad  extending  from  Kilpatrick 
lake,  25  miles  from  Brainerd,  some  distance  out  into  the  woods.  The 
mill  company  had  under  consideration  a  plan  for  remodeling  its  mill, 
and  extending  its  logging  road  to  Gull  river,  where  the  mill  was  situ- 
ated. At  this  juncture  of  affairs,  in  consideration  of  McEwen's  agree- 
ment to  use  his  influence  and  authority  as  superintendent  and  manager 
of  the  mill  company  to  secure  the  removal  of  its  mill  and  the  extension 

(.506) 


ilM' 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  HIS  PRINCIPAL  507 

of  its  road  to  Brainerd,  the  plaintiff  executed  the  obligation  in  suit,  by 
which  he  promised  to  pay  to  defendant  Clark  $5,000  nine  months  aft- 
er date,  on  condition  that  within  that  time  the  mill  company  extended 
its  logging  railroad  to  Brainerd.  and  built  within  the  limits  of  that  city 
a  sawmill  of  a  specified  capacity.  This  note  was  given  for  the  benefit 
of  ]\IcEwen,  but  was  made  payable  to  Clark,  in  order  to  conceal  Mc- 
Ewen's  connection  with  the  matter. 

That  this  contract  was  illegal  and  void  on  grounds  of  public  policy 
will  not  admit  of  a  moment's  doubt.  Loyalty  to  his  trust  is  the  first 
duty  which  an  agent  owes  to  his  principal.  Reliance  upon  an  agent's 
integrity,  fidelity,  and  capacity  is  the  moving  consideration  in  the  crea- 
tion of  all  agencies ;  and  the  law  condemns,  as  repugnant  to  public 
policy,  everything  which  tends  to  destroy  that  reliance.  The  agent 
cannot  put  himself  in  such  relations  that  his  own  personal  interests  be- 
come antagonistic  to  those  of  his  principal.  He  will  not  be  allowed  to 
serve  two  masters  without  the  intelligent  consent  of  both. 

Actual  injury  is  not  the  principle  the  law  proceeds  on.  in  holding 
such  transactions  void.  Fidelity  in  the  agent  is  w^hat  is  aimed  at,  and. 
as  a  means  of  securing  it,  the  law  will  not  permit  him  to  place  himself 
in  a  position  in  which  he  may  be  tempted  by  his  own  private  interests 
to  disregard  those  of  his  principal.^  In  the  matter  of  determining  the 
policy  of  removing  the  mill  and  extending  the  road,  McEwen,  in  the 
discharge  of  his  duties,  whether  merely  that  of  making  recommenda- 
tions, or  of  exercising  authority  to  act,  owed  to  his  principal  the  exer- 
cise of  his  best  judgment  and  ability,  uninfluenced  by  any  antagonistic 
personal  interests  of  his  own.  His  attempt  to  secure  $5,000  to  himself 
was  calculated  to  bias  his  mind  in  favor  of  the  policy  upon  which  the 
payment  of  the  money  was  conditioned,  regardless  of  the  interests  of 
the  mill  company.  It  is  not  material  that  no  actual  injury  to  the  com- 
pany resulted,  or  that  the  policy  recommended  may  have  been  for  its 
best  interest.  Courts  will  not  inquire  into  these  matters.  It  is  enough 
to  know  that  the  agent  in  fact  placed  himself  in  such  relations  that  he 
might  be  tempted  by  his  own  interests  to  disregard  those  of  his  prin- 
cipal. 

The  transaction  was  nothing  more  or  less  than  the  acceptance  by  the 
agent  of  a  bribe  to  perform  his  duties  in  the  manner  desired  by  the 
person  who  gave  the  bribe.  Such  a  contract  is  void.  This  doctrine 
rests  on   such  plain  principles  of  law,  as   well  as  common   l)usincss 

1  Tho  nilf  is  niiivcrs.il  tluit  no  nno  having'  duties  <if  a  tiiliiciary  <-liMra<'tfr 
to  disfliart'*'  slialj  be  aiinwcrl  td  ciiter  into  ciiira^'ciiH'iifs  in  \vhi<'li  lie  lias,  or 
fan  iiav«'.  a  pcrson.-il  intcrfst.  <dnlli<'tink'.  or  wliicji  pussiidy  may  conllict.  witli 
fh«*  interest  of  (liosf  wlimn  lie  is  iioiiml  to  i»rolt'(t.  (Jlover  v.  Anu's  (C.  ('.) 
s  K«'(l.  ;{r.l  (issi);  I'.<.(|f.,nl  Coal  Co.  V.  rnrke  County  Coal  Co.,  44  lud.  App. 
:v.Kt.  so  N.  E.  41 -J  (iiio'.i). 

Tin-  rule  appli<'.s  to  pnhlic  aypnts,  nn«l  when  a  board  k-t.s  a  rontrart  in  bc- 
lialf  of  the  pnlijic,  from  which  somt*  nn'mbers  of  the  board  »r«'  to  roaj)  a  jx-r- 
sonal  advantaK*',  it  is  void  as  auainst  imblic  |i(dic-y;  and  it  matt<'rs  not  that 
thoso  who  arf  int^'rcsfcd  won,'  a  minority  of  the  board.  I'oople  v.  Township 
I'.oard.    11    Mich.   L'l'L'  (1n<;;!). 


J 


oOS  EFFECTS   AND    CONSKQT^ENCES   OF   THE    RELATION  (Part  3 

honesty,  that  the  citation  of  anthoritics  is  nnncccssary.  The  doctrine 
is  perhaps  as  clearly  and  concisely  expressed  as  anywhere  in  Harring- 
ton V.  Dock  Co.,  3  Q.  B.  Div.  549.  The  fact  that  ilie  validity  of  such 
transaction  is  attempted  to  be  sustained  in  courts  of  justice  does  not 
speak  well  for  the  state  of  the  public  conscience  on  the  subject  of 
loyalty  to  trusts  in  business  afTairs. 

This  was  an  action  by  the  maker  of  the  instrument  to  have  it  sur- 
rendered up  and  canceled.  In  view  of  the  relation  which  he  bears  to 
the  transaction,  there  may  be  some  doubt  whether  courts  should  give 
him  affirmative  relief.  But  defendants  do  not  raise  the  point,  and  we 
onl\-  advert  to  it  in  order  that  this  case  may  not  be  considered  an  au- 
thority on  the  question. 

Order  affirmed. 


■  / 
JANSEN  V.  WILLIAMS.' 

(Supreme  Court  of  Nebraska,  1893.    36  Neb.  8G9,  55  N.  W.  279,  20  L.  R.  A.  207.) 

Ryan,  C.^  This  action  was  brought  by  the  defendant  in  error 
to  recover  the  sum  of  $100  retained  as  commission  from  the  proceeds 
of  the  sale  of  real  property,  effected  by  the  plaintiffs  in  error.  The 
petition  alleged  the  employment  of  plaintiffs  in  error  to  sell  said  real 
property  for  the  sum  of  $3,000,  and  that  the  plaintiff  named  in  said 
petition  meantime  reserved  for  himself  the  right  to  sell  said  property 
if  he  met  with  an  opportunity  to  do  so  before  the  same  should  be  sold 
by  plaintiffs  in  error;  that,  soon  after  such  employment,  the  plaintiff 
below  entered  into  negotiations  with  one  E.  T.  Hartley  for  the  sale  of 
said  property,  and  was  about  to  sell  said  property  to  said  Hartley  for 
the  sum  of  $3,300;  that,  during  such  negotiations  with  said  Hartley, 
plaintiffs  in  error,  for  the  purpose  of  preventing  the  defendant  in  error 
from  making  said  sale,  and  wrongfully  compelling  the  defendant  in 
error  to  pay  plaintiffs  in  error  a  commission  of  $100,  induced  said 
Hartley  to  abandon  his  negotiations  with  defendant  in  error,  and  agree 
to  pay  to  them,  the  plaintiffs  in  error,  $3,000  for  said  property;  and 
that  thereupon  plaintiffs  in  error  represented  to  defendant  in  error  that 
they  had  sold  said  property  for  $3,000  to  a  good,  responsible  party, 
and  induced  the  defendant  in  error  to  execute  a  deed  to  Albert  W. 
Jansen,  one  of  the  plaintiffs  in  error,  and  defendant  in  error  executed 
the  same,  believing  that  said  grantee  was  another  than  the  said  plaintiff 
in  error,  and  thereby  deceived  and  defrauded  the  defendant  in  error 
to  defendant  in  error's  damage  in  the  sum  of  $100. 

The  answer  admits  the  placing  of  said  property  in  the  hands  of 
plaintiffs  in  error  for  sale  at  $3,000,  but  alleged  that  said  E.  T.  Hartley 

2  Accord :  Norrls  v.  Tayloe,  49  111.  17,  95  Am.  Dec.  568  (1868),  and  Prince 
V.  Dupuy,  1G3  111.  417,  45  X.  E.  298  (189G). 

3  I'art  of  the  opinion  is  oniitted. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  509 

was  obtained  by  plaintiffs  in  error  as  an  original  purchaser,  to  whom 
they  sold  the  property  without  any  knowledge  of  any  previous  nego- 
tiations with  defendant  in  error,  and  that  the  deed  was  taken  to  said 
Jansen  only  for  the  purpose  of  securing  money  advanced  to  said  Hart- 
ley, and  that  the  acts  in  connection  with  said  transaction  were  in  good 
faith.  To  this  answer  there  was  a  reply  in  the  nature  of  a  general 
denial.     *     *     * 

At  the  request  of  the  defendant  in  error  the  court  instructed  the  jury 
as  follows :  "An  agent  ought,  as  far  as  possible,  to  represent  his  prin- 
cipal ;  and,  to  the  best  of  his  ability,  he  should  endeavor  to  successfully 
accomplish  the  object  of  his  agency.  It  is  also  his  duty  to  keep  his 
principal  fully  and  promptly  informed  of  all  the  material  facts  or  cir- 
cumstances which  come  to  his  knowledge,  and,  since  he  is  expected  to 
represent  his  principal,  he  cannot  have  a  personal  interest  adverse  to 
the  interest  of  his  principal;  and  if  he  deals  with  the  subject-matter  of 
the  agency  the  profits  will,  as  a  general  rule,  belong  to  the  principal, 
and  not  to  the  agent.  In  all  things  he  is  required  to  act  in  entire  good 
faith  towards  his  principal.  There  are  duties  which  the  law  imposes 
upon  an  agent,  without  any  express  stipulations  on  the  subject;  and 
one  of  these  duties  of  an  agent  is  to  keep  his  principal  informed  of  his 
acts,  and  to  inform  him  within  a  reasonable  time  of  sales  made,  and 
to  give  him  a  timely  notice  of  all  facts  and  circumstances  which  may 
render  it  necessary  for  him  to  take  measures  for  his  security.  An 
agent  cannot  act  for  his  principal  and  for  himself  in  the  same  transac- 
tion, by  being  both  buyer  and  seller  of  property,  and  has  no  right  to 
act  as  the  agent  for  others  for  the  purchase  of  property  without  the 
knowledge  or  consent  of  such  owner,  nor  to  take  any  advantage  of  the 
confidence  which  his  position  inspires  to  obtain  the  title  in  himself. 
If  you  find  that  the  defendants  were  the  agents  of  the  plaintiff  for  the 
sale  of  the  property  mentioned  in  the  petition,  and  that  in  making  the 
sale  they  purposely  kept  from  the  plaintiff  any  of  the  material  facts 
touching  said  sale,  for  the  purpose  of  subserving  their  own  interest, 
and  intended  to  and  did  keep  the  plaintiff  in  the  dark  as  to  such  facts 
until  after  the  said  sale  was  consummated,  and  deed  executed  by  said 
plaintiff,  then  I  instruct  you  that  they  are  not  entitled  to  a  commission 
for  selling  the  same." 

In  Stettnische  v.  Lamb,  18  Neb.  627,  26  N.  W.  374,  is  this  language : 
"The  rule  is  well  settled  that  a  i)arty  will  not  be  permitted  to  i)urcluise 
an  interest  in  property,  and  hold  it  for  his  own  benefit,  where  he  has 
a  duty  to  perform  in  relation  thereto  which  is  inconsistent  with  his 
character  as  a  purchaser  on  his  own  account."  This  statement  was 
sustained  by  several  authorities  cited,  and  of  its  correctness  there  can 
be  no  doubt.  In  the  light  of  adjudged  cases  and  of  the  text-books, 
therefore,  let  us  see  what  duty  the  plaintiffs  in  error  had  to  perforin 
towards  the  defendant  in  error  in  respect  of  the  real  property  whicli 
was  the  subject-matter  of  the  agency  between  them.  Upon  this  subject 
the  following  language  is  found  in  Poni.  Kq.  Jur.  §  959:  "In  dealings 


510  KrKKC'i's  ANo  ('onsi;(.mi;n('i:s  ov  ttik  kiu.atkin        (Part  3 

without  the  intervention  of  his  iiriiicii)al.  if  an  ajjent  ft,)i"  the  pur])Ose 
of  selhng  property  for  the  principal  purchases  it  liiniself,  or  an  aj^^ent 
for  the  purpose  of  huyinq;  property  for  the  jirincipal  l»uys  it  from  liim- 
self,  either  ihrectly  or  throut^h  the  inslrunientahly  of  a  third  person, 
the  sale  or  ]iurchase  is  voiilaMe.  It  will  always  be  set  aside  at  the 
option  of  the  principal.  The  aim  unit  of  consideration,  the  absence  of 
untlue  aclvantaj^e,  or  other  similar  features,  are  wholly  immaterial. 
Nothing  will  defeat  the  principal's  right  of  remedy  except  his  own 
confirmation  after  full  knowledge  of  all  the  facts." 

In  Porter  v.  Woodruff.  36  N.  J.  Eq.,  on  page  179  et  seq.,  the  follow- 
ing language  is  found:  "The  general  interests  of  justice,  and  the  safety 
of  those  who  are  compelled  to  repose  confidence  in  others,  alike  de- 
mand that  the  courts  shall  always  inflexibly  maintain  that  great  and 
salutary  rule  which  declares  that  an  agent  employed  to  sell  cannot 
make  himself  the  purchaser,  nor,  if  employed  to  purchase,  can  he  be 
himself  the  seller.  The  moment  he  ceases  to  be  the  representative  of 
his  employer,  and  places  himself  in  a  position  towards  his  principal 
where  his  interests  may  come  in  conflict  with  those  of  his  principal,  no 
matter  how  fair  his  conduct  may  be  in  the  particular  transaction,  that 
moment  he  ceases  to  be  that  which  his  service  requires,  and  his  duty 
to  his  principal  demands.  He  is  no  longer  the  agent,  but  an  umpire. 
He  ceases  to  be  the  champion  of  one  of  the  contestants  in  the  game  of 
bargain,  and  sets  himself  up  as  a  judge  to  decide  between  his  principal 
and  himself  what  is  just  and  fair.  The  reason  of  the  rule  is  apparent. 
Owing  to  the  selfishness  and  greed  of  our  nature,  there  must,  in  the 
great  mass  of  the  transactions  of  mankind,  be  a  strong  and  almost  in- 
eradicable antagonism  between  the  interests  of  the  seller  and  the  buy- 
er ;  and  universal  experience  has  shown  that  the  average  man  will  not, 
where  his  interests  are  brought  in  conflict  with  those  of  his  employer, 
look  upon  his  employer's  interest  as  more  important,  and  entitled  to 
more  protection,  than  his  own.  In  such  cases  the  courts  do  not  stop 
to  inquire  whether  the  agent  has  obtained  an  advantage  or  not,  or 
whether  his  conduct  has  been  fraudulent  or  not.  When  the  fact  is 
established  that  he  has  attempted  to  assume  two  distinct  and  opposite 
characters  in  the  same  transaction,  in  one  of  which  he  acted  for  him- 
self, and  in  the  other  pretended  to  act  for  another  person,  and  to  have 
secured  for  each  the  same  measure  of  advantage  that  would  have  been 
obtained  if  each  had  been  represented  by  a  disinterested  and  loyal  rep- 
resentative, they  do  not  pause  to  speculate  concerning  the  merits  of  the 
transaction, — whether  the  agent  has  been  able  so  far  to  curb  his  nat- 
ural greed  as  to  take  no  advantage, — but  they  at  once  pronounce  the 
transaction  void  because  it  is  against  public  policy.  The  salutary  ob- 
ject of  the  principle  is  not  to  compel  restitution  in  case  fraud  has  been 
committed,  or  an  unjust  advantage  gained,  but  to  elevate  the  agent  to 
a  position  where  he  cannot  be  tempted  to  betray  his  princii)al.  Under 
a  less  stringent  rule,  fraud  might  be  committed,  or  unfair  advantage 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  HIS  PRINCIPAL  511 

taken,  and  yet,  owing  to  the  imperfections  of  the  best  of  human  institu- 
tions, the  injured  party  be  unable  either  to  discover  it,  or  prove  it  in 
such  a  manner  as  to  entitle  him  to  redress.  To  guard  against  this  un- 
certainty, all  possible  temptation  is  removed,  and  the  prohibition  against 
the  agent  acting  in  a  dual  character  is  made  broad  enough  to  cover  all 
his  transactions.  The  rights  of  the  principal  will  not  be  changed,  nor 
the  capacities  of  the  agent  enlarged,  by  the  fact  that  the  agent  is  not 
invested  with  a  discretion,  but  simply  acts  under  an  authority  to  pur- 
chase a  particular  article  at  a  specified  price,  or  to  sell  a  particular 
article  at  the  market  price.  No  such  distinction  is  recognized  by  the 
adjudications,  nor  can  it  be  established  without  removing  an  important 
safeguard  against  fraud.  Benson  v.  Heathorn,  1  Younge  &  C.  326; 
Conkey  v.  Bond,  34  Barb.  276,  36  N.  Y.  427." 

In  Ruckman  v.  Bergholz,  37  N.  J.  Law,  440,  is  found  the  following 
language:  "The  judge,  distinguishing  this  case  from  one  where  the 
price  was  left  open  to  the  negotiations  of  the  agent,  instructed  the  jury 
that,  though  the  plaintiff  was  interested  in  the  purchase  whqn  it  was 
made,  he  might,  nevertheless,  recover  his  commissions  as  agent,  not- 
withstanding the  defendant  was  not  aware  of  the  existence  of  such  in- 
terest. In  this  there  was  error,  for  it  is  a  fundamental  rule  that  an 
agent  employed  to  sell  cannot  himself  be  a  purchaser,  unless  he  is 
known  to  his  principal  to  be  such.  Dunl.  Paley,  Ag.  33 ;  Story,  Ag. 
§  210;  and  other  cases  cited.  And  this  rule  is  not  inapplicable,  nor  is 
it  relaxed,  when  the  employment  is  to  sell  at  a  fixed  price,  for  it  springs 
from  the  prohibitory  policy  of  the  law,  adopted  to  prevent  the  abuse  of 
confidence,  and  to  remove  temptation  to  duplicity.  It  requires  a  man 
to  put  off  the  character  of  agent  when  he  assumes  that  of  principal." 

Mechem,  Ag.,  in  section  455,  states  the  rule  as  follows:  "The  agent 
will  not  be  permitted  to  serve  two  masters  without  the  intelligent  con- 
sent of  both.  As  is  said  by  a  learned  judge,  so  careful  is  the  law 
guarding  against  the  abuse  of  fiduciary  relations  that  it  will  not  permit 
an  agent  to  act  for  himself  and  his  principal  in  the  same  transaction,  as 
to  buy  of  himself,  as  agent,  the  property  of  his  principal,  or  the  like.  All 
such  transactions  arc  void,  as  it  respects  the  principal,  unless  ratified 
by  him  with  a  full  knowledge  of  all  the  circumstances.  To  repudiate 
them,  he  need  not  show  himself  damnified.  Whether  he  has  l)cen  or 
not,  is  immaterial.  Actual  inquiry  is  not  the  principle  the  law  proceeds 
upon  in  holding  such  transactions  void.  Fidelity  in  the  agent  is  what 
is  aimed  at,  and,  as  a  means  of  .securing  it.  the  law  will  not  ])crmil  the 
agent  to  place  himself  in  a  situation  in  which  he  might  be  tempted  by 
his  own  private  interest  to  disregard  that  of  his  principal."  Citing 
}'eoi)le  v.  Township,  11  Mich.  222.  "This  doctrine,  to  speak  again  in 
the  beautiful  language  of  another,  has  its  foundation,  not  so  much  in 
the  cf)mmission  of  actual  fraud  as  in  that  profomid  knowledge  of  the 
human  heart  which  dictated  that  hallowed  petition,  'Lead  us  not  into 
temptation,  but  deliver  us  from  evil.'  and  that  caused  the  annoiuice- 
mcnt  of  the  infallible  truth.  '.\  man  cannot  serve  two  masters.'  " 


512        EFFECTS  AND  CONSEQrEXCES  OF  THE  RELATION    (Part  3 

Tlioso  quotaiions  \vc  shall  proiK'ily  close  w  itli  llic  languaij^c  of  Story, 
Ag.  §  210.  quoted,  with  the  approval  of  this  court,  in  Englehart  v. 
riow  Co.,  21  Neh.  48.  31  N.  W.  391 :  "In  this  connection,  also,  it  seems 
proper  to  state  anotlier  rule  in  regard  to  the  duties  of  agents,  which  is 
of  general  application,  and  that  is  that,  in  matters  touching  the  agency, 
agents  cannot  act  so  as  to  bind  their  principals  where  they  have  an 
adverse  interest  in  themselves.  This  rule  is  foimded  upon  the  plain 
and  ohvious  considerations  that  the  principal  bargains  in  the  employ- 
ment for  the  exercise  of  the  disinterested  skill,  diligence,  and  zeal  of 
the  agent  for  his  own  exclusive  benefit.  It  is  a  confidence  necessarily 
reposed  in  the  agent,  that  he  will  act  with  a  sole  regard  to  the  interests 
of  his  principal,  as  far  as  he  lawfully  may;  and  'even  if  impartiality 
could  possibly  be  presumed  on  the  part  of  the  agent,  where  his  own 
interests  are  concerned,  that  is  not  what  the  principal  bargains  for,  and 
in  many  cases  it  is  the  very  last  thing  which  would  advance  his  inter- 
est. If,  then,  a  seller  were  permitted,  as  an  agent  of  another,  to  be- 
come the  purchaser,  his  duty  to  his  principal  and  his  own  interest  would 
stand  in  direct  opposition  to  each  other,  and  thus  a  temptation,  perhaps 
in  many  cases  too  strong  for  resistance  by  men  of  flexible  morals,  or 
hackneyed  in  the  common  devices  of  worldly  business,  would  be  held 
out,  which  would  betray  them  into  gross  misconduct,  and  even  into 
crime.  It  is  to  interpose  a  preventive  check  against  such  temptations 
and  seductions  that  a  positive  prohibition  has  been  found  to  be  the 
soundest  policy,  encouraged  by  the  purest  precepts  of  Christianity." 

It  is  unnecessary  to  quote  further  illustrations  of  the  correctness  of 
the  instructions  given  the  jury  at  the  request  of  the  defendant  in  error. 
The  same  principles  announced  in  these  instructions  pervade  all  the 
text  works,  and  the  decisions  of  the  courts,  which  have  to  deal  with 
the  relations  of  principal  and  agent.  In  none  of  them  is  recognized 
the  right  of  the  suppression  of  important  facts,  of  which  the  principal 
had  a  right  to  be  informed,  as  a  part  of  "the  secrets  of  the  real-estate 
business,"  as  w^as  claimed  by  plaintifif  in  error  Murphy  in  his  testi- 
mony. The  evidence  fully  sustains  the  verdict  which  was  rendered  by 
the  jury.  Indeed,  a  verdict  different  would  probably,  of  necessity,  have 
been  set  aside,  as  has  been  shown  by  abundant  citation  of  text  writers 
and  authorities. 

The  instructions  clearly  gave  the  law  to  the  jury,  were  applicable  to 
the  evidence,  and  the  judgment  of  the  district  court  must  therefore  be 
affirmed.    The  other  commissioners  concur. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  513 


11.  Agent  Act  for  IMore  Than  One 
THOMPSON  V.  HAYELOCK. 

(Nisi  Prius  in  King's  Bench.  ISOS.     1  Camp.  527,  10  R.  R.  744.) 

Capt.  Thompson  was  employed  as  master  of  defendant's  ship,  the 
Lord  Nelson.  During  the  time  he  contracted  the  ship  in  the  government 
service  in  Egypt,  the  captain  to  receive  Is.  per  ton  per  month  and  the 
owner  40s.  per  ton  per  month.  The  government  paid  both  amounts 
to  the  defendant,  and  the  plaintiff  sues  to  recover  for  money  had  and 
received. 

Lord  EllEnborough.  Is  it  contended  that  a  servant,  who  has  en- 
gaged to  devote  the  whole  of  his  time  and  attention  to  my  concerns, 
may  hire  out  his  services,  or  a  part  of  them,  to  another?  It  would 
have  been  a  different  thing,  if  the  owner  had  been  suing  for  this  mon- 
ey; but  I  am  clearly  of  opinion  that  at  all  events  the  present  plaintiff 
has  no  right  to  it.  Under  this  contract,  he  must  have  been  taken  from 
superintending  the  defendant's  ship ;  and  I  do  not  know  how  far  it 
might  go,  if  such  earnings  could  be  recovered  in  a  court  of  justice. 
No  man  should  be  allowed  to  have  an  interest  against  his  duty.  I 
will  assume,  that  the  plaintiff  obtained  as  high  a  freight  as  possible  for 
his  owners,  and  that  his  services  to  government  were  meritorious; 
still  there  would  be  no  security  in  any  department  of  life  or  of  busi- 
ness, if  servants  could  legally  let  themselves  out  in  whole  or  in  part. 
My  opinion  upon  the  subject  is  quite  decisive:  and  if  it  be  doubted,  I 
beg  that  a  bill  of  exceptions  may  be  tendered.*  / 

V 

GATY  V.  SACK.» 

(Kansas  City  Court  of  Appeals,  Mi.ssouri,  1885.     19  Mo.  App.  470.) 

Action  to  recover  commissions  for  obtaining  a  purchaser  for  de- 
fendant's farm.  The  agent  did  not  complete  a  sale,  but  defendant 
himself  sold  the  farm  to  a  purchaser,  discovered  by  plaintiff. 

PiiiLii'S,  P.  j.o  *  *  *  III  jj-  appears  from  the  record  that  at 
the  time  plaintiff  claimed  to  be  acting  as  agent  for  defendant  he  was 
secretly  interested  in  a  farm  known  as  "the  Dyke  farm."     This  was 

*  One  npcnt  faiinot  authorize' another  ajrent  to  art  to  the  prejudlre  of  tlicir 
prlnfiiuil.  .\(hiiiis  K\j)ress  Co.  v.  Troyo.  .'!.">  .Md.  47  (1.S7'J),  approved  In  ('l;irU«' 
V.  Kelsey,  41  Neb.  IOC,  (iO  N.  W.  l.''.S  (1S!»1). 

B  Accord  :  GeiRer  v.  Ilarri.s,  19  Midi.  209  (1S(!!>),  In  whicli  the  cmirt  f.imid 
that  In  momentH  of  leisure,  or  uini'T  eirfMunstances  wlien  the  anient  e.'iiiiinl 
be  worl<in^  for  hi.'*  principal,  he  may  act  for  another,  If  wltliout  prejudice  to 
his  ein[doyer. 

«  Part  of  tlu'  oiiiidon  is  (.inltled. 
(.'oni>.rK.&  A.— .';.'{ 


514  icKi'iH-rs  AM)  r(iNsi:(.)ri:N(,'i;s  ok   tiik  iuolation        (Part  IJ 

the  farm  ho  took  tlio  saiil  i)uroliasor  out  to  sec  on  tlu'  day  dcfentlant 
proposeil  that  he  go  by  to  soo  his  farm,  ncfrndant  ctimplaiiis  that  the 
court  excUulod  evidence  offered  hy  him  toiuhnq-  to  show  that  the 
plaintiff  concealed  from  him  the  fact  of  this  s;.'cret  interest.  The  con- 
tention of  appellant  is.  that  plaint ilT's  interest,  thus  concealed,  con- 
tlicteil  with  his  duty  as  assent  for  the  sale  of  defendant's  land,  and 
should  be  held  to  defeat  jilaintiff's  action.  In  su])port  of  this  posi- 
tion we  are  referred  to  Story  on  Ai^ency,  §  210,  and  other  like  authori- 
ties. 

The  rule  invoked  is  "that  in  matters  touching;  the  ag'cncy,  agents 
cannot  act  so  as  to  bind  their  principals  where  they  have  an  adverse 
interest  in  themselves."  This  interest  manifestly  refers  to  the  subject 
matter  of  the  agency — the  thing  on  which  the  agent  undertakes  to  act 
and  deal  with  for  the  principal.  It  has  no  application  to  the  facts  of 
this  case.  It  cannot  be  so  extended  as  to  make  it  apply  to  the  instance 
of  a  real  estate  agent  having  his  own  lands  or  any  other  lands  for  sale, 
so  long  as  he  does  not  permit  his  interest  in  other  like  transactions  to 
interfere  with  his  duty  to  his  principal.  Otherwase  a  real  estate  agent 
could  only  have  on  his  list  of  lands  for  sale  one  farm  at  a  time,  or 
would  not  be  allowed  to  sell  his  own  lands,  without  first  advising  one 
of  his  patrons  of  his  purpose  and  interest  in  other  tracts.  Suppose 
he  did  keep  the  fact  of  his  interest  in  the  Dyke  farm  concealed  from 
defendant,  how  did  that  fact  concern  the  defendant,  or  in  and  of  itself 
affect  his  relation  as  agent  for  defendant's  land?  Defendant  does  not 
pretend,  or  at  least  he  did  not  offer  any  proof  to  the  effect,  that  he 
would  not  have  intrusted  the  sale  of  his  land  to  plaintiff  had  he  known 
that  he  was  secretly  interested  in  the  Dyke  farm.     *     *     * 

Judgment  for  plaintiff  affirmed.  ; 


EVERHART  v.  SEARLE.  V 

(Supreme  Court  of  Poinis.vlvauia,   1S72.     71   Pa.  2.50.) 

TiiOMPSox,  C.  J.^  The  case  before  us  is  rather  novel.  It  involves 
a  question  whether  the  same  person  may  be  an  agent  in  a  private 
transaction  for  both  parties,  without  the  consent  of  both,  so  as  to  en- 
title him  to  compensation  from  both  or  either.  We  have  the  authority 
of  Holy  Writ  for  saying  that  "tio  man  can  serve  two  masters;  for 
either  he  will  hate  the  one  and  love  the  other,  or  else  he  w^ill  hold  to 
the  one  and  despise  the  other."  All  huipan  experience  sanctions  the 
undoubted  truth  and  purity  of  this  philosophy,  and  it  is  received  as  a 
cardinal  principle  in  every  system  of  enlightened  jurisprudence. 

The  plaintiff  below  was  appointed  by  one  A.  S.  Flagg,  of  Massachu- 
setts, agent  to  sell  certain  real  estate,  situate  in  Luzerne  county,  Penn- 
sylvania, and  was  to  receive  for  his  compensation  all  that  he  might 

"  Part  of  the  ojiimon  is  omitted. 


Ch.  1)  DUTIKS  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  51o 

realize  over  $125  per  acre.  Two  days  after  the  date  of  this  authority, 
to  wit,  on  the  17th  day  of  January  1870,  he  accepted  from  the  plain- 
tiff in  error  the  contract  in  writing  upon  which  this  suit  was  brought, 
promising  to  pay  him  S500  as  therein  set  forth,  "for  his  services  in 
assisting  him  to  negotiate  a  sale  and  purchase,  by  him  of  fourteen  of 
eighteen  shares,  or  all,  if  he  can  obtain  them  conveniently,  of  the 
eighteen  (shares)  of  a  certain  piece  or  parcel  of  land  situate  in  Lacka- 
wanna township,"  etc.,  composed  of  the  same  land  he  was  appointed 
to  sell.  We  need  not  spend  time  to  argue,  what  is  not  susceptible  of 
controversy,  that  by  the  terms  of  the  instrument  he  accepted  employ- 
ment as  agent  to  purchase  the  same  land  which  he  was  employed  as 
agent  to  sell.  It  is  true,  the  learned  judge  below,  no  doubt  strongly 
impressed  by  the  maxim  "that  the  laborer  is  worthy  of  his  hire."  en- 
deavored to  make  a  distinction  in  the  transaction  between  an  under- 
taking as  an  agent,  and  the  sale  of  a  preference  to  the  defendant  as  a 
buyer.  I  ought  to  say,  however,  that  this  was  hardly  his  interpreta- 
tion of  the  writing,  but  rather  the  plaintiff's  explanation  of  his  duty 
under  the  contract.  But  the  plaintiff,  as  a  witness  on  the  stand,  had 
no  right  to  construe  the  language  of  the  written  contract  on  which  he 
had  brought  his  suit.  There  was  nothing  left  out,  and  no  ambiguity 
in  it,  and  therefore  not  within  the  rule  of  oral  explanation.  The  in- 
terpretation was  for  the  court  on  the  terms  of  the  instrument,  and  thev 
obviously  stipulated  for  the  plaintiff's  services  to  assist  the  defendant 
in  negotiating  for  the  shares  mentioned,  "or  all,  if  he  can  obtain  them 
conveniently."  He  was  thus  to  be  acting  with  the  defendant,  or  by 
himself,  for  the  defendant,  just  as  the  object  in  view  might  demand. 
This  was  an  agency  "pure  and  simple."  I  do  not  think,  however,  that 
the  result  as  to  the  plaintiff's  claim  ought  to  be  at  all  different  from 
what  it  is  likely  to  be,  on  the  ground  assumed  by  the  learned  court ; 
for  even  on  that  ground  the  agent  bargained  away  what  his  first  em- 
ployer had  engaged,  viz.,  his  discretion.  This  was  bad  faith  towards 
him,  and  ex  maleficio  non  oritur  contractus. 

There  was  ])lausibility  and  seeming  force  in  the  argununt  that  as 
Flagg,  the  plaintiff's  principal  in  the  sale,  was  not  injured  I)\  the  ar- 
rangement with  the  defendant,  there  was  nothing  wrong  in  making 
that  arrangement.  This  is  sjK'cious,  but  not  sound."*  The  transaction 
is  to  be  regarded  as  against  the  policy  of  the  law,  and  not  binding  upon 

«  If  the  aL'cnt  of  two  priiu'lpals  Is  liitiicst.  "the  utiiio.st  tliat  can  !»('  I'.xitoctt'd 
of  liiiii  is  impartiality.  I'.ut  iiiipaitiality  is  exactly  tlio  tnialification  wliicli  is 
Inconsistent  witii  HKcncy."  British  Am.  Assurance  ('o.  v.  ("ooixt.  (5  Colo.  .Vpp. 
'jn,  40  I'.Mc.  147  (isiri).  It  Is  of  tlic  essence  of  the  agent's  contract  that  lie 
will  ns«'  Ills  liest  skill  and  judgment  to  promote  the  interest  of  his  employer. 
This  he  cannot  do  when  he  acts  for  two  persons  whose  interests  are  essen- 
tially adverse.  lie  is  therefore  mdlly  of  a  hreach  of  his  contra<'t.  I''arns- 
wortli  V.  llfiiMner,  1  Allen.  I'.M,  7'.»  .\m.  I  >ec.  Tod  (isCd),  ji  leadinir  case,  fol- 
lowed in  Walker  v.  Osuood.  ".is  .Mass.  :!|s.  <.):!  Am.  Dim-.  ICS  dSflTi,  which  dis- 
tint'nished  Uupp  v.  Sampson,  K!  (Jray,  .'!!is.  77  .\in.  I»,.c.  41(!  (ISdO).  pcisr.  p.  ."ils. 

The  a^ent  cainiot  defend  himself  Itehlnd  the  donlde  aueiicy  liy  scltin;:  nii 
the  illegality  of  tin-  eonfr.ict.     i'<>itn\i\  v.   Ilollidjiy,   .V.i  III.   17iJ  (1S71). 


516        EFFECTS  AND  CONSKQrKXCES  OF  THE  UELATION    (Part  3 

a  party  who  has  a  ri«;ht  to  ol)jcct  to  it.  "It  matters  not,"  it  is  said 
(page  210,  of  Hare  and  Wallace's  Notes,  1  Lead.  Cases  in  Eq.),  "that 
there  was  no  fraud  meditated  and  no  injury  done;  the  rule  is  not  in- 
tended to  be  remedial  of  actual  vvronq-,  but  preventive  of  the  possibility 
of  it."  This  was  said  of  "any  one  who  acts  representatively,  or  whose 
office  is  to  advise  or  operate,  not  for  himself  but  for  others.  The 
principle  is  g^eneral,  that  a  trustee,  so  far  as  the  trust  extends,  can 
never  be  a  purchaser  of  the  property  embraced  under  the  trusts  with- 
out the  assent  of  all  the  persons  interested ;  and  this  principle  applies 
to  executors,  atlministrators,  cjuardians,  attorneys  at  law,  general  or 
special  agents,  *  *  *  and  to  all  persons,  judicial  or  private,  min- 
isterial or  counselling,  who  in  any  respect  have  a  concern  in  the  sale  of 
the  property  of  others ;  it  extends  to  sales  by  public  auction,  and  to 
judicial  sales  as  well  as  private."  Id.  209.  And  for  this  innumerable 
authorities,  English  or  American,  are  cited.  To  the  same  efifect  is 
Campbell  v.  Pennsylvania  Life  Insurance  Co.,  2  Whart.  55 ;  Paley  on 
Agency,  32.  "It  is  a  fundamental  rule  applicable  to  both  sales  and 
purchases,  that  an  agent  employed  to  sell  cannot  make  himself  the 
purchaser;  nor  if  employed  to  purchase  can  be  himself  the  seller. 
The  expediency  and  justice  of  this  rule  are  too  obvious  to  require  ex- 
planation. For  with  whatever  fairness  he  may  deal  between  himself 
and  his  employer,  yet  he  is  no  longer  that  which  his  services  require 
and  his  principal  supposes  and  retains  him  to  be."  It  is  clear  from 
all  the  authorities,  not  only  those  referred  to,  but  those  cited  in  the 
notes  to  Fox  v.  Mackreth  and  Pott  v.  Same,  1  Lead.  Cases  in  Eq.  172, 
not  here  specially  referred  to,  as  also  in  numerous  cases  in  our  reports 
from  Lazarus  and  Others  v.  Bryson,  3  Binn.  54,  that  an  agent  to  sell 
cannot  become  an  agent  to  buy.  It  is  against  the  policy  of  the  law  that 
such  a  principle  should  hold.  Ex  parte  Bennett,  10  Vesey,  381.  "The 
ground  on  which  the  disqualification  rests,"  it  was  said  in  8  Tomlin's 
Brown,  72,  "is  no  other  than  that  principle  which  dictates  that  a  person 
cannot  be  both  judge  and  party.  No  man  can  serve  two  masters.  He 
that  is  intrusted  with  the  interests  of  others  cannot  be  allowed  to 
make  the  business  and  object  of  interest  to  himself,  because,  from  a 
frailty  of  nature,  one  who  has  the  power  will  be  too  readily  seized  with 
the  inclination  to  use  the  opportunity  for  serving  his  own  interest  at 
the  expense  of  those  for  whom  he  is  intrusted.  The  danger  of  tempta- 
tion from  the  facility  and  advantage  for  doing  wrong  which  a  particu- 
lar situation  affords,  does,  out  of  the  mere  necessity,  work  a  disqualifi- 
cation." 

We  regard  the  case  of  the  plaintiff  below  within  the  principles  of 
these  citations,  although  it  doubtless  appeared  to  him,  as  it  did  to  his 
able  counsel  and  the  learned  court,  that  there  was  nothing  of  actual  or 
meditated  fraud  in  the  transaction ;  but  the  learned  judge,  we  think, 
erred  in  refusing  the  defendant's  1st  point,  and  in  charging  as  set  forth 
in  the  several  assignments  of  error.     *     *     * 

Judgment  reversed. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGi:XT  TO  HIS  PRINCIPAIj  517 


ANDREWS  V.  RAMSAY  &  CO. 

(King's  Bench  Division  of  the  High  Court  of  Justice  [1903].    2  K.  B.  635,  72 
L.  J.  K.  B.  SG5,  S9  L.  T.  450,  52  W.  R.  126.) 

Lord  AlvErstonE,  C.  J.  In  this  case  an  action  was  brought  to 
recover  a  sum  of  £50.,  which  had  been  retained  by  the  defendants 
with  the  assent  of  the  plaintiff  as  their  remuneration  for  their  serv- 
ices in  negotiating  the  sale  of  the  plaintiff's  house.  The  main  point 
of  the  case  is  the  suggestion  that,  because  the  defendants,  while  act- 
ing as  the  plaintiff's  agents,  had  received  from  the  purchaser  £20. 
as  a  secret  profit,  and  because  when  that  was  discovered  by  the  plain- 
tiff the  defendants  had  paid  over  that  £20.  to  the  plaintiff,  the  plain- 
tiff' is  not  entitled  to  recover  back  from  the  defendants  the  amount 
retained  by  them  by  way  of  commission.  I  cannot  see  how  that  fact 
has  anything  to  do  with  the  matter.  The  £20.  was  recoverable  by  the 
plaintiff  from  the  defendants  because  it  was  a  secret  profit  made  by 
them,  and  came  out  of  the  sum  which  the  purchaser  would,  it  may 
be  assumed,  have  been  willing  to  pay  for  the  house,  and  it  therefore 
rightly  belonged  to  the  plaintiff.  That  the  plaintiff  was  undoubtedly 
entitled  to  the  £20.  seems  to  me  to  have  no  bearing  on  the  question 
whether  the  defendants  were  entitled  to  commission  from  the  plaintiff. 
It  is  said  that  the  defendants  ought  not  to  be  called  upon  to  hand  over 
the  £50.  to  the  plaintiff'  because  the  plaintiff'  has  had  the  benefit  of 
their  services. 

The  principle  of  Salomons  v.  Pender,  3  H.  &  C.  639,  seems  to  me 
to  govern  the  case,  and  it  is,  in  my  opinion,  amply  sufficient  to  do 
so.  In  that  case  it  was  held  that  an  agent  who  was  himself  interested 
in  a  contract  to  purchase  property  of  his  principal  was  not  entitled 
to  any  commission  from  the  principal.  The  principle  there  laid  down 
is  that,  when  a  person  who  purports  to  act  as  an  agent  is  not  in  a 
position  to  say  to  his  principal,  "I  have  been  acting  as  your  agent, 
and  I  have  done  my  duty  by  you,"  he  is  not  entitled  to  recover  any 
commission  from  that  principal.  In  Salomons  v.  Pender,  3  H.  &  C. 
639,  642,  Bramwell,  B.,  said:  "It  is  true  that  *  *  *  the  defend- 
ant has  had  the  benefit  (if  it  be  one)  of  the  plaintiff's  services.  But 
the  defendant  is  in  a  position  to  say,  'What  you  have  done  has  been 
done  as  a  volunteer,  and  does  not  come  within  the  line  of  your  duties 
as  agent.'  "  And  in  the  same  case  Martin,  B.,  quoted  the  passage 
from  Story  on  Agency,  p.  262,  §  210,  where  it  is  said :  "In  this  con- 
nection, also,  it  seems  proper  to  state  another  rule,  in  regard  to  the 
duties  of  agents,  which  is  of  general  api)lication,  and  that  is,  that, 
in  matters  touching  the  agency,  agents  cannot  act  so  as  to  bind  tlioir 
principals,  where  they  have  an  adverse  interest  in  them.selvcs.  This 
rule  is  founded  upon  the  plain  and  obvious  consideration,  that  the  prin- 
cipal bargains,  in  the  employment,  for  the  exercise  of  the  disinter- 
ested skill,  diligence,  and  zeal  of  t'^e  agent,  for  his  own  exclusive 


518  EFFECTS  ANO  C(>Nsi:()ri:N(i;s  OF  ■I'm;  i;i:i,A'noN        (I'art  'A 

bciK'tit.  It  is  a  conri(loncc  necessarily  reposed  in  the  aj^eiit,  lliat  lie  will 
act  with  a  sole  regard  to  the  interests  of  his  principal,  as  far  as  ho 
lawfully  may:  and  e\en  if  inipartialil\  eoiild  possihlv  he  ])resumed 
on  the  part  of  an  a^ent,  where  his  own  interests  were  concerned, 
that  is  not  wliat  the  principal  hart^ains  for;  and  in  many  cases,  it 
is  the  very  last  thinj;  which  would  advance  his  interests.  The  seller 
of  an  estate  must  he  presumed  to  he  desirous  of  ohtaininji^  as  hi,<;h  a 
price  as  can  fairly  he  ohtained  therefor ;  and  the  purchaser  must 
equally  be  presumed  to  desire  to  buy  it  for  as  low  a  price  as  he  may." 

It  seems  to  lue  that  this  case  is  only  an  instance  of  an  agent  who 
has  acted  improjierly  being  unable  to  recover  iiis  commission  froiu  his 
principal.  It  is  impossible  to  say  what  the  result  might  have  been 
if  the  agent  in  this  case  had  acted  honestly.  It  is  clear  that  the  pur- 
chaser was  willing  to  give  i20.  more  than  the  price  which  the  plain- 
tiff received,  and  it  may  well  be  that  he  would  ha\e  given  more  than 
that.  It  is  imixjssible  to  gauge  in  any  way  what  the  plaintiff  has  lost 
by  the  improper  conduct  of  the  defendants.  I  think,  therefore,  that 
the  interest  of  the  agents  here  was  adverse  to  that  of  the  principal. 
A  principal  is  entitled  to  have  an  honest  agent,  and  it  is  only  the  hon- 
est agent  who  is  entitled  to  any  commission.  In  my  opinion,  if  an 
agent  directly  or  indirectly  colludes  with  the  other  side,  and  so  acts 
in  opposition  to  the  interest  of  his  principal,  he  is  not  entitled  to  any 
commission."  That  is,  I  think,  supported  both  by  authority  and  on 
principle;  but  if,  as  is  suggested,  there  is  no  authority  directly  bear- 
ing on  the  question,  I  think  that  the  sooner  such  an  authority  is  made 
the  better.  The  result  is  that  the  county  court  judge  was  right,  and 
this  appeal  must  be  dismissed. 

Wills,  J.,  also  rendered  an  opinion. 

Appeal  dismissed. 


RUPP  V.  SAMPSON.         \J 

(Supreme    .Tiidicial    Tourt    of   Massachusetts,    ISCO.      10   Orav,   nns,    77    Am. 

Dec.  41U.) 

Contract  for  "brokerage"  on  rattans  imported  in  the  ships  Brothers 
and  Merrimack.  Rupp  corresponded  with  one  Clew,  and  got  him  to 
come  on  and  meet  the  defendants,  wdiereupon  Clew  and  defendants 
made  a  contract.  Verdict  for  plaintiff,  and  defendants  alleged  ex- 
ceptions. 

0  Accord:  Cannell  v.  Smith.  142  Ta.  25,  21  AtL  70r{,  12  L.  R.  A.  ,'^05  (1891). 
The  a^'cut  cannot  recover  for  his  .services  for  two  iirincipals,  even  from  one 
who  with  full  knowJed^'e  of  the  doulile  ajienc.v  iironiised  to  pay  him,  if  it 
appears  that  the  other  principal  was  ijinorjint  of  the  situation.  iJice  v.  Wood, 
li:;  .Mass.  ]:'/.',.  lO  .\m.  Kep.  4;j!)  (1S7."!).  And  when  one  principal  cmph).vs  the 
a^ent  of  another  having  adverse  interests,  the  first  pnncii)al  cannot  enforce 
aj:ainst  the  second  the  contract  made  through  the  a«ent.  I'.artrani  &  Sons  v. 
Lloyd.  90  L.  T.  ."..^7.  20  T.  L.  K.  281  (1004),  reversing',  on  the  question  of  rati- 
rlcation.  88  L.  T.  2S0  (100."'.). 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  519 

BiGELOW,  C.  J.  We  can  see  nothing  in  the  conduct  of  the  plaintiff 
which  was  fraudulent,  or  which  operated  to  deceive  the  defendants 
in  making  the  agreement  to  pay  him  for  his  services.  He  made  no 
false  representations  to  them.  They  knew  the  nature  and  value  of 
his  services  and  the  extent  to  which  they  were  beneficial  to  them.  It 
was  wholly  immaterial  that  he  was  also  to  receive  compensation  from 
the  other  party.  It  might  well  be  that  the  services  of  the  plaintiff 
were  of  value  to  both  parties,  and  that  e^ch  might  be  willing  to  pay 
according  to  the  benefit  received  by  each.  /We  know  of  no  principle  of 
law,  on  which  an  agreement  to  pay  forVservices  rendered,  honestly 
entered  into,  can  be  avoided  on  the  ground  that  another  person,  hav- 
ing interest  wholly  distinct  and  independen);,  has  stipulated  by  a  sep- 
arate contract  to  pay  for  the  same  services^'  Both  contracts  are  valid ; 
they  are  made  upon  good  consideration ;  and  each  agrees  to  make 
compensation  for  a  benefit  which  he  expects  to  receive  from  the  bar- 
gain. In  the  present  case,  there  is  nothing  to  show  that  the  commis- 
sions which  the  plaintiff  was  to  receive  from  both  parties  were  exces- 
sive or  unreasonable,  or  that  they  would  together  constitute  an  un- 
usual or  extraordinary  compensation  for  the  services  rendered  by 
him.  On  the  contrary,  the  jury  had  found,  under  the  instructions 
given  by  the  court,  that  the  sum  claimed  of  the  defendants  had  been 
earned  and  was  due  when  this  action  was  brought,  notwithstanding 
the  contract  with  the  other  party  for  the  payment  of  a  like  sum. 

The  claim  of  the  plaintiff  would  have  stood  on  a  very  different 
ground  if  he  had  been  employed  as  a  broker  to  buy  or  sell  goods.  It 
would  in  such  cases  have  been  a  fraud  for  him  to  conceal  his  agency 
for  one  from  the  other.  The  interests  of  buyer  and  seller  are  neces- 
sarily adverse,  and  it  would  operate  as  a  surprise  on  the  confidence 
of  both  parties,  and  essentially  affect  their  respective  interests,  if  one 
person  should  without  their  knowledge  act  as  the  agent  of  both. 
Farebrother  v.  Simmons.  5  B.  &  Aid.  ^33  ;  Story  on  Agency,  §  31.  But 
the  plaintiff  did  not  act  in  any  such  capacity.  He  was  not  an  agent 
to  buy  or  sell,  but  only  acted  as  a  middleman  to  bring  the  parties 
together,  in  order  to  enable  them  to  make  their  own  contracts.  He 
stood  entirely  indifferent  between  them,  and  held  no  such  relation 
in  consetjuence  of  his  agency  as  to  render  his  action  adverse  to  the 
interests  of  either  i)arty.  This  distinction  was  taken  at  the  trial  and 
carefully  and  accurately  stated  in  the  instructions  given  to  the  jury.'" 

The  evidence  offered  by  the  defendants  as  to  the  usages  of  trade 


."DO  EFFECTS   AND   CONSEQITENCES   OF   THE   RELATION  (Part   3 

was  rightly  rcjeototl,  because  it  rolalcd  to  a  class  of  contracts  unlike 
that  which  was  in  issue  in  the  present  case.  It  was  therefore  irrele- 
vant.    Exceptions  overruled. 


III.  Adversiv  Interests  of  the  Agent 

(A)  Personal  Profit 

TURNBULL  v.  GARDEN. 

(EngUsh  Court  of  Chancery,  1SG9.     38  L.  J.  Ch.  331,  20  L.  T.  Rep.  [N.  S.]  218.) 

James,  V.  C.  In  this  case  the  plaintiff,  Mrs.  Sarah  Turnbull,  is  a 
widow  lady,  wdio  has  for  many  years  employed  the  defendant,  Mr. 
R.  S.  Garden,  as  her  agent  in  this  country  for  the  purpose  of  receiv- 
ing the  income  which  was  receivable  by  her  in  this  country,  and 
for  the  purpose  of  making  payments  out  of  it  by  her  authority.  Mr. 
Garden  carries  on  the  business,  not  only  of  an  army  agent,  but  that 
of  accoutrement  maker.  I  do  not  know  whether  this  is  a  full  descrip- 
tion of  his  trade.  In  the  course  of  the  year  1867  he  caused  an  attach- 
ment to  be  lodged  in  the  city  of  London,  upon  some  moneys  of  the 
plaintiff  in  a  bank  there,  to  meet  a  claim  of  his  for  a  balance  of 
£97.  odd,  being  the  result  of  the  cash  accounts  betw^een  him  and 
the  plaintiff,  the  balance  upon  the  receipts  on  her  account, — the  debts 
due  to  him  in  his  own  trade  as  an  accoutrement  maker,  and  pay- 
ments made  by  him  on  her  account.  She  has  challenged  that  ac- 
count in  two  or  three  very  important  particulars.  She  says,  "There 
was  no  such  balance  as  that  of  £97.  due  from  me,  because,  in  the  ac- 
count which  you  have  rendered  to  me,  you  have  charged  me  most 
extravagant  sums  for  payments  made  on  account  of  my  son,  a  young 
cornet  who  had  gone  out  to  India,  and  as  to  whom  I  had  written  to^ 
you  to  tell  you  to  furnish  him  with  the  necessary  outfit";  and  she 
says,  "That  was  the  only  authority  I  gave  you  in  addition  to  the 
earHer  authority,"  an  authority  which  is,  no  doubt,  relied  upon  by 
the  defendant,  and  which  accompanied  the  young  man  when  he  came 
to  this  country,  to  give  him  such  moneys  as  were  really  necessary 
for  him,  without  going  to  any  extravagant  expenditure. 

That  being  the  authority,  Mr.  Garden  charged  the  plaintiff,  Mrs. 
Turnbull,  as  having  paid  altogether  in  respect  of  the  outfit  of  this 
young  man  a  sum  very  nearly  amounting  to  £700.,  a  sum,  certainly, 
which  is  very  startling  if  supposed  to  be  the  cost  of  a  reasonable  and 
proper  outfit,  which  an  agent,  acting  with  a  due  regard  to  the  inter- 
ests of  his  employer,  would  have  thought  of  ordering  and  sanction- 
ing on  behalf  of  the  son  of  a  widowed  mother,  whose  means  do  not 
seem  to  have  been,  at  all  events,  of  a  very  colossal  description.  The 
amount  is  certainly  startling. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL 


521 


Probably  the  startling  extent  of  the  outfit  which  was  furnished 
to  the  young  man  is,  to  a  considerable  extent,  explained  by  that 
which  appears  with  reference  to  the  other  charge  which  the  plaintiff 
makes.  The  plaintiff  says,  "In  addition  to  this  you  have,  in  my  ac- 
count, charged  against  me,  as  money  actually  paid,  moneys  which 
were  never  paid  on  my  account.  You  have  charged  me  with  a  pay- 
ment to  Mr.  Daw  of  ill3.;  you  never  paid  him  any  such  sum.  You 
have  charged  me  with  a  payment  to  Mr.  Fagg  of  i40. ;  you  never 
paid  him  any  such  sum.  You  have  charged  me  a  very  much  larger 
sum  a:,  paid  to  Mr.  Williams,  a  tailor;  but  you  never  paid  him  any 
such  sum."  The  defendant  says,  "True  it  is  I  never  did  pay  any  such 
sums ;  but  I  was  authorized  to  charge  you  more  than  I  actually  paid, 
— to  represent  to  you  that  I  had  paid  what  I  had  not  paid, — I  was 
authorized  to  do  all  this  by  the  custom  of  my  trade  or  profession 
of  army  agent."  It  is  not  the  first  time  that  we  have  heard  in  these 
courts  of  a  custom  of  this  kind.  I  recollect  one  case,  before  the 
Master  of  the  Rolls,  where  a  custom  was  alleged  by  a  commission 
agent  in  Liverpool  of  taking  his  customer's  good  flour  and  mixing 
it  with  bad  flour  for  the  purpose  of  making  a  profit.  There  was 
another  case  where  a  commission  agent  said  it  was  the  custom  in 
his  particular  trade  in  Lancashire,  not  only  to  charge  a  commission, 
but  also  to  alter  the  invoices  by  making  them  higher  than  what  was 
really  paid.  That  custom  did  not  meet  with  the  approbation  of  this 
Court.  One  might  give  a  great  many  more  instances  of  customs  of 
that  kind ;  but  if  there  be  such  a  custom  as  that  which  is  alleged  in 
this  case,  the  sooner  that  custom  is  put  an  end  to  the  better  it  will  be 
for  all  persons  concerned;  and  if  that  custom  is  carried  into  effect 
by  the  practice,  of  which  there  is  some  trace  in  this  case,  of  sending 
in  invoices  of  one  sum  to  the  agent  and  another  invoice  to  be  shewn 
by  the  person  who  has  received  it  to  the  customer,  the  sooner  that  is 
put  an  end  to,  I  think,  the  better,  with  reference  to  another  branch 
of  the  law.  In  this  particular  case  there  is  some  trace  of  it,  although 
there  is  no  evidence  shewing  that  Mr.  Garden  has  ever  received 
more  than  one  invoice. 

The  case  which  Mr.  Garden's  witnesses  make  is  this:  they  say 
there  is  a  trade  discount  which  is  known  all  over  the  world,  in  this 
particular  trade  and  every  other  trade ;  that  is  to  say,  there  is  a  dis- 
count which  the  one  tradesman  allows  to  the  other  which  would  not 
be  allowed  to  the  customer.  That  is  put  in  this  way  in  the  affidavit 
of  Mr.  Goody:  "I  say  that  it  is  the  general,  established  and  well- 
known  and  universally  recognized  custom  in  the  trade  of  military 
tailors  and  outfitters  for  them  to  be  allowed  trade  discount  by  other 
tradesmen  for  goods  paid  for  through  them,  but  supplied  by  such 
other  tradesmen,  and  to  charge  their  customers  with  the  full  amount 
charged  or  invoiced  by  such  other  tradesmen  to  or  on  account  of 
such  customers,  and  to  receive  and  retain  such  trade  discount  as  and 


.'•l-'ll  KKl'l-H'TS    AM)    CliNSllgtM^Nfl-.S    OK     Till;    KKLATION  (I'art    3 

for  tlioir  own  profn  ;  aiul  1  hcli(.'\c  that  il  tho  plaintilT  in  this  suit  had 
personally  purchasoil  ami  paid  for  ihc  j^oods  supplied  ])\  other  per- 
sons than  the  ilefendant,  hut  ])aid  for  hy  or  through  him,  she  would 
not  have  heen  allowed  such  discnunl,  luit  would  lia\e  heen  eharj;ed 
the  full  amount  whieh  she  has  heen  ehar^ed."  If  the  ease  had  been 
hroutiht  simply  within  that  iirinciple,  that  is  to  say,  if  it  were  a  mere 
division  of  profit  between  the  tradesman  and  the  eommission  aj;ent, 
it  would  stand  upon  a  very  different  footing-.  Aecordiny;  to  that, 
the  charge  paiil  h\-  a  gentleman  huyini;'  an  article  for  himself  would 
have  been  one  thing,  while  a  person  in  the  position  of  a  commission 
agent  going  to  order  it,  and  receiving  a  share  of  the  profit  as  a  con- 
secjuence  of  giving  the  order,  would  have  been  dealt  with  on  a  very 
different  footing. 

What  appears  in  this  case  shews  the  danger  of  allowing  even  the 
smallest  departure  from  the  rule  that  a  person  who  is  dealing  with 
another  man's  money  ought  to  give  the  truest  account  of  what  he 
has  done,  and  ought  not  to  receive  anything  in  the  nature  of  a  pres- 
ent or  allowance  without  the  full  knowledge  of  the  principal  that  he 
is  so  acting.  The  danger  of  allowing  the  smallest  departure,  even  to 
the  extent  these  witnesses  have  carried  it,  is  shewn  in  this  case.  For 
what  does  happen  with  regard  to  an  item  in  this  case?  There  is  the 
gunmaker,  who  says,  "My  price  for  the  guns  was  £86.,  but  before  I 
had  executed  the  order  I  was  told  I  should  have  to  send  them  in  to 
the  defendant,  and  the  defendant  gave  me  to  understand  that  ho 
should  require  £15.  per  cent,  discount  on  this  order,  and  I  imme- 
diately increased  the  price  and  charged  £100.  instead  of  £86.,  in  order 
that  I  might  give  him  the  discount."  That  is  clearly  not  a  trade  dis- 
count. It  is  simply  making  up  a  fictitious  account  against  the  cus- 
tomer, who  has  ultimately  to  pay  it,  in  order  that  the  person  who 
is  paying  it  may  pocket  the  difference  at  the  expense  of  his  em- 
ployer. The  same  thing  occurred  in  the  case  of  Mr.  Williams,  who, 
having  been  called  upon  to  make  an  allowance  of  £15.  per  cent,  to 
the  defendant,  says  that  he  was  astonished  at  the  demand,  and  did 
not  make  it  in  the  sense  of  a  trade  discount,  which  he  would  not 
have  made  to  any  other  person,  a  division  of  profit  between  one 
tradesman  and  the  other.  He  says,  "Having  received  that  intima- 
tion from  the  defendant,  I  immediately  added  to  the  bill  £15.  per 
cent.,  in  order  that  I  might  take  it  off  in  his  favour,"  and  Mr.  Fagg 
says,  "I  allowed  him  the  discount." 

These  cases  all  shew  that  this  was  a  profit  taken  by  the  defendant 
dealing  as  the  agent  for  the  plaintiff,  intended  to  be  concealed,  and 
actually  concealed  from  the  plaintiff,  who  had  not  the  slightest 
knowledge  of  any  custom  of  the  trade  that  such  deduction  would  be 
made.  I  think  the  items  of  charge  complained  of  were  utterly  un- 
warranted, and  that  the  plaintiff  was  fully  entitled  to  come  into  this 
court  to  be  relieverl  from  any  attachment  in  respect  of  a  balance  of 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  5lo 

her  account  based  on  such  charges  as  these,  and  I  again  repeat  that 
the  sooner  this  mode  of  doing  business  is  put  an  end  to  the  better 
for  all  parties  concerned.  I  am  of  opinion  that  the  plaintiflf  is  entitled 
to  an  account  as  prayed  by  the  bill  from  the  17th  of  January,  1865, 
on  taking  which  account  all  discounts  so  charged  must  be  disallowed 
against  the  defendant ;  and,  having  regard  to  the  circumstances  un- 
der which  this  very  large  outfit  was  supplied  under  such  an  order 
as  that  which  was  furnished  by  the  plaintiff  to  him,  there  ought  to  be 
a  reference  to  chambers  to  inquire  how  much  of  that  ought  to  be 
disallowed  in  respect  of  the  outfit,  having  regard  to  the  terms  of  the 
authority  and  any  subsequent  recognition  by  the  plaintiff  of  the 
things  charged. 

The  plaintiff  having  been  driven  to  come  into  this  court  in  conse- 
quence of  the  attachment  in  the  Lord  Mayor's  Court,  and  having 
obtained  relief  upon  the  ground  upon  which  I  hold  her  to  be  entitled 
to  relief,  and  in  consequence  of  the  impropriety  of  the  charges  made 
against  her  in  respect  of  the  sums  alleged  to  have  been  paid  but  in 
truth  not  paid  to  other  persons,  I  hold  she  is  entitled  to  all  the  costs 
of  the  suit  up  to  the  hearing  except  as  to  one  part  of  the  case,  which 
seems  to  have  been  put  into  the  bill  without  any  foundation  whatever, 
viz.,  a  charge  with  regard  to  an  advance  on  jewelry  of  the  plaintiflf's 
daughter,  as  to  which  the  case  has  wholly  failed.  Some  expense  has 
been  incurred  by  the  evidence  given  on  the  one  side  and  on  the  other 
as  to  that  part  of  the  case,  and  the  plaintiff  must  pay  the  defendant 
his  costs  of  that  part  of  the  suit,  and  those  costs  will  be  set  off 
against  the  costs  which  I  have  ordered  him  to  pay  to  her.^^ 


McKINLEY  V.  WILLIAMS. 

(Circuit  Court  of  Appeals  of  the  United  States.  Eighth  Circuit,  1S9G.    74  Fed. 
1)4.  20  C.  C.  A.  312,  .•]«  U.  S.  Ajip.  74'.).) 

Sanhokn,  Circuit  Judge.'-  The  law  guards  the  fiduciary  relations 
with  jealous  care.  It  seeks  to  prevent  the  possibility  of  a  conflict 
between  the  duty  and  the  personal  interest  of  a  trustee.  It  demands 
that  the  agent  shall  work  with  an  eye  single  to  the  interest  of  his  prin- 
cipal. It  prohibits  him  from  receiving  any  compensation  but  his 
commission,  and  forbids  him  from  acting  adversely  to  his  principal, 
cither  for  himself  or  for  others.     It  visits  such  a  breach  of  duty,  not 

n  Apiirovcd  and  llliistiatt-d  in  Morison  v.  'I'lioiniison,  L.  K.  !)  Q.  It.  IS(». 
4:{  L.  .1.  (}.  1'..  21"),  :;(»  ]..  r.  lU'V.  (N.  S.i  n<;'.»,  22  WUI.v.  Uvi*.  s.V.l  dSTIi.  a  cus- 
tom <ir  iisatie  for  a  l>niU.T  to  aiii'i'opi'late  to  liimsclf  the  pmlils  i>f  liis  iiiicnc.v 
l)('V(.iid  Ills  allowed  <oiiiiiiis.sioiis  is  iml  law,  lor  it  inriiii;;<-s  a  fniidaiiifiilnl 
principle  of  riu'lit  an<l  wnnm.  KoMnson  v.  .Moiled.  H  L.  .1.  C  1'.  ■■Hi2,  L.  U. 
7  II.  I,.  S(»2,  ."..'1  L.  T.  oil  (IMli.  leveisini:  2(»  W.  K.  Till.  'Ji>  I>.  T.  Hel'-  <N-  ^O 
207.  L.  U.  7  ('.  V.  St  (1S72);  Tetley  v.  Slianil.  2.'.  L.  T.  Hep.  (N.  S.)  (i'lS,  20 
W.   U.  20!  (1S72). 

'■-  I':ir;  of  ilie  opinion  Is  omitted. 


524  EFFECTS   AND    CONSI^QIKXCKS   OF   TIIIO    UKLATION  (Part    3 

only  with  the  loss  of  the  i^rofits  he  gains,  hnt  witli  the  loss  of  the 
compensation  which  the  faithful  discharge  of  duty  would  have  earned. 
To  permit  the  agent  of  a  vendor  to  hecome  interested,  as  the  pur- 
chaser or  as  the  agent  of  a  purchaser,  in  the  subject-matter  of  the 
agency,  inaugurates  so  dangerous  a  conflict  between  duty  and  self- 
interest,  lliat  the  law  wisely  and  perenijitorily  prohibits  it.  An  agent 
of  a  vendor,  who  speculates  in  the  subject-matter  of  his  agency,  or 
intentionally  becomes  interested  in  it  as  a  purchaser,  or  as  the  agent 
of  a  purchaser,  violates  his  contract  of  agency,  betrays  his  trust, 
forfeits  his  commission  as  agent,  and  becomes  indebted  to  his  princi- 
pal for  the  profits  he  gains  by  his  breach  of  duty.^"*  Warren  v.  Burt, 
12  U.  S.  App.  591,  595,  7  C.  C.  A.  105.  107,  58  Fed.  101,  103; 
Gunn  V.  Black,  19  U.  S.  App.  477,  485,  8  C.  C.  A.  534,  539,  60  Fed. 
151,  156;  Michoud  v.  Girod,  4  How.  503,  554,  555,  11  L.  Ed.  1076; 
Crump  V.  Ingersoll,  44  Minn.  84,  46  N.  W.  141 ;  Hegenmyer  v. 
Marks,  Z7  Minn.  6,  32  N.  W.  785,  5  Am.  St.  Rep.  808;  Jacobus  v. 
Munn,  37  N.  J.  Eq.  48,  53;  Moore  v.  Zabriskie,  18  N.  J.  Eq.  51; 
Perry,  Trusts,  §  919;  Bank  v.  Tyrrell,  27  Beav.  273,  10  H.  L.  Gas. 
26 ;  Panama  &  S.  P.  Tel.  Co.  v.  India  Rubber,  Gutta  Percha  &  Tele- 
graph Works  Co.,  10  Ch.  App.  515,  526;  Bent  v.  Priest,  86  Mo. 
475,  482. 

This  is  not  the  first  time  this  court  has  been  called  upon  to  an- 
nounce these  principles,  but  the  reckless  disregard  of  them,  which 
characterizes  the  acts  of  some  of  the  agents  whose  transactions  are 
portrayed  to  us,  admonishes  us  that  we  cannot  reiterate  them  too 
often,  nor  enforce  them  too  rigidly.  The  court  below  placed  the  de- 
cree from  which  this  appeal  was  taken  upon  these  indisputable  prin- 
ciples. This  decree  avoids  a  contract  of  agency,  deprives  the  agent 
of  his  stipulated  compensation,  and  awards  to  the  principal  a  recovery 
of  $160,827.43,  on  account  of  the  gains  which  it  finds  the  agent  ob- 
tained by  violating  his  contract  of  agency,  and  betraying  his  trust. 
The  agent,  John  McKinley,  appealed  from  this  decree,  and  his  ap- 
peal presents  two  questions :  First.  Does  the  proof  warrant  the  find- 
ing of  the  circuit  court  that  the  appellant  was  the  agent  of  the  ap- 
pellee, John  M.  Williams,  to  sell  leases  upon  his  lands,  when  he  gained 

18  Accord :  Porter  v.  Woodruff,  36  N.  J.  Eq.  174  (1882) ;  U.  S.  v.  Carter,  217 
U.  S.  2SG,  ?.0  Sup.  Ct.  515,  54  L.  Ed.  7G9  (1910).  Even  though  the  agent  ^s  the 
highest  bidder,  and  the  sale  is  public  and  free  from  fraud,  he  must  account 
to  the  principal  for  any  profits.  Kockford  Watch  Co.  v.  Manifold,  36  Neb. 
801,  55  N.  W.  236  (1893).  If  the  agent  learns  that  more  advantageous  terms 
can  be  obtained  than  his  principal  supposes,  it  is  his  duty  to  notify  his  prin- 
cipal. Sncll  V.  Goodlander,  90  Minn.  ,533,  97  N.  W.  421  (190.3).  If  the  agent 
can  secure  more,  it  is  his  duty  to  do  so,  and  if  he  attemi)t  to  keep  it  for  him- 
self, his  principal  can  compel  him  to  account  for  it.  Tilleny  v.  Wolverton, 
46  Minn.  2.56,  48  N.  W.  908  (1892).  If  the  agent  obtains  any  advantage  by 
double  dealing  the  law  will  take  it  from  him.  Euneau  v.  Rieger,  105  Mo.  659, 
16  S.  W.  8.54  (1891);  Bain  v.  Brown,  56  N.  Y.  285  (1874);  Dutton  v.  Willner, 
52  N.  Y.  312  (1873). 

The  agent  cannot  enforce  against  a  third  party  any  agreement  to  give  him 
secret  profits.    Sessions  v.  Payne,  113  Ga.  9.55,  .39  S.  E.  325  (1901). 


Ch.  1)  DUTIES  AND  LIABILITIES  OP  AGENT  TO  HIS  PRINCIPAL  525 

the  profits  with  which  he  is  charged?  And,  second,  if  so,  was  the 
highest  market  vahie,  or  the  amount  wdiich  he  realized  from  the  prop- 
erty which  he  thus  obtained,  the  measure  of  his  habiUty  to  his  prin- 
cipal? 

The  appellee,  Williams,  alleged  in  the  bill  which  he  filed  in  the 
court  below  in  this  case  that  he  was  a  resident  of  Chicago,  111. ;  that 
the  appellant  was  a  resident  of  Duluth,  Minn.;  that  the  latter  was 
his  agent  to  sell  leases  of  certain  mineral  lands,  which  he  owned  in 
Minnesota,  under  a  written  agreement  made  between  them  in  August, 
1891,  to  the  effect  that  the  appellant  should  sell  and  dispose  of  such 
leases  for  the  mutual  interests  of  both  parties  to  the  contract,  and 
should  receive  one-fifth  of  the  revenues  derived  from  these  lands.  He 
also  alleged  that,  to  enable  his  agent  to  sell  such  leases  to  better 
advantage,  he  made  a  formal  lease  of  the  land  to  the  appellant,  so 
that  he  could  make  an  assignment  of  it  in  his  own  name,  or  could 
sublet  the  lands  with  the  written  consent  of  the  appellee;  that  the 
appellant  thereupon  sublet  several  tracts  of  these  lands,  and  sold  his 
apparent  interest  in  them,  under  the  formal  lease  to  him,  for  which 
he  received  large  amounts  of  money,  promissory  notes,  and  stocks 
in  corporations,  which  he  refused  to  account  for  or  to  turn  over  to 
his  principal.  The  prayer  of  the  bill  was  that  the  appellant  should 
account  for,  pay  over,  and  assign  to  the  appellee  all  the  money  and 
property  which  he  had  acquired  from  his  dealings  with  these  lands, 
and  that  the  original  contract  of  agency  should  be  canceled. 

The  appellant  answered  this  bill.  He  alleged  in  his  answer  that 
the  formal  lease,  made  at  the  same  time  as  the  contract  of  agency,  was 
an  actual  lease;  that,  under  it,  he  became  liable  to  pay  the  rents  re- 
served, and  obtained  the  right  to  all  the  profits  he  had  realized  by  sell- 
ing any  part  of  his  leasehold  interest  thereunder,  or  by  subletting  any 
part  of  the  land  described  therein.  He  also  alleged  that  the  appellee 
knew  of  the  profits  he  was  gaining  at  the  times  when  he  received 
them ;  that  he,  nevertheless,  assented  to  the  leases  and  contracts 
through  which  he  obtained  them,  and  consented  that  he  should  retain 
these  profits  for  his  own  benefit.     *     *     * 

The  court  found  that  the  appellant  had  not  made  out  the  extraor- 
dinary contract  set  forth  in  his  answer,  and  affirmed  the  decree  below 
for  appellee. 


'f-{j  KFFIX'TS   AM)    (-ONSKgUErTCES   OF   flllO    UELATION  (I'ait   3 


(B)   Di\iliii(is  Ti///;  ///('  Priiu-if^al 
CONKKY  V.  BOX!)." 

(Court  of  Appoiils  of  Now  YorU.  ISC.T.    IW  N.  Y.  4L'T,  .'5  A1.1).  Proc.  fN.  R.l  41:5.) 

Action  to  rescind  a  salo  oi  slock  in  the  Oswes^o  vSlarcli  Company, 
made  by  defcinlant  to  plaintilT,  and  to  recover  the  ])rice  paid  therefor, 
and  certain  payments  made  hy  the  plaintiff  as  a  stockholder.  The  opin- 
ion shows  the  essential  facts.  Defendant  appealed  from  order  for 
new  trial.    See  34  Barb.  276. 

PoRTEK,  J.  The  fact  that  the  defendant  volunteered  his  agency 
(lid  not  absolve  him  from  the  duty  of  hdelity,  in  the  relation  of  trust 
and  confidence  which  he  sought  and  assumed.  The  plaintiff  was  in- 
duced to  purchase  at  an  extravagant  premium,  stock  of  the  value  of 
which  he  was  ignorant,  on  the  mistaken  representations  of  the  defend- 
ant, who  professed  to  have  none  which  he  was  willing  to  sell.  This 
assurance  very  naturally  disarmed  the  vigilance  of  the  respondent, 
and  he  availed  himself  of  the  defendant's  offer  by  authorizing  him  to 
buy  at  the  price  he  named. 

The  defendant  did  not  buy,  but  sent  him  a  certificate  for  the  amount 
required,  concealing  the  fact  that  he  had  not  acted  under  the  authori- 
ty, and  that  the  stock  transferred  was  his  own. 

There  is  no  view  of  the  facts  in  which  the  transaction  can  be  up- 
held. He  stood  in  a  relation  to  his  principal  which  disabled  him  from 
concluding  a  contract  with  himself,  without  the  knowledge  or  assent 
of  the  party  he  assumed  to  represent.  He  undertook  to  act  at  once 
as  seller  and  as  purchaser.  He  bought  as  agent  and  sold  as  owner. 
The  ex  parte  bargain,  thus  concluded,  proved  advantageous  to  him  and 
very  unfortunate  for  his  principal.  It  was  the  right  of  the  latter  to 
rescind  it,  on  discovery  of  the  breach  of  confidence.  It  is  not  material 
to  inquire  whether  the  defendant  had  any  actual  fraudulent  purpose. 
The  making  of  a  purchase  from  himself  without  authority  from  the 
plaintiff  was  a  constructive  fraud  in  view  of  the  fiduciary  relation 
which  existed  between  the  parties.  In  such  a  case,  the  law  delivers 
the  agent  from  temptation  by  a  presumptio  juris  et  de  jure,  which 
good  intentions  are  unavailing  to  repel.  It  is  unnecessary  to  state  our 
views  more  fully  on  this  question,  as  it  is  fully  and  ably  discussed  in 
the  opinion  delivered  by  Judge  Bacon  in  the  court  below,  34  Barb.  276, 
and  his  conclusions  are  abundantly  fortified  by  authority.  Gillett  v. 
Peppercorne,  3  Beav.  78;  Story,  Agency,  §  214;  Michoud  v.  Girod,  4 
How.  555,  11  L.  Ed.  1076;  Davoue  v.  Fanning,  2  Johns.  Ch.  268,  270; 
Moore  v.  Moore,  5  N.  Y.  262 ;  N.  Y.  Cent.  Ins.  Co.  v.  Protection  Ins. 
Co.,  14  N.  Y.  91 ;   Gardner  v.  Ogden,  22  N.  Y.  347,  78  Am.  Dec.  192. 

The  objection  that  this  theory  is  inconsistent  with  that  stated  in  the 

!•»  Accord:    Siilslmry  v.  Ware.  183  111.  505,  56  N.  K.  140  nO(K)). 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  527 

complaint  is  not  sustained  by  the  record.  The  essential  facts  are  al- 
leged, and  the  appropriate  relief  is  demanded.  The  fact  that  the  com- 
plaint alleged  other  matters  which  the  plaintiff  failed  to  establish,  im- 
pairs neither  his  right  nor  his  remedy.  Utile  per  inutile  non  vitiatur. 
The  order  of  the  Supreme  Court  should  be  affirmed,  with  judg- 
ment absolute  for  the  respondent.    All  concur. 


RICH  V.  BLACK. 

(Supreme  Court  of  Ponusylvania.    isoii.     173  Pa.  02.  33  Atl.  SSO,  37  Wkly. 

Notes  Cas.  499.) 

Bill  for  an  account  and  a  reconveyance  of  real  estate.  Defend- 
ants were  given  the  sale  of  the  land  at  not  less  than  $3,000  per  acre. 
Interlocutory  decree  for  plaintiff.     Defendant  appeals. 

Stekrett,  C.  J.  The  rule  of  public  policy  which  avoids,  at  the 
instance  of  the  cestui  que  trust,  purchases  made  b}'  agents  for  sale,  is 
practically  absolute  in  its  character.  Courts  of  equity  view  such 
transations  with  jealous  eye ;  and  it  is  only  under  special  circum- 
stances, amounting  to  a  dissolution  of  the  trust  relation,  when  the 
parties  have  dealt  at  arm's  length,  that  their  validity  is  recognized. 
Davoue  v.  Fanning,  2  Johns.  Ch.  254.  And  the  reasons  are  obvious. 
On  the  one  hand,  the  relation  which  such  agents  bear  is  confidential, 
and  disarms  the  vigilance  of  their  principals.  It  affords  peculiar  fa- 
cilities for  obtaining  exclusive  information  in  respect  of  the  property 
intrusted  to  them  for  sale.  Their  employment  implies  that  they  have 
superior  advantages  for  making  sales,  and  that  they  will  use  every 
effort  and  means  to  obtain  the  highest  price  for  the  benefit  of  their 
principals.  On  the  other  hand,  their  individual  interest  is  to  purchase 
at  the  lowest  price,  and  places  them  in  a  position  which  is  inconsistent 
with  the  faithful  and  i)roi)cr  discharge  of  the  duties  of  the  trust.  The 
opportunity  will  naturally  lead  to  temptation,  to  abuse,  and,  as  was 
aptly  said  by  Mr.  Chancellor  Kent  in  Davoue  v.  I'anning,  supra,  be 
poisonous  in  its  consequences. 

The  cestui  (|ue  trust  is  not  bound  to  prove,  nor  is  the  court  bound 
to  judge,  that  the  trustee  has  made  a  bargain  advantageous  to  himself. 
The  fact  may  be  so,  and  yet  the  party  not  have  it  in  his  power  distinctly 
and  clearly  to  show  it.  "There  may  be  fraud,"  as  Lord  liardwicke 
observed,  "and  the  party  nr4  able  to  prove  it."  Thus  an  agent,  by 
virtue  of  his  trust  relation,  may  discover  valuable  luinerals  in  the 
land,  and,  locking  tiie  knowledge  in  his  breast,  take  advantage  of  it  in 
making  a  contract  with  his  cestui  f|ue  trust.  If  he  deny  it,  how  can  the 
court  find  the  fact?  "The  probability  is  that  a  trustee  who  has  once 
conceived  such  a  purpose  will  never  disclose  it,  and  the  cestui  que 
trust  will  be  effectually  defrauded."  ICx  parte  Lacey,  6  Ves.  627. 
So  he  may  take  advantage  of  his  superior  knowledge  of  the  market 


528        EFFECTS  AND  CONSEQUENCES  OF  THE  RELATION    (Part  3 

and  skill  in  inanipulalion  to  obtain  results  hcnoficial  to  biinsclf.  "It 
is  to  guard  against  this  uncertainty  and  hazard  of  abuse,  and  to  remove 
the  trustee  from  temptation,  that  the  rule  does  and  will  permit  the 
cestui  que  trust  to  come,  at  his  own  option,  and  without  showing  ac- 
tual injury,  and  insist  upon  having  the  experiment  of  another  sale" 
(Davoue  v.  Fanning,  supra) ;  or,  as  was  held  in  our  own  case  of 
Swisshelm's  Apjical.  56  Pa.  475,  94  Am.  Dec.  107,  treat  the  purchase 
as  inoperative  in  resjiect  of  the  land  unsold  by  the  trustee,  and  com- 
pel an  account  of  the  proceeds  of  sale  made  by  him  to  innocent  pur- 
ciiasers  for  value.  "This  is  a  remedy  that  goes  deep,  and  touches  the 
very  root  of  the  matter."  Davoue  v.  Fanning,  supra ;  Leisenring  v. 
Black,  5  Watts,  303,  30  Am.  Dec.  322;  Parshall's  Appeal,  65  Pa.  224; 
Rice  v.  Davis,  136  Pa.  439,  20  Atl.  513,  20  Am.  St.  Rep.  931 ;  Murphy 
V.  O'Shea,  2  Jones  &  La.  T.  422.  The  cestui  que  trust  must,  it  is 
true,  move  within  a  reasonable  time;  but  what  shall  amount  to  a 
reasonable  time  will  depend  on  circumstances,  and  lies  in  the  discretion 
of  the  court.  In  the  absence  of  special  circumstances  which  may 
lengthen  or  shorten  the  time,  the  analogy  of  the  law  is  followed.  Mar- 
shall's Estate,  138  Pa.  St.  285,  22  Atl.  90. 

These  appellants  misapprehend  the  rationale  of  this  rule.  They 
insist  that  because,  as  they  claim,  the  sale  was  satisfactory  to  Mrs. 
Rich,  the  rule  has  no  application.  Conceding  that  in  the  first  instance 
it  was  satisfactory,  that  fact  would  not  take  away  her  option  to  re- 
scind ;  for  these  appellants  then  and  for  a  long  time  afterwards  os- 
tensibly maintained  towards  her  the  character  of  agents  for  sale,  and 
willfully  concealed  the  fact  of  their  own  interest.  They  maintain 
their  characters  of  inconsistency  even  now  by  claiming  not  only  title 
as  purhasers,  but  commissions  as  agents  for  sale.  Roll,  whom  they 
first  reported  as  the  purchaser,  confessedly  knew  nothing  of  it.  The 
alleged  interest  of  Gillespie  and  Neeb  is  more  than  doubtful,  and,  if  it 
ever  existed,  was  soon  parted  with.  To  all  practical  intents  and  pur- 
poses, these  agents  were  the  real  purchasers,  without  the  knowledge  of 
their  cestui  que  trust.  Rosenberger's  Appeal,  26  Pa.  67.  However 
Mrs.  Rich  may  have  felt  in  the  first  instance  in  regard  to  the  sale, 
it  is  not  likely  that  it  would  have  been  satisfactory  had  she  been  fully 
informed  of  the  facts.  When  she  gave  her  agents  a  minimum  price, 
it  was  manifestly  intended  as  a  guide  to  them  in  negotiating  sale,  and 
implied  a  just  expectation  on  her  part  and  an  engagement  on  theirs 
that  they  would  make  an  honest  endeavor  to  obtain  a  higher  price. 

If  Roll,  Gillespie,  and  Neeb  were  really  intending  purchasers,  the  ob- 
vious course  was  that  these  agents  for  sale  should  take  competitive 
bids.  They  did  not  occupy  the  position  of  middlemen  with  equal  duty 
to  both.  Their  primary  duty  was  to  Mrs.  Rich.  But,  so  far  as  ap- 
pears, no  bona  fide  effort  was  made  by  them  to  perform  this  duty. 
Instead,  Mrs.  Rich  was  asked  to  take  less,  and,  when  this  was  refused, 
they  hastened  to  avail  themselves  of  the  minimum  price  in  their  own 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  HIS  PRINCIPAL  520 

interest,  and  had  already  made  large  profits  before  Mrs.  Rich's  dis- 
covery of  the  facts.  If  they  could  realize  profits  for  themselves,  they 
could  and  should  have  done  so  for  their  cestui  que  trust.  That  was 
their  employment,  and  that  their  undertaking;  and  equity  will  treat 
that  as  done  which  ought  to  have  been  done.  To  sustain  the  pur- 
chase made  in  these  circumstances  would  work  "actual  injury"  to  Mrs. 
Rich,  tend  to  encourage  breaches  of  trust,  and  violate  a  wise  rule  of 
public  policy. 

Having  taken  action  in  time,  the  plaintiff  was  entitled  to  the  relief 
which  the  decree  of  the  court  below  is  intended  to  secure.  Decree 
affirmed,  and  appeal  dismissed,  with  costs  to  be  paid  by  appellants; 
and  it  is  ordered  that  the  record  be  remitted  to  the  court  below  for 
further  proceedings. 


SHANNON  V.  MARMADUKE. 
(Supreme  Court  of  Texas,  1S55.     14  Tex.  217.) 

Land  was  sold  at  public  sale  by  Shannon,  as  agent  of  Marmaduke, 
at  51  cents  per  acre.  Shannon's  brother  becoming  the  purchaser.  Two 
years  later,  the  latter  conveyed  to  Shannon.  Suit  to  have  the  land 
conveyed  to  Marmaduke. 

Wheeler,  J.  It  is  the  well-settled  general  rule  that  a  person  can- 
not act  as  agent  for  another  and  become  himself  the  buyer.  "He 
cannot  be  both  buyer  and  seller  at  the  same  time,  or  connec^  his  own 
interest  in  his  dealings  as  an  agent  or  trustee  for  another.  '  It  is  in- 
compatible with  the  fiduciary  relation.  Emptor  emit  quam  minimo 
potest,  venditor  vendit  quam  maximo  potest.  The  rule  is  founded 
on  the  danger  of  imposition  and  the  presumption  of  the  existence  of 
fraud  inaccessible  to  the  eye  of  the  court.  The  policy  of  the  rule 
is  to  shut  the  door  against  temptation,  and  which,  in  the  cases  in 
which  such  a  relationship  exists,  is  deemed  to  be  of  itself  sufficient 
to  create  the  disqualification.  This  principle,  like  most  others,  may 
be  subject  to  some  qualification  in  its  application  to  particular  cases, 
but,  as  a  general  rule,  it  appears  to  be  well  settled  in  the  English 
and  in  our  American  jurisprudence."  4  Kent,  Com.  438.  It  is  af- 
firmed by  Judge  Story,  in  his  treatise  on  Agency,  that  this  doctrine 
is  recognized  in  the  fullest  manner  by  the  civil  law.  And  he  shows  by 
ample  references  that  it  is  the  fully-recognized  and  well-established 
doctrine,  not  only  of  the  English  and  American  jurisprudence,  but 
also  of  the  civil  law.  This  reason  is  assigned  :  that  there  is  a  natural 
incomyatibility  between  the  interest  of  the  buyer  and  that  of  the 
seller.  /  Story  on  Agency,  §  10.  It  is  a  rule,  he  says,  in  regard  to  the 
duties  of  agents,  which  is  of  general  application,  that  in  mailers  touch- 
ing the  agency  agents  cannot  act  so  as  to  bind  their  princi])als  wlicre 
they  have  an  adverse  interest  in  themselves.  "This  rule  is  founded 
GoDo.rK.&  A.— 34 


530  KFFK(-i's  AM)  c-(K\si;i.)ri;M'i:s  ok  tiik  ki:i-ation        (Part  3 

en  the  plain  and  ohvimis  consiilcration  thai  the  princii)al  hargains,  in 
the  einplovinent  iov  the  exercise  of  ilie  tli:  interested  skill,  diligence, 
■and  zeal  of  the  a.^ent.  for  his  own  exclusive  hencfit."  Id.,  §  210.  et  seq. 
Ahhough  the  fact  is  not  proved  hy  ])ositivc  evidence  that  the  pur- 
chase in  this  instance  was  made  directly  or  indirectly  hy  the  defend- 
ant, yet  the  relationship  suhsisting  hetwcen  himself  and  the  nominal 
purchaser,  the  inadequacy  of  price,  and  more  especially  the  reconvey- 
ance to  the  defendant  unexplained,  alTord  strong  circumstantial  evi- 
dence tending  to  that  conclusion.  Positive  evidence  of  such  secret 
understandings  hetwecn  parties  can  rarely  be  obtained.  They  are, 
by  means  of  such  evidence,  seldom  "accessible  totloe  eye  of  the  court," 
and  hence  the  attendant  circumstances  must  be  |ooked  to  in  order 
to  asceril:ain  the  real  character  of  the  transaction.!  But  there  is  an- 
other ffect  disclosed  by  the  evidence  which  speaks\with  a  controlling 
force.  (That  is  the  admission  of  the  defendant  that  he  was  only 
authorized  to  sell  the  land  when  it  would  bring  three  dollars  per  acre. 
The  instrument  taken  by  the  plaintiff  from  the  defendant  contempo- 
raneously with  the  making  of  the  title  bond  by  Becknell  to  the  latter 
as  evidence  of  the  trust  does  not  contain  an  express  affirmative  power 
to  sell,  but  raises  the  implication  that  such  authority  had  been  confer- 
red. As  the  defendant  was  a  trustee  clothed  with  the  apparent  title, 
a  written  power  was  not  necessary  to  the  making  of  a  legal  convey- 
ance; but  the  trustee  was  bound  to  observe  the  parol  instructions  of 
the  beneficiary.  And  these  were  that  he  was  to  sell  only  when  the 
land  would  bring  three  dollars  per  acre.  Under  these  instructions, 
as  between  himself  and  the  beneficiary  in  the  trust,  however  it  might 
have  been  if  the  question  of  title  had  arisen  between  the  plaintiff  and 
an  innocent  third  person  who  had  purchased  without  notice'  of  the 
trust  or  of  the  instructions  under  which  the  trustee  acted,  the  sale  was 
unauthorized  and  a  fraud  upon  the  rights  of  the  plaintifif./  And  we 
think  it  clear  that  the  defendant,  the  trustee,  cannot  avail  Piimself  of 
his  own  breach  of  trust  to  acquire  the  trust  property  or  derive  benefits 
to  himself. ^"^ 

15  It  is  not  enough  for  the  agent  to  tell  the  principal  that  he  is  personally 
interested  in  the  purchase.  He  must  tell  him  every  material  fact — must  make 
a  full  disclosure.  Dunne  v.  EngUsh,  L.  R.  18  Eq.  524,  31  L.  T.  75  (1874) ; 
Murphv  V.  O'Shea,  2  .Tones  &  La.  422,  8  Irish  Law,  Kec.  329  (1845);  Molony 
V.  Keriian,  2  Dr.  &  War.  38  (1S42). 

It  matters  not  that  the  enii)loyment  is  to  sell  at  a  fixed  price.  The  agent 
must  put  off  the  character  of  agent  when  he  assumes  that  of  the  principal, 
liuckman  v.  Bergholz,  37  N.  J.  Law,  437  (1874).  If  the  agent  buys  for  less 
than  the  goods  are  worth,  he  is  accountable  to  the  principal  for  the  difference. 
Pierce  Co.  v.  Beers,  190  Mass.  199,  76  N.  E.  603  (1906).  The  interests  of  the 
buyer  and  seller  are  conflicting,  and  the  law  will  not  allow  the  agent  to  act 
for  the  seller  and  at  the  same  time  be  the  buyer.  White  v.  Ward.  26  Ark. 
445  (1871).  It  will  not  aid  that  he  paid  more  than  any  one  else  would  have 
paid,  Pensonneau  v.  P.leakley,  14  111.  15  (lS.-)2);  and  that  he  l)onght  under 
cover  of  the  name  of  a  third  person,  but  for  more  than  the  property  was  then 
worth,  Robertson  v.  Chapman,  152  U.  S.  673,  14  Sup.  Ct.  741,  38  L.  Ed.  592 
(1894). 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  niS  PRINCIPAL  531 

Considering  the  price  actually  paid  for  the  land  and  its  value,  it  is 
scarcely  to  be  supposed  that  the  defendant  could  have  believed  he 
was  acting  fairly  and  honestly  towards  the  plaintiff  to  suffer  the  land 
to  be  bid  oft'  at  a  price  so  grossly  inadequate ;  and  the  reconveyance 
to  himself  under  the  circumstances  aft'ords  strong  reason  to  conclude 
that  the  purchase  was  collusively  made  for  his  benefit.  And  if  the 
determination  of  the  question  submitted  to  the  jury  rested  on  this 
evidence  alone,  we  should  hesitate  much  to  disturb  the  verdict.  But 
when  taken  in  connection  with  the  admission  of  the  defendant  respect- 
ing the  price  at  which  he  was  authorized  to  sell,  we  think  it  free 
from  doubt  that  the  verdict  was  fully  warranted  by  the  evidence. 

It  is  suggested  in  argument  that  the  sum  for  which  the  land  actu- 
ally sold  was  better  evidence  of  its  real  value  than  the  testimony  of 
the  witnesses.  We  think  otherwise.  The  reduced  price  at  which  the 
sale  was  made  is  fully  accounted  for  in  the  fact  that  the  fairness  of 
the  sale  was  questioned  at  the  time,  and  that  doubtless  deterred  bid- 
ders. The  statement  of  facts,  we  think,  establishes  beyond  question 
the  land  to  have  been  of  the  value  at  which  it  was  estimated  by  the 
parties  and  the  witnesses.  And  if  it  were  really  of  less  value,  that 
would  not  affect  the  application  of  the  principles  on  which  it  must 
be  held  that  the  defendant,  acting  as  the  trustee  and  agent  of  the 
plaintiff,  did  not  acquire  a  title  to  the  property  as  against  the  latter. 
The  judgment  is  affirmed. 


FORLAW  V.  AUGUSTA  NAVAL  STORES  CO. 

(Supreme  Court  of  Georgia,  1005.     124  Ga.  201,  52  S.  E.  898.) 

Petition  for  the  appointment  of  a  receiver  to  take  charge  of  certain 
properties,  for  a  reconveyance  to  petitioners  of  certain  leases,  and  for 
a  general  accounting. 

BiXK,  J.^"  *  *  *  f  j-iis  case  is  clearly  within  the  fundamen- 
tal equitable  principle  laid  down  in  the  sixth  hcadnote.  It  is  true 
that  Forlaw  was  not  nominally  the  agent  of  the  plaintiff's  in  this  case. 
He  was  the  agent  of  the  Ellis-Young  Company,  who  were  the  factors 
of  the  plaintiffs;  but  he  brought  himself  within  confidential  relations 
of  a  fiduciary  character  with  Heath  and  Ilogan  when  he  and  Young,  by 
advising  with  the  former  and  suggesting  material  changes  in  the  terms 
of  the  lease  which  had  been  contracted  for  with  the  Woodward  Lum- 
ber Company,  inrluccd  them  to  waive  their  (i)laintiff's)  interest  and 
right  in  tlie  turpentine  j)rivilcges  in  the  Casliin  mill  tract,  so  that  a  new 
lease  might  be  obtained  from  the  lumber  company  of  the  turpentine 
privileges  on  this  valuable  tract  of  land.  It  is  true  that  Forlaw  look  the 
lease  from  the  lumber  company  to  himself  individually,  but  this  was 
under  an  agreement  and  understanding  between  him  and  the  plaintiffs, 

i"I'nrt  of  thf  n|.iiii<)ii  is  omitd'il. 


532  EFFECTS   AND   CONSIOQUKNCES   OF   THE    RELATION  (Part   3 

according  to  which  a  corporation  shouUl  he  formed  and  a  one-third  ni- 
terest  of  the  stock  thereof  taken  hy  Heath  and  Hogan,  the  Elhs- Young 
Company  fnrnishing  them  the  money  with  which  to  pay  for  the  same. 
So  the  new  lease  of  the  mill  tract,  whether  Heath  and  Hogan,  or  the 
Ellis- Young  Company,  or  Forlaw  were  named  therein  as  lessees,  was 
for  the  benefit  of  the  corporation  which  was  to  be  created;  that  is,  for 
the  benefit  of  the  incorporators,  two  of  whom  were,  under  the  stipula- 
tions set  forth  in  the  petition,  to  be  these  plaintiffs.  When  Forlaw 
went  to  the  Woodward  Lumber  Company  to  secure  the  new  lease,  he 
went  armed  with  knowledge,  with  authority,  with  power  he  had  ac- 
quired because  of  the  confidential  relations  into  which  he  had  been 
brought  with  the  two  men  who  are  now  seeking  equitable  relief. 

The  plaintiffs  themselves,  through  Forlaw,  had  opened  negotiations 
with  the  ^^'oodward  Lumber  Company,  which  resulted  in  an  agreement 
being  reached  whereby  the  lumber  company  agreed  to  sell  the  entire 
turpentine  privileges  on  the  Cashin  mill  tract  for  a  fixed  sum,  waiving 
its  rights  to  a  part  of  the  profits  arising  from  the  business  which  had 
been  stipulated  for  in  the  first  contract.  The  lease  to  Forlaw  could 
not  have  been  obtained  but  for  the  agreement  and  consent  of  the  plain- 
tiffs that  it  should  be  made,  or  that  agreement  and  consent  had  but  for 
the  confidence  reposed  by  the  plaintiffs  in  Young  and  Forlaw.  The 
latter  and  certain-named  associates,  neither  of  whom  were  Heath  or 
Hogan,  proceeded  to  secure  a  charter  for  a  corporation  under  the  name 
of  the  "D.  J.  Forlaw  Company,"  but  with  the  identical  object  and  the 
same  rights,  powers,  and  privileges  as  had  been  contemplated  for  the 
corporation  agreed  upon  between  himself,  Young  and  the  plaintiffs. 
To  rule  that  the  Ellis- Young  Company  was  to  be  permitted  to  hold  the 
leases  assigned  to  it  to  the  turpentine  privileges  in  the  3,713  acres  and 
the  lease  to  the  Cashin  mill  tract,  executed  to  Forlaw  and  assigned  by 
him  to  the  Ellis- Young  Company,  would  be  a  holding  at  variance  with 
the  doctrine  established  by  numerous  authorities,  and  it  would  be  un- 
supported by  any  authority  to  which  our  attention  has  been  directed. 

The  safe  principle  and  sound,  under  the  facts  of  a  case  like  this, 
seems  to  be  one  announced  in  the  American  note  to  Keech  v.  Sandf  ord, 
1  Lead.  Cas.  Eq.  53,  where  it  was  thus  forcibly  and  comprehensibly  ex- 
pressed: "Wherever  one  person  is  placed  in  such  relation  to  another, 
by  the  act  or  consent  of  that  other,  or  the  act  of  a  third  person,  or  of 
the  law,  that  he  becomes  interested  for  him,  or  interested  with  him,  in 
any  subject  of  property  or  business,  he  is  prohibited  from  acquiring 
rights  in  that  subject  antagonistic  to  the  person  with  whose  interests  he 
has  become  associated."^ ^  And  in  the  case  of  Conant  v.  Riseborough, 
139  111.  391,  28  N.  E.  791,  it  was  said:  "The  principles  applicable  to 
the  facts  of  this  case  are  well  settled  by  the  authorities.  1  'If  confidence 
is  reposed,  it  must  be  faithfully  acted  upon  and  preseirved  from  any 

17  The  temptation  of  self-interest  Is  too  powerful  and  Insinuating  to  be 
trusted;  and  it  must  be  removed  by  taking  away  the  right  to  hold  the  prop- 
erty purchased.     Dennis  v.  McCagg,  32  111.  429  (1863).     See,  also,  note,  p.  52i. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  533 

intermixture  of  imposition.  If  influence  is  acquired,  it  must  be  kept 
free  from  the  taint  of  selfish  interest  and  cunning  and  overreaching 
bargains.'  1  Story's  Eq.  Jur.  §  308.  Where  a  person  is  intrusted  as 
a  confidential  agent  with  the  conduct  of  business  where  he  professes 
not  to  act  for  himself,  but  for  others  who  have  placed  their  confidence 
in  him,  he  is  disabled  in  equity,  even  though  he  may  be  a  volunteer, 
from  dealing  in  the  matter  of  his  agency  on  his  own  account.*  'The 
agency  being  established,  he  will  be  compelled  to  transfer  the  b^efit  of 
his  contract,  although  he  may  swear  that  he  purchased  on /is  own 
account.'  Dennis  v.  McCagg,  32  111.  429.  The  rule  applies,  r/t  only  to 
persons  standing  in  a  direct  fiduciary  relation  towards  others,  but  also 
to  those  who  occupy  any  position  out  of  which  a  similar  duty  ought, 
in  equity  and  good  morals,  to  arise.  No  party  can  be  permitted  to  pur- 
chase an  interest  when  he  has  a  duty  to  perform  which  is  inconsistent 
with  the  character  of  a  purchaser.  Davis  v.  Hamlin,  108  111.  39,  48 
Am.  Rep.  541 ;  Vallette  v.  Tedens,  122  111.  607,  14  N.  E.  52,  3  Am.  St. 
Rep.  502."  And  the  facts  demanding  the  application  of  these  rules 
and  principles,  the  statute  of  frauds  cannot  be  invoked  to  prevent  it. 

If  the  allegations  of  the  equitable  petition  in  this  action  are  true  (and 
they  are  to  be  taken  as  true  as  against  the  demurrer),  the  Ellis- Young 
Company,  the  factors  of  plaintiffs,  stand  in  a  fiduciary  relation  to  them, 
and,  if  the  fraud  and  conspiracy  alleged  can  be  proved,  are  trustees  ex 
malificio;  and  the  same  is  true  of  Forlaw,  in  whose  name  the  lease 
from  the  Woodward  Lumber  Company  was  executed,  should  the  same 
charges  be  established  by  the  evidence.  In  another  well-reasoned  opin- 
ion from  the  court  last  quoted,  we  have  the  following  ruling  which 
strengthens  the  conclusion  we  have  reached  in  the  case  at  bar :  "Where 
a  confidential  agent  of  one  having  a  lease  of  a  theater,  who,  from  his 
position,  was  well  acquainted  with  the  profits  of  his  principal  in  the 
use  of  the  building,  and  who  knew,  some  months  before  the  old  lease 
expired,  that  the  latter  was  desirous  of  renewing  his  lease,  offered  pri- 
vately to  lease  the  theater  of  the  owner,  proposing  to  give  a  larger 
rental  than  was  reserved  in  the  old  lease,  and  denied  to  his  principal 
that  he  was  competing  with  him  for  the  lease,  but  in  fact  did  procure 
a  lease  to  be  made  to  himself,  it  was  held,  that  the  benefit  of  such  lease 
a  court  of  ecjuity  would  hold  to  inure  to  his  principal,  and  that  the 
agent  would  be  held  to  h(jld  the  same  as  trustee  for  his  principal." 
Davis  V.  Hamlin,  cited  supra. 

It  was  contended  by  counsel  for  the  losing  party  in  that  case  that 
the  rule  which  the  court  applied,  which  holds  an  agent  to  be  a  trustee 
for  his  principal,  had  no  particular  application  to  the  case,  because 
Davis,  the  agent,  was  not  an  agent  to  obtain  a  renewal  of  the  lease,  and 
was  not  charged  with  any  duly  in  regard  thereto ;  that  his  was  but  the 
specific  employment  to  engage  amusements  for  the  theater,  and  that 
he  was  only  an  agent  within  the  scope  of  that  employment ;  that  Ham- 
lin, having  a  lease  which  would  expire  on  a  certain  date,  had  no  right 
or  interest  in  the  property  tliereafter.  an<l  that   Davis  "in  neg<;tialing 


534  EFFECTS   AND    CONSKQUKXOKS   OF   THE    RELATION  (Part   3 

tor  the  lease  did  lun  deal  with  any  jMoperly  wherein  he  luul  an  inter- 
est, and  iliat  the  leased  property  was  not  the  subject-matter  of  any 
trust  between  them."  It  was  further  argued  that  the  relation  there  be- 
tween Hamlin  and  Davis  was  only  one  of  master  and  servant  or  of 
employer  and  employe,  and  that  the  rule  had  never  been  applied  to  that 
relation  as  a  elass,  "that  the  classes  coming  within  that  doctrine  are 
embraced  within  the  list  of  dctineil  confidential  relations,  such  as  trus- 
tees and  beneficiary,  guardian,  and  ward,  etc."  But  the  court  rejilicd 
that  the  subject  was  not  comi)reliended  within  any  such  narrowness  of 
view,  but  that  in  applying  the  rule,  it  is  the  nature  of  the  relation  which 
is  to  be  regarded,  and  not  the  designation  of  the  man  filling  the  relation. 
Or.  as  clearly  expressed  in  an  elementary  work  on  Equity,  "The  rule 
under  discussion  applies  not  only  to  persons  standing  in  a  direct  fiduci- 
ary relation  towards  others,  such  as  trustees,  executors,  attorneys,  and 
agents,  but  also  to  those  who  occupy  every  position  out  of  which  a 
similar  duty,  in  equity  and  good  morals,  ought  to  arise."  ^^  Bishop, 
Eq.  §  93.  See,  also,  Fricker  v.  Americus  Mfg.  Co.,  124  Ga.  165,  52 
S.  E.  65. 

And  we  have  no  hesitancy  in  affirming  the  judgment  overruling  the 
demurrers  of  Forlaw  and  the  Ellis-Young  Company.  *  *  *  Judg- 
ment in  each  case  affirmed.    All  the  Justices  concurring. 

isTbe  disability  extends  to  any  clerks  or  agents  of  the  apent.  To  hold 
otherwise  would  be  to  open  the  doors  to  evasion  iind  niilliiication  of  the  rule. 
Gardner  v.  Oftdeu,  22  N.  Y.  350,  78  Am.  Dec.  lt)2  (ISOO) ;  Burke  v.  Bours.  92 
Cal.  108,  28  Pac.  57  (1891).  On  second  aiipeal,  see  98  Cal.  171,  32  Pac.  980, 
post,  p.  539  (1893).  Also  to  any  partnership  or  corporation  in  which  the  agent 
is  a  party.  Bedford  Coal  Co.  v.  I'arke  County  Coal  Co.,  44  Ind.  App.  390,  89 
N.  E.  412  (1909). 

If  the  agent  sells  to  himself  and  resells  at  a  profit  he  must  account  to  the 
principal  for  this  profit.  McNutt  v.  Dix,  S3  Mich.  328,  47  N.  W.  212,  10  L. 
R.  A.  ()<)0  (1890).  A  sale  by  the  agent  to  himself  is  not  void,  but  voidable  at 
the  option  of  the  principal,  and  if  he  does  not  dissent  no  one  else  can  ob.iect. 
Tf  he  ratifies  the  sale,  it  is  valid  even  as  to  him.  Eastern  Bank  v.  Taylor,  41 
Ala.  93  QS67).  If  he  does  not,  he  may  treat  the  agent  as  holding  in  trust 
for  his  principal.  Krutz  v.  Fisher,  8  Kan.  90  (1871),  in  which  the  agent  bought 
his  principal's  lands  at  a  tax  .sale.  The  mere  fact  that  the  principal  has 
failed  to  put  the  agent  in  funds  to  pay  the  taxes  will  not  justify  the  agent  in 
procuring  and  holding  the  tax  title.  Bowman  v.  Olflcer,  53  Iowa,  640,  6 
N.  W.  28  (18.S0).  The  agent  nia.v  retain  the  amount  paid  for  taxes  and  other 
proper  expenditures,  but  beyond  this  he  holds  for  the  principal.  Barton  v. 
Moss,  32  111.  55  (18(J3).  The  agent  is  equally  incapacitated  to  become  a  pur- 
chaser of  his  principal's  property  at  a  mortgage  .sale.  Adams  v.  Sayre,  70 
Ala.  318  (1881) ;  Kimball  v.  Kanney,  122  Mich.  160,  80  N.  AV.  992,  46  L.  R.  A. 
403,  80  Am.  St.  Rep.  548  (1899),  containing  a  review  of  the  cases. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  535 

GOWER  V.  ANDREW. 

(Supreme  Court  of  California,  18S1.     59  Cal.  119,  43  Am.  Rep.  242.) 

Action  to  compel  transfer  of  a  lease,  and  application  for  injunction 
pendente  lite  to  restrain  defendants  from  proceeding  to  recover  the 
premises. 

MvRiCK,  J.  This  is  an  appeal  from  an  order  refusing  to  grant  an 
injunction.  The  facts  as  presented  by  the  pleadings  and  affidavits  are 
substantially  as  follows : 

The  plaintiffs  were  warehousemen,  and  as  such  occupied  certain 
premises  as  tenants  of  the  defendant  Hopkins.  The  defendant  An- 
drew was  their  clerk  or  agent  in  and  about  the  business,  and  had 
access  to  their  books  and  papers,  and  knowledge  of  the  business  and 
their  customers.  The  lease  under  which  plaintiffs  held  the  premises, 
at  a  monthly  rental  of  $400,  was  about  to  expire,  viz.,  on  the  1st  of 
November,  1879.  During  some  month  or  two  prior  to  the  expiration 
of  the  lease,  plaintiffs  were  negotiating  with  Hopkins  for  a  renewal  of 
the  lease  at  a  reduced  rental,  but  their  minds  had  not  met  as  to  whether 
there  would  be  a  renewal.  During  the  same  time  the  defendant  An- 
drew was,  without  the  knowledge  of  plaintiffs,  negotiating  with  Hop- 
kins for  a  lease  of  the  premises  to  himself  and  the  defendant  Ross. 
During  such  negotiations,  defendant  Andrew,  without  authority  from 
plaintiffs,  told  Hopkins  that  plaintiffs  would  probably  give  up  the 
warehouse,  and  if  so  he  would  take  it  at  $450  per  month.  Hopkins, 
without  receiving  definite  information  from  plaintiffs  that  they  intend- 
ed to  surrender  the  premises,  but  believing  that  such  would  be  the 
case,  gave  to  the  defendants,  Andrew  and  Ross,  a  lease  of  the  premises 
for  four  years  from  November  1st,  1879,  at  a  monthly  rental  of  $450. 
Andrew's  object  in  obtaining  the  lease  was  to  enter  into  the  business 
of  warehousing  with  Ross  on  their  own  account ;  and  Andrew  solicited 
from  some  of  the  customers  of  j^laintiffs  at  the  warehouse  their  storage 
business,  stating  that  "he  had  become  the  lessee  of  the  warehouse  be- 
cause Gower  &  (oilman  did  not  want  it  any  longer."  During  all  this 
time  Andrew  was  in  the  employ  of  plaintiffs.  As  soon,  however,  as 
they  learned  that  he  had  taken  the  lease  he  was  disnu'sscd. 

We  think  the  injunction  should  have  been  granted.  The  granting 
or  refusing  to  grant  an  injunction  is  very  much  within  the  discretion 
of  the  court  to  which  the  application  is  made;  and  an  appellate  court 
will  not  interfere  unless  a  right  clearly  appears  to  exist.  We  think, 
however,  that  the  facts  before  us  clearly  show  a  case  where  ])laintiffs 
if  they  shall  fnially  substantiate  those  facts,  will  be  entitled  to  relief. 
We  understand  it  to  be  the  duty  of  the  employe  to  devote  his  entire 
acts,  so  far  as  his  acts  may  affect  the  business  of  his  employer,  to  the 
interest  and  service  of  the  emjiloyer ;  that  he  can  engage  in  no  business 
detrimental  to  the  business  of  the  cnijjloycr ;  and  that  he  slu)ul(l  in  no 
case  be  permitted  to  do  for  his  own  benefit  that  which  would  have  the 


n^iG  EFFECTS   AND    CONSKQUENCES   OF  THE    UELATION  (Pait   3 

cti'cct  of  dcslroying  the  l)iisiiK'ss  to  sustain  and  carry  on  which  his 
services  have  been  securctl.  An  agent  should  not,  any  mure  than  a 
trustee,  adopt  a  course  tlial  will  operate  as  an  inducement  to  postpone 
the  principal's  interest  to  his  own.  An  agent  or  sub-agent  who  uses  the 
information  he  has  obtained  in  the  course  of  his  agency  as  a  means  of 
buying  for  himself,  will  be  compelled  to  convey  to  the  principal. 
Klliott  V.  Merry  man,  1  Lead.  Cas.  Eq.  91. 

It  may  be  saiil  that  Andrew  was  not  the  agent  of  plaintiffs  so  far  as 
concerns  the  obtaining  of  a  renewal  of  the  lease;  that  he  was  not 
charged  with  the  duty  of  obtaining  a  renewal;  it  must,  however,  be 
said  that  he  was,  by  virtue  of  his  employment,  charged  with  the  duty 
of  furthering  their  interest,  and  with  the  duty  of  not  using  the  in- 
formation obtained  by  him  as  their  employe  to  their  detriment.  It 
seems  to  us  that  if  Andrew  desired  to  engage  in  the  same  business  as 
his  employers,  on  his  ow^n  account,  a  very  plain  and  very  proper  course 
was  open  to  him,  viz.,  to  state  to  them  all  the  facts,  and  ask  them  to 
determine  whether  they  desired  a  renewal.  By  pursuing  the  course 
which  he  did,  he  gave  to  Hopkins  an  inducement  not  only  not  to  give 
plaintiffs  a  renewal  at  a  decreased  rental,  but  also  an  inducement  not 
to  renew  at  the  then  rental ;  and  he  compelled  plaintiffs  to  have  an  un- 
known competitor  who  based  his  action  upon  knowledge  acquired  by 
him  while  in  their  employ.  We  do  not  think  that  this  is  equity  or  good 
conscience. 

The  order  refusing  the  injunction  is  reversed.^' 


VAN  DUSEN  V.  BIGELOW. 

(Supreme  Court  of  North  Dakota,  1904.     13  N.  D,  277,  100  N.  W.  723,  G7  L. 

R.  A.  288.) 

Morgan,  J. 2°  This  equitable  action  is  brought  for  a  reconveyance 
of  certain  real  estate  which  was  conveyed  to  the  defendant  by  the 
plaintiff  while  defendant  is  alleged  to  have  been  plaintiff's  agent  for 
the  sale  of  such  real  estate  and  failed  to  communicate  to  plaintiff  that 
he  had  received  an  offer  for  said  land  for  a  much  larger  sum  than  that 
for  which  the  plaintiff  sold  the  same  to  the  defendant.  *  The  substance 
of  the  allegations  of  the  complaint  is  that  defendant  took  advantage  of 
the  confidence  reposed  in  him  by  plaintiff  as  her  agent  and  purchased 
the  land  himself,  under  fraudulent  concealment  of  facts,  for  a  sum 
much  less  than  that  which  he  could  have  sold  it  for,  and  much  less  than 
the  actual  value  of  the  land.  In  the  complaint  plaintiff  offers  to  re- 
turn all  money  and  the  security  received  by  her  from  the  defendant 
under  such  conveyance.  The  defendant  by  answer  denies  that  he  was 
plaintiff's  agent  for  the  sale  of  such  land,  and  denies  that  he  was 

19  The  dissenting  opinion  of  Thornton,  J.,  is  omitted. 

20  Part  of  the  opinion  is  omitted. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  537 

offered  a  larger  sum  for  such  land  than  he  paid  for  it,  and  denies  that 
he  fraudulently  concealed  any  facts  from  plaintiff,  and  denies  that  the 
land  was  worth  any  more  than  he  paid  for  the  same.  Whether  de- 
fendant was  plaintiff's  agent  for  the  sale  of  her  lands,  and  whether  de- 
fendant had  an  offer  for  the  land  of  $1,400  when  he  purchased  it  for 
himself  for  $900,  were  the  issues  that  were  contested  at  the  trial.  The 
trial  court  found  against  the  defendant  on  both  these  issues,  and  or- 
dered that  a  reconveyance  be  made  upon  restoration  by  plaintiff  of  all 
that  she  had  received  under  the  sale.  The  defendant  appeals  from  a 
judgment  rendered  on  such  findings,  and  requests  a  review  of  the 
entire  record  under  section  5630,  Rev.  Codes  1899.     *     *     * 

That  he  was  in  correspondence  with  her  about  the  sale  and  value  of 
this  land,  and  advised  her  concerning  the  same,  is  undisputed,  and  is 
shown  by  his  own  letters  outside  of  Exhibit  A.  That  he  was  her  sole 
agent  to  care  for  her  other  property  is  also  beyond  dispute.  That  he 
alone  looked  after  all  her  interests  in  Jamestown  and  vicinity  is  also 
beyond  question.  Defendant  w^as  her  agent  as  to  certain  matters,  and 
as  to  those  matters  he  had  her  confidence,  and  as  to  those  matters  she 
relied  on  his  judgment.  \\'hether  he  was  her  authorized  agent  to  sell 
the  land — that  is,  whether  he  was  such  agent  in  respect  to  the  sale  of 
the  land  that  his  contract  for  the  sale  of  the  land  would  bind  her — 
need  not  be  determined.  We  think  that  he  was  her  agent  in  respect  to 
the  land,  and,  as  such  agent,  he  was  under  obligations  to  advise  her 
fully  as  to  all  facts  within  his  knowledge  bearing  upon  the  value  of 
the  land,  and  upon  all  matters  in  reference  to  the  sale  thereof.  De- 
fendant had  been  her  agent  for  several  years.  We  think  the  evidence 
in  the  record,  outside  of  Exhibit  A,  is  sufficient  to  show  that  he  was 
her  agent  to  sell  this  land.  That  such  agency  to  sell  the  land  is  not 
shown  by  explicit  writing  is  entirely  immaterial  in  this  kind  of  action. 
It  is  not  a  case  of  enforcing  a  contract  against  a  principal  made  by  an 
agent  with  a  third  person. 

In  a  case  like  the  one  at  bar  the  agency  may  be  shown  by  parol,  as 
there  is  no  statutory  prcivision  that  rec|uires  an  agency  to  negotiate  for 
a  sale  to  be  in  writing,  lit  is  the  confidential  relation  existing  between 
them,  followed  by  congcalment  of  facts,  that  is  the  gist  of  the  cause  of 
action.  He  was  her  agent  for  specific  purposes  connected  with  this  land 
and  with  her  other  property.  By  virtue  of  such  agency  he  became  ac- 
quainted with  the  value  of  the  land,  and  knew  that  she  knew  nothing 
of  its  value,  and  that  she  was  relying  wholly  upon  him.  It  is  the  ex- 
istence of  such  confidence,  arising  out  of  their  business  relations  as 
to  a  specific  agency,  that  gives  rise  to  a  duty  on  his  part  to  disclose  all 
facts  known  to  him  in  reference  to  the  value  of  the  land  if  he  chose  to 
buy  it  himself.  It  is  not  claimed  that  he  made  false  or  fraudulent 
statements.  It  is  claimed  that  he  should  have  disclosed  that  he  had  an 
offer  of  $1,400  for  the  land  when  he  bought  it  for  $900.  and  that  this 
was  a  fraudulent  concealment.  The  relations  existing  between  them, 
as  shown  by  the  evidence  referred  to,  was  such  as  demanded  frank 


538  EFFECTS   AND   ODNSKgrKNi'KS   OF   TIIIO    KIOI.ATION  (Part   3 

and  full  disclosures  of  all  facts  known  to  him  bearing  on  the  value  of 
the  land  before  he  could  become  a  pmchaser  of  the  same,  although 
avoweilly  made  for  himself. 

In  Xorris  v.  Tayloe.  4*)  111.  17.  95  Am.  Pec.  .5(,8,  it  was  said:  "Where 
a  party  accepts  the  position  of  an  agent  to  take  charge  of  the  lands  of 
his  principal,  collect  the  rents  and  royalty,  and  pay  taxes,  a  fiduciary 
and  confidential  relation  is  thereby  created  in  regard  to  everything  re- 
lating to  such  lands,  and  in  treating  with  his  principal  for  the  property 
the  agent  is  bound  to  make  the  fullest  disclosures  of  all  matters  con- 
nectetl  therewith,  within  his  knowledge,  which  it  is  important  for  his 
principal  to  know  in  order  to  treat  understandingly." 

In  Davis  v.  Hamlin,  108  111.  39,  48  Am.  Rep.  541,  it  was  said:  "It 
is  contended  by  appellant's  counsel  that  the  rule  we  apply,  which  holds 
an  agent  to  be  a  trustee  for  his  principal,  has  no  application  to  the  case 
at  bar,  because  Davis  was  not  an  agent  to  obtain  a  renewal  of  the  lease, 
and  was  not  charged  with  any  duty  in  regard  thereto ;  that  his  was  but 
a  specific  employment  to  engage  amusements  for  the  theater,  and  that 
he  was  agent  only  w^ithin  the  scope  of  that  employment ;  that  Hamlin, 
having  a  lease  which  would  expire  April  16,  1883,  had  no  right  or 
interest  in  the  property  thereafter;  and  that  Davis,  in  negotiating  the 
lease,  did  not  deal  with  any  property  wherein  Hamlin  had  any  interest, 
and  that  such  property  was  not  the  subject-matter  of  any  trust  between 
them.  Although  there  was  no  right  of  renewal  of  the  lease  in  the 
tenant,  he  had  a  reasonable  expectation  of  its  renewal  which  courts  of 
equity  have  recognized  as  an  interest  of  value,  secretly  to  interfere 
with  which  and  disappoint,  by  an  agent  in  the  management  of  the 
lessee's  business,  we  regard  as  inconsistent  with  the  fidelity  which  the 
agent  ow^es  to  the  business  of  his  principal.  *  *  *  in  applying  the 
rule,  it  is  the  nature  of  the  relation  which  is  to  be  regarded,  and  not 
the  designation  of  the  one  filling  the  relation." 

In  Cook  V.  Berlin  Woolen  Mills  Co.,  43  Wis.  433,  the  court  said : 
"But  whatever  may  be  the  nature  of  the  agency,  a  court  of  equity  re- 
gards every  purchase  by  an  agent  from  his  principal  with  jealous  scru- 
tiny, to  see  that  the  agent  takes  no  advantage  from  the  confidence  of 
his  principal;  with  jealousy  almost  invincible,  as  Judge  Story  calls  it; 
and  there  is  a  class  of  agents  who  are  held  to  a  very  strict  rule,  a  good 
deal  like  the  rule  which  courts  of  equity  once  generally  applied  to  trus- 
tees, and  some  few  courts  still  apply.  When  the  nature  of  the  agency 
has  given  the  agent  control  in  the  management  of  the  principal's  prop- 
erty, and  peculiar  opportunity  of  knowing  its  condition  and  value,  a 
purchase  of  it  by  the  agent  will  be  avoided  at  the  suit  of  the  principal, 
unless  the  agent  make  it  affirmatively  appear  that  the  transaction  was 
fair,  and  that  he  imj)arted  to  the  principal  all  his  information  concern- 
ing the  property,  and  acted  throughout  uberrima  fide." 

Pomeroy  on  Equity  Jurisprudence  (volume  2,  §  959)  lays  down  the 
rule  as  follows :  "Any  unfairness,  any  underhanded  dealing,  any  use  of 
knowledge  not  communicated  to  the  principal,  any  lack  of  the  perfect 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  HIS  PRINCIPAL  531) 

good  faith  \vhich  equity  requires,  renders  the  transaction  voidable,  so 
that  it  will  be  set  aside  at  the  option  of  the  principal.  If,  on  the  other 
hand,  the  agent  imparted  all  his  own  knowledge  concerning  the  matter, 
and  advised  his  principal  with  candor  and  disinterestedness  as  though 
he  himself  were  a  stranger  to  the  bargain,  and  paid  a  fair  price,  and 
the  principal  on  his  side  acted  with  full  knowledge  of  the  subject- 
matter  of  the  transaction  and  of  the  person  with  whom  he  was  dealing, 
and  gave  a  full  and  free  consent — if  all  these  are  affirmatively  proved, 
the  presumption  is  overcome  and  the  transaction  is  valid." 

See,  also,  Ingle  v.  Hartman,  37  Iowa,  274;  Rubidoex  v.  Parks,  48 
Cal.  215;  Cottom  v.  Holliday,  59  111.  176;  Jackson  v.  Pleasonton,  95 
Va.  654,  29  S.  E.  680;  Andrews'  Am.  Law,  p.  813.  and  cases  cited; 
Mechem  on  Agency,  §  466,  and  cases  cited ;  1  Am.  &  Eng.  Enc.  of  Law, 
p.  1081,  and  cases  cited;  Wharton  on  Agency,  §  235,  and  cases  cited; 
Ruckman  v.  Bergholz.  37  N.  J.  Law,  437 ;  Jansen  v.  Williams,  36  Neb. 
869,  55  N.  W.  279,  20  L.  R.  A.  207;  Casey  v.  Casey,  14  111.  112;  Stew- 
art V.  Gilruth,  8  S.  D.  181,  65  N.  W.  1065. 

A  duty  of  full  disclosure  of  all  material  facts  within  his  knowledge 
bearing  on  the  value  of  the  land  rested  upon  the  defendant,  and,  unless 
he  made  such  disclosures  before  himself  becoming  a  purchaser,  the 
conveyance  becomes  voidable  upon  plaintiff's  election  to  so  consider 

The  judgment  is  therefore  affirmed.    All  concur. 


BURKE  V.  BOURS. 
(Supreme  Court  of  California,  1893.  98  Cal.  171,  32  Pac.  980.) 
Harrison,  J.^^  When  this  action  was  here  upon  the  last  appeal 
(92  Cal.  108,  28  Pac.  57)  the  facts  before  the  court  were  that  Bours 
had  been  employed  by  Faulkner,  Bell  &  Co.,  who  were  agents  of 
Arguello,  to  make  a  sale  of  the  land,  and  had  reported  to  them  a 
sale  thereof  for  the  sum  of  $4,500,  sending  at  the  same  time  a  form 
of  a  deed  to  be  executed  by  Arguello,  without,  however,  inserting 
the  amount  of  the  consideration  or  the  name  of  the  grantee;  that 
Arguello  filled  in  the  amount  of  the  consideration,  and  executed  the 
deed  without  inserting  the  name  of  any  grantee;  that  when  Hours 
received  the  deed  he  caused  his  own  name  to  be  inserted  therein  as 
grantee,  and  sent  his  check  for  the  amount  of  the  purchase  money 
to  Iviulkner,  Bell  &  Co.,  who  accounted  for  the  same  to  Arguello. 
The  judgment  of  the  court  below  was  reversed  upon  the  grounds  that 
Bours  was  to  be  regarded  as  the  agent  of  Arguello  for  making  a 
sale  of  the  land,  and  could  not,  as  such  agent  make  a  sale  to  himself. 
*  *  *  The  conditions  under  which  the  judgment  of  this  court  was 
then  renflcred  do  not  now  exist.    It  now  appears  not  only  that  Bours 

21  Part  of  the  opliiioii  is  omitted. 


540        EFFECTS  AND  CO.NSKQUENCES  OP  THE  RELATION    (Part  3 

dealt  openly  witli  Arj^iulK)  in  tlio  sale,  and  llial  the  transaction  was 
fair  and  just,  and  the  consideration  full  and  atlc(inatc,  but  it  also  ap- 
pears that  "the  sale  was  made  witli  the  full  knowledge  and  consent 
of  Argiiello."  These  circumstances  take  the  case  out  of  the  prin- 
ciples announced  at  the  former  hearinq-,  and  show  a  complete  de- 
fense to  a  recovery  by  the  plaintiffs.  There  is  no  inhibition  upon  a 
purchase  by  an  agent  from  his  principal,  "where  the  facts  are  fully 
disclosed,  and  the  agent  acts  in  good  faith,  taking  no  advantage  of 
his  situation.  The  principal  may,  if  he  sees  fit,  deal  with  the  agent 
as  with  any  other  person."  Mechem,  Ag.  §  466;  Rochester  v.  Lever- 
ing. 104  Ind.  562,  4  N.  E.  203.  The  agent  has  the  same  right  to 
deal  directly  with  his  principal  as  has  a  stranger.  The  rule  which 
prevents  the  agent  from  purchasing  the  property  which  he  is  au- 
thorized to  sell  for  his  principal  is  based  upon  the  maxim  that  no 
man  can  serve  two  masters,  and  that  an  agent  shall  not  unite  in  his 
own  person  his  individual  with  his  representative  character,  or  place 
himself  in  a  position  where  his  personal  interest  will  be  in  conflict 
with  his  duty  to  his  principal.  When,  however,  the  agent  deals  with 
his  principal  "at  arm's  length,  and  after  a  full  disclosure  of  all  that 
he  knows  with  respect  to  the  property"  (Murphy  v.  O'Shea,  2  Jones 
&  La.  T.  425),  or  when  the  principal  ratifies  the  purchase  from  him- 
self with  full  knowledge  of  the  circumstances  connected  with  the 
transaction,  he  can  thereafter  avoid  the  sale  only  upon  the  same 
grounds  as  if  the  purchase  had  been  made  by  a  stranger.  The  pow- 
ers of  an  agent  in  dealing  with  the  property  of  his  principal  are  lim- 
ited in  the  same  manner  as  those  of  a  trustee.  A  trustee  is  not  for- 
bidden to  deal  with  the  trust  property  when  the  beneficiary,  with  a 
full  knowledge  of  the  motives  of  the  trustee  and  of  all  other  facts 
concerning  the  transaction  which  might  afTect  his  own  decision,  and 
without  the  use  of  any  influence  on  the  part  of  the  trustee,  permits 
him  to  do  so.    Civil  Code,  §  2230. 

The  present  case  does  not  fall  within  the  rule  which  is  applicable 
when  an  agent  with  a  power  of  sale  makes  a  sale  to  himself.  Bours 
did  not  have  any  power  of  sale  from  Arguello,  and  did  not  in  fact 
make  any  sale  to  himself.  His  relation  to  Arguella,  resulting  from 
his  original  employment  by  Faulkner,  Bell  &  Co.,  was  rather  that 
of  a  broker  than  an  agent  for  sale,  and  his  subsequent  proposition  to 
them  that  he  would  himself  purchase  the  land  from  Arguello  at  the 
price  of  $4,500  placed  him  in  the  position  of  a  purchaser  dealing 
directly  with  the  owner.  Faulkner,  Bell  &  Co.  were  the  agents  of 
Arguello  for  the  sale  of  the  property,  and  the  persons  to  whom 
Bours,  if  he  desired  to  purchase  the  same,  would  naturally  make  ap- 
plication. He  had  had  no  direct  correspondence  with  Arguello,  and 
his  offer  and  information  to  Faulkner,  Bell  &  Co.  must  be  regarded 
the  same  as  if  made  to  Arguello.  Although  his  previous  relation 
to  Arguello,  by  virtue  of  having  been  employed  to  make  a  sale  of 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  541 

the  property,  still  left  him  charged  with  the  duty  of  disclosing  any 
facts  or  circumstances  affecting  the  property  which  might  have  come 
to  his  knowledge  while  holding  such  fiduciary  relation,  yet  the  record 
does  not  show  that  there  was  any  concealment  or  silence  on  his  part 
which  would  make  him  guilty  of  constructive  fraud. 

When  Bours  wrote  to  Faulkner,  Bell  &  Co.,  making  the  proposi- 
tion to  purchase  the  property  himself  from  Arguello  for  the  sum  of 
$4,500  he  was  not  acting  as  the  agent  of  Arguello  in  making  a  sale 
of  the  premises  to  himself,  but  was  making  a  direct  proposition  to 
Arguello  through  Faulkner,  Bell  &  Co.,  who  were  his  agents  for 
the  sale  of  the  property.  Arguello  had  been  previously  informed  of 
all  that  Bours  had  done  in  attempting  to  effect  the  sale,  and  it  is 
not  disputed  that  $4,500  was  the  full  value  of  the  property.  The 
court  finds  that,  when  Bours  was  first  employed  in  behalf  of  Ar- 
guello, he  wrote  to  Faulkner,  Bell  &  Co.,  "fully  advising  them  of 
the  condition  of  the  said  property;"  and  that,  after  the  receipt  of 
that  letter,  Arguello  stated  "that  he  agreed  with  Mr.  Bours'  opinion 
of  the  property;"  and  that,  after  Bours  had  endeavored  to  make  a 
sale  of  the  property,  he  again  wrote  to  Faulkner,  Bell  &  Co.,  "advis- 
ing them  therein  of  what  he  had  done;"  and  that,  as  soon  as  he  had 
found  a  .purchaser,  he  informed  Faulkner,  Bell  &  Co.  thereof.  These 
findings  are  not  excepted  to,  and,  as  it  is  not  claimed  that  there  were 
any  facts  or  circumstances  within  the  knowledge  of  Bours  that  he 
failed  to  disclose,  must  be  construed  as  equivalent  to  a  finding  that 
he  made  a  full  disclosure  of  all  the  information  he  had  respecting 
the  value  or  condition  of  the  property. 

As  the  sale  from  Arguello  to  Bours  is  to  be  regarded  as  made 
upon  a  direct  dealing  between  them  for  the  purchase  and  sale  of  the 
property,  the  rules  governing  the  ratification  and  confirmation  by  a 
principal  of  the  act  of  his  agent  have  no  application.  The  judgment 
is  affirmed. 


DENNISON  V.  ALDRICH. 

(Kan.sas  City  Court  of  Appeals,  Missouri,  1905.     114  Mo.  App.  700,  91  S.  W. 

lOL'-l.) 

Johnson,  J.^*  Plaintiffs  sued  defendant  as  their  agent  to  recover 
the  sum  of  $4,000,  received  by  the  latter  as  a  commission  for  the 
sale  of  some  mining  property  in  Jasper  county.  It  is  claimed  de- 
'fendant  obtained  the  money  as  the  fiduciary  of  plaintiffs,  and  then 
repudiated  his  obligation  to  them  to  account  for  it.  The  trial  re- 
sulted in  a  judgment  for  defendant.  A  motion  for  a  new  trial  was 
filcfl  by  plaintiffs,  and  upon  hearing,  sustained  by  the  trial  judge,  who 
assigned  the  following  reasons  for  his  action :  "That  the  court  erred 
in   giving   instructions   for   defendant,    and    in    refusing   instructions 

22  Part  of  tile  ojiiiilon   Is   oiiilttcfl. 


.""•IL'  Ki'FKCTs  .\M>  (H>Nsi:QrEXCi:s  OF  THE  UELATioN       (Part  3 

asked  for  hy  plaiiitifl's,  in  modifying-  instnu-lions  asked  liy  ])hiintirfs, 
and  givino"  instructions  on  the  court's  own  nuUion,  and  l)ecause  the 
court  erred  in  athuittintj  inconijietent  and  irrelevant  evidence  on  the 
part  of  defenilant.  ami  rejected  competent  and  le^al  evitlence  offered 
by  plaintiffs."  Defendant,  after  unsuccessfully  niovins::  for  an  order 
to  set  aside  that  sustaining;-  the  motion  for  a  new  trial,  brouc^ht  the 
case  here  upon  appeal.     '^     *     * 

The  instructions  given  by  the  court  evidently  are  based  upon  a 
misconception  of  the  principles  controlling  the  relation  of  principal 
— ^       and  agent.     In  effect,  the  jury  was  told  that  defendant  during  the 
continuance  of  plaintiff's'  right  to  sell  the  property  under  their  con- 
tract with  the  owners,  could,  by  the  termination  of  his  employment 
under  plaintiffs,  absolve  himself  from  all  duty  to  thein,  and,  by  mak- 
ing an  independent  contract  with  the  owners,  enter  into  competition 
with  them  for  the  sale  of  the  property.     The  relation  of  principal 
and  agent  is  one  of  trust  and  confidence  analogous  to  that  of  trustefiv 
^-.and  cestui  cjue  trust,  client  and  attorney,  and  employer  and  employe.  \ 
A  person  acting  in  a  fiduciary  capacity  is  not  permitted  to  use  the  / 
information  or  advantage  gained  through  his  position  for  his  owiy 
benefit  and  against  the  interest  of  his  correlate./'  He  must  be  faith- 
ful to  his  trust  and  to  guard  against  faithlessness  is  not  allowed  to 
intermeddle  on  his  own  account  with  the  subjgct  of  his  employment 
so  long  as  the  one  for  whom  he  is  employed  to  act  has  any  right 
or  interest  in  the  matter.     If  he  does  interfere,  the  -fact  of  the  prior 
termination  of  his  employment  will  not  release  him^  from  accounta- 
bility.    His  trusteeship  cannot   thus  be   cast   off.    Tf  defendant  ac- 
cepted employment  from  plaintiffs  to  aid  them  in  selling  the  property 
he  should  have  done  nothing  at  any  time  to  disturb  their  relations        I 
with  their  principals,  and  he  could  not  accept  employment  from  the       / 
owners  for  himself  until  after  plaintiffs'  employment  was  finally  ended.      ' 

It  is  not  indispensable  to  plaintiffs'  right  to  recover  that  the  con-  J 
tinuation  of  their  employment  to  the  date  of  the  sale  of  the  prop- 
erty be  found.  If  it  existed  at  the  time  defendant  began  to  negotiate 
the  contract  with  the  owners  for  himself,  which  he  succeeded  in  pro- 
curing on  June  27th,  plaintiffs  should  recover.  In  such  case  defend- 
ant's bad  faith  in  undermining  his  principals  would  bind  him  to  them 
and  give  to  them  the  fruits  of  his  faithless  acts.  Trice  v.  Comstock, 
121  Fed.  620,  57  C.  C.  A.  646,  61  L.  R.  A.  176;  Paul  v.  Machine 
Company,  87  Mo.  App.  647;  Eoff  v.  Irvine,  108  Mo.  378,  18  S.  W. 
907,  32  Am.  St.  Rep.  609;  Life  Ins.  Co.  v.  Smith,  117  Mo.  261,  22 
S.  W.  623,  38  Am.  St.  Rep.  656;  Mechem  on  Agency,  §§  455,  456; 
2  Sugden  on  Vendors,  406  et  seq. ;  Crumley  v.  Webb,  44  Mo.  444, 
100  Am.  Dec.  304. 

On  the  other  hand,  if,  as  defendant  contends,  the  relation  of  plain- 
tiffs to  the  owners  was  finally  ended  on  June  15th,  and  until  after 
that  date  he  made  no  effort  to  seek  employment  direct  from  the  own- 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  HIS  PRIXCIPAL  543 

ers,  nor  gave  ^villing  ear  to  proposals  from  McDonald,  then  in  such 
case  plaintiffs  would  have  no  cause  of  action.  While  as  stated,  good 
faith  requires  a  fiduciary  to  serve  alone  the  interest  of  his  correlate 
in  the  subject  of  the  employment,  the  termination  of  such  interest 
ends  all  duty,  and  leaves  him  free  to  serve  himself  or  others,  provided 
he  has  done  nothing  during  the  continuance  of  such  interest  to  lay 
the  foundation  for  future  advantage  to  himself  at  the  expense  of  his 
principal's  rights.  Halperin  v.  Callender,  17  Misc.  Rep.  362,  39  N. 
Y.  Supp.  1044;  La  Force  v.  Washington  University,  106  Mo.  App. 
517,  81  S.  W.  209;  Beauchamp  v.  Higgins,  20  Mo.  App.  514."  *  *  * 
The  errors  noted  justified  the  sustaining  of  a  motion  for  a  new  trial, 
and  the  order  is  affirmed.     All  concur. 

23  Accord:  New  Era  Co.  v.  Shannon.  44  111.  App.  477  (1892),  in  which  the 
agent  resipned  in  order  to  take  advantage  of  his  principal.  The  purchase 
by  a  fiduciary  of  a  trust  property  will  always  be  scanned  by  a  court  of  equity 
w'ith  the  most  searching  and  questioning  suspicion.  Newcomb  v.  Brooks,  10 
W.  Va.  32  (1S79).  The  burden  of  establishing  the  utmost  good  faith  is  on  the 
agent.  Condit  v.  Blackwell,  22  N.  J.  Eq.  481  (1S5S).  The  necessity  of  the 
rule  is  made  clear  in  Cook  v.  Berlin  Woolen  Mills  Co.,  56  Wis.  G43,  14  N.  W. 
808  (1SS3):  "Such  an  agent,  contemplating  a  purchase  of  the  subject  of  his 
agency,  has  dangerous  power  to  confuse  its  condition  and  make  it  appear 
worth  less  than  it  is.  Such  an  agent  might  well  bo  tempted,  would  generally 
have  some  power,  so  to  shape  his  agency,  as  not  only  to  depreciate  in  appar- 
ent value,  but  temporarily  in  real  value,  what  he  designs  to  purchase.  This 
is  not  said  by  way  of  comment  on  the  facts  here.  There  is  nothing  in  the 
record  to  raise  any  jtresumption  of  such  fraud  against  the  superintendent. 
It  is  said  bv  wav  of  illustrating  the  justice  and  wisdom  of  the  rule  applica- 
ble to  purchases' by  such  agents  generally.  And  the  respondents,  to  support 
Ihe  purchase  of  the  superintendent,  took  upon  them  the  onus  probandi  that 
he  had  not  abused  his  imwer:  that  he  jiracticed  throughout  positive  and  ex- 
plicit frankness  and  impartiality;  had  imparted  to  his  principals  all  his  own 
information  bearing  on  the  value  of  the  property;  had  given  all  the  advice 
against  himself  that  he  should  have  given  against  a  stranger;  had  derived 
no  advantage  from  his  agency,  but  had  acted  openly  throughout,  uberrima 
tide."  If  he  has  kept  back  any  information  that  might  have  affected  the  ac- 
tion of  the  principal,  the  transaction  may  be  set  aside.  I'rince  v.  Dupuy, 
163  111.  417,  45  X.  E.  298  (1896).  But  when  the  agent  can  establish  his  in- 
tegrity, lidelity  and  fair  and  open  dealing  with  tlie  princi]ial,  even  a  gift  , 
from  the  principal  may  be  npiicld.  Tliere  is  no  reason  why  a  principal  may  I 
not  in  this  wav  e.vprcss  his  gratitude  to  his  agent  and  his  ai)pre(iati(>n  of  / 
his  services.  Ralston  v.  Turpln,  129  U.  S.  663,  9  Sup.  Ct.  420,  32  L.  Ed.  747  / 
(1889),  alHrming  (C.  C.)  25  Fed.  7  (1885).  And  a  lease  to  the  agent  is  subject, 
to  the  same  principles.  Lord  Selsey  v.  Rhoades,  2  Sim.  &  St.  41,  1  Bligh,  "• 
(1824). 


544  EFFECTS   AND   CONSEQUENCES   OP   THE    UELATION  (Part  3 

r.AiriMTOTJ'Ml'W  V.  T.l' I'CrT. 
(Supronie  Court   of   l'»'ims\iviini:i.    ls:!s.     7   \V:itts.  472.) 

Kjcctniont.  Dcfoiulant  c-laiiiu'd  uiulor  a  tax  deed  to  his  father, 
Jolin  I.ooch. 

Gibson,  C.  J-"*  It  is  not  denied  that  the  defendant's  father  had 
been  the  plaintiff's  agent  and  curator  of  the  land.  The  father  himself 
testified  that  his  agency  had  expired  before  the  sale ;  but  that  is  not 
enough.  To  capacitate  him  as  a  purchaser  on  his  own  account,  he 
must  have  explicitly  resigned  his  tnist.  The  most  open,  ingenuous 
and  disinterested  dealing  is  required  of  a  confidential  agent  while  he 
consents  to  act  as  such,  and  there  must  be  an  unambiguous  relin- 
quishment of  his  agency  before  he  can  acquire  a  personal  interest  in 
the  subject  of  it.  To  leave  a  doubt  of  his  position  in  this  respect,  is  to 
turn  himself  into  a  trustee.  It  is  unnecessary  to  recur  to  authority 
for  a  principle  so  familiar  or  so  accordant  with  common  honesty.^  "^  The 
agent  was  employed,  in  this  instance,  expressly  to  preserve  the  land 
from  being  sold ;  and  taking  his  agency  to  have  been  left  unclosed  by 
the  absence  of  an  explicit  renunciation  of  it,  neither  Tvcisenring  v.  Black, 
5  Watts,  303,  30  Am.  Dec.  322,  nor  Riddle  v.  Murphy,  7  Serg.  &  R. 
230,  presented  a  stronger  case  to  restrain  the  agent  from  purchasing 
for  himself.  Within  the  three  preceding  years,  he  had  been  reim- 
bursed his  expenses  and  paid  for  his  services ;  but  that  was  not  a 
dissolution  of  the  previous  relation,  and  it  is  not  pretended  that  there 
was  any  other  evidence  of  it.  On  the  contrary,  the  fact  that  he  gave 
intelHgence  of  the  sale  to  a  cotenant  of  the  plaintiff,  as  well  as  to  a 
friend  of  the  family,  evinces  a  consciousness  that  his  duties  as  a  fidu- 
ciary were  not  entirely  closed.  He  is  therefore  to  be  treated  as  hav- 
ing been  a  trustee.  But  did  the  defendant  purchase  of  him  with  no- 
tice? Knowing,  as  he  probably  did,  of  the  former  existence  of  the 
agency,  he  would  be  bound  to  inquire  into  the  duration  of  it,  and  he 
would  stand  affected  by  jt.     *     *     * 

Judgment  reversed  and  venire  de  novo  awarded. 

24  Part  of  the  opinion  is  omitted. 

25  Accord:  Barton  v.  Moss,  .32  111.  50  (1863).  An  agent  who  has  sold  prop- 
erty for  his  principal  is  not  thereby  incapacitated  to  buy  of  the  vendee,  if  it 
appears  that  he  sold  in  good  faith,  and  not  under  mere  color  of  a  sale,  to  a 
third  person,  with  an  understanding  that  it  would  later  be  turned  over  to  the 
agent.  Robert.son  v.  Chapman,  1.52  U.  S.  673,  14  Sup.  Ct.  741,  38  L.  Ed.  .592 
(1894).  A  mere  formal  surrender  of  the  agency  is  not  enough,  particularly 
If  it  was  made  merely  to  enable  the  agent  to  acquire  an  interest  in  the  prin- 
cipal's property.  Fountain  Coal  Co.  v.  I'helps,  9.5  Ind.  271  (1884):  Bowman 
V.  Oflir-f.r,  .53  Iowa,  640,  6  N.  W.  28  (1880),  in  which  the  agent  had  not  been 
put  in  funds  to  pay  the  taxes,  and  later  bou^cht  a  tax  title;  Xi-w  i;ra  Co.  v. 
Shannon,  44  111.  App.  477  (1892).  However,  when  the  agency  has  really  ceas- 
ed, the  di.sability  no  longer  exists,  McKinley  v.  Irvine,  13  Ala.  081  (1848); 
though  even  then  the  agent  cannot  be  permitted  for  bis  own  advantage  to 
undo,  so  far  as  he  can,  the  business  he  has  done  for  his  principal.  Merchants' 
Ins.  Co.  V.  Prince,  50  Minn.  53,  52  N.  W.  131,  36  Am.  St.  Itep.  626  (1892). 


Ch.  1)  DUTIES  AND  LIABILITIES  OP  AGENT  TO  HIS  PRINCIPAL  545 


SPALDING  V.  MATTINGLY.2« 

(Court  of  Appeals. of  Kentucky,  1SS9.     89  Ky.  83,  1  S.  W.  488,  8  Ky.  Law 
Rep.  343,  12  Ky.  Law  Rep.  243.) 

B.  F.  Mattingly  was  surety  on  notes  given  by  Spalding  and  Geo. 
Mattingly  to  purchase  cattle  to  feed.  To  protect  him,  they  gave  B. 
F.  jNIattingly  a  bill  of  sale  of  said  cattle,  and  a  power  to  sell  them 
to  satisfy  the  notes.  They  had  hired  one  B.  S.  Mattingly  to  feed  the 
cattle  for  them,  but  failed  to  perform  their  agreement  to  erect  feed- 
ing pens  and  furnish  straw  and  hay,  whereupon  B.  F.  Mattingly  sold 
the  cattle  to  B.  S.  Mattingly.  Spalding  petitions  in  equity  for  relief 
and  appeals  from  judgment  for  Mattingly. 

Bennett,  J.^^  *  ^^  *  'pj^g  contention  of  appellant  that  appel- 
lee B.  S.  Mattingly  is  liable  to  him  for  the  value  of  said  cattle  at 
selling  time,  and  also  for  the  slops,  less  his  expenses  (although  ap- 
pellee B.  F.  Mattingly  may  not  be  liable),  because  at  the  time  he  pur- 
chased the  cattle  from  B.  F.  Mattingly  he  was  acting  as  appellant's 
agent  in  slopping  and  attending  to  said  cattle,  cannot  be  sustained, 
for  the  reason  that  the  equitable  rule  which  prevents  an  agent  from 
dealing  with  his  principal's  property  for  his  own  benefit,  inconsistent 
with  the  interest  of  that  of  the  principal,  "apphes  only  to  agents  who 
are  relied  upon  for  counsel  and  direction,  and  whose  employment 
is  rather  a  trust  than  a  service,  or  both,  and  not  to  those  who  are 
employed  merely  as  instruments  in  the  performance  of  an  appointed 
service," — such  as  an  employe  to  render  manual  labor  for  the  princi- 
pal, without  any  trust  power  being  delegated  to  him,  to  act  on  be- 
half of  the  principal,  but  only  to  render  some  appointed  labor  for 
him,  for  wages — then  the  employe  may  purchase  the  principal's 
property  as  well  as  any  one  not  so  situated.  It  would  not  be  con- 
tended that  a  person  merely  employed  by  the  owner  of  a  team  of 
horses  to  feed  and  drive  them  could  not  purchase  them  from  any 
other  person  authorized  to  sell  them.  Here,  appellee  B.  S.  Mattingly 
was  only  employed  to  straw,  slop,  and  attend  to  said  cattle  at  an 
agreed  price ;  and  appellee  B.  F.  Mattingly,  having  the  right  under 
the  circumstances  to  sell  them,  B.  S.  Mattingly  was  under  no  equi- 
table obligation  not  to  buy  them  for  himself,  upon  fair  terms. 

After  carefully  considering  the  whole  case,  we  are  of  the  opinion 
that  there  is  no  reversible  error  in  the  proceedings  in  the  court  be- 
low.    The  judgment  is  al¥irmcfl. 

28  Accord:     Turlett  v.  Nowrnaii.  .".0  W.  Va.  1SL»,  3  S.  E.  578  (1887),  In  which 
the  court  found  the  relations  w(m-c  not  coiilideutlai. 
«T  Part  of  the  opinion  is  oiuitted. 
Godd.Pb.&  a.— 35 


54G  EFFECTS   AND    CONSIU^rKNCKS   OF  Till:    KKLATION  (i'art   3 


/ 


'Section  2.— op. i^dience 

/  . 

/  

WILSON  V.  WILSON. 

(Rupronie  Court  of  ri'iiusylvania,  1850.     2G  Ta.  393.) 

Assumpsit  by  Thomas  Wilson  against  Matthew  C.  W'ilson  for 
money  which  defendant  had  received  for  plaintiff.  Tlaintitif  wrote 
him:  "I  tlon't  say  I  must  have  it,  but  I  would  like  to  have  at  least 
$250  as  soon  as  you  can  send  it,  or  $300  would  not  come  amiss.  You 
can  send  inclosed  in  a  letter  in  $50's  or  $100  notes  on  par  banks. 
*  *  *  Only  be  careful  to  send  it  folded  up  and  sealed."  Defend- 
ant sent  IS  bills  of  the  denomination  of  $5,  $10,  and  $20,  and  $100 
in  a  letter  carefully  folded  and  sealed.  The  letter  never  was  re- 
ceived. 

Lewis,  C.  J.  The  primary  obligation  of  an  agent,  whose  authority 
is  limited  by  instructions,  is  to  adhere  faithfully  to  those  instructions, 
in  all  cases  to  which  they  ought  properly  to  apply.  Story  on  Agency, 
§  192.  He  is  in  general  bound  to  obey  the  orders  of  his  principal 
exactly,  if  they  be  imperative  and  not  discretionary ;  and,  in  order  to 
make  it  the  duty  of  a  factor  to  obey  an  order,  it  is  not  necessary 
that  it  should  be  given  in  the  form  of  a  command.  '  The  expression 
of  a  wish  by  the  consignor  may  fairly  be  presumed  to  be  an  order. 
Story  on  Contracts,  §  359 ;  Brown  v.  McGran,  14  Pet.  494,  10  L. 
Ed.  550.  /  It  is  true  that  instructions  may  be  disregarded  in  cases  of 
extreme  necessity  arising  from  unforeseen  emergencies,  or  if  per- 
formanse  becomes  impossible,  or  if  they  require  a  breach  of  law  or 
morals,  i  Story  on  Agency,  §  194.  These  are,  however,  exceptional 
cases.  /There  may,  perhaps,  be  others  which  have  been  sanctioned 
by  adjudications,  founded  on  the  principle  that  the  departure  com- 
plained of  was  not  material.  But  the  general  rule  is  as  indicated 
in  what  has  been  said,  and  the  case  before  the  court  is  not  brought 
within  any  of  the  exceptions. 

To  justify  a  departure  from  instructions,  where  a  loss  has  resulted 
from  such  deviation,  the  case  must  be  brought  within  some  of  the 
recognized  exceptions.^®     It  is  not  sufficient  that  the  deviation  was 

28  Reohtscherd  v.  Aofommodation  Bank.  47  Mo.  181  (1870),  in  which  the 
agent  "intended  to  act  for  the  Ijcncfit  of  the  principal."  So  long  as  an  agent 
i.s  held  to  a  strict  conipliance  with  an  order  plainly  expressed  the  princijial 
can  never  complain,  nor  the  agent  suffer,  be  the  consequences  to  the  former 
what  they  may.  Courcier  v.  Hitter,  Fed.  Cas.  No.  3.282,  4  Wash.  (".  ('.  54U 
(182.^);  Pariente  v.  Lubbock,  20  Beav.  .588,  8  De  G.  M.  &  G.  5  (18-55).  The 
presumption  is  that  the  principal  knows  his  own  interests  and  objects  bet- 
ter than  does  the  agent.  Ilinton  v.  Ring,  111  111.  App.  .•'.(;'.)  (]9().''.i:  Hays  v. 
Stone,  7  Hill.  128  (ls4."»i.  in  wiiich  it  is  said  to  be  the  first  and  liighest  duty 
of  an  agent  to  adhere  faithfully  to  the  orders  of  his  prinripal ;    and  devi;'.- 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  TRIXCIPAL  547 

not  material  if  it  appear  that  the  party  giving  the  instructions  re- 
garded them  as  material,  unless  it  be  shown  affirmatively  that  the 
deviation  in  no  manner  contributed  to  the  loss.  This  may  be  a  diffi- 
cult task,  in  a  case  like  the  present ;  but  the  defendant  voluntarily  as- 
sumed it  when  he  substituted  his  own  plan  for  that  prescribed  by  the 
plaintiff.  To  force  a  man  to  perform  an  executory  contract,  after 
substituting  for  the  consideration  other  terms  than  those  provided 
for  in  the  bargain,  is  to  deprive  him  of  the  right  to  manage  his  own 
business  in  his  own  way.  To  do  this  on  the  ground  that  the  de- 
parture is  not  material,  when  it  is  manifest  that  the  party  considered 
it  otherwise,  is  a  violation  of  private  right,  which  leads  to  uncertainty 
and  litigation  without  necessity  or  excuse.  In  Nesbit  v.  Burry,  25 
Pa.  210,  this  court  refused  to  compel  a  man  to  give  up  his  oxen  al- 
though he  had  sold  them  and  received  part  of  the  purchase-money, 
because  it  was  a  part  of  the  contract  that  they  were  sold  by  weight, 
and  the  weight  was  to  be  ascertained  by  "the  scales  at  Mount  Jack- 
son." The  scales  designated  were  so  out  of  repair  that  the  weight 
could  not  be  ascertained  by  them,  and  it  was  held  that  no  others 
could  be  substituted  against  his  consent  so  as  to  divest  his  right  of 
property. 

Whether  an  action  for  damages  could  have  been  sustained  was 
not  the  question  there ;  nor  is  it  the  question  here.  As  between 
vendor  and  vendee,  the  right  of  property  and  the  consequent  risk 
vests  on  delivery  of  the  goods  purchased  to  the  designated  carrier, 
packed,  and  directed  according  to  usage  or  instructions.  But  if  a 
different  method  of  packing  and  directing,  or  a  different  carrier  than 
the  one  designated,  be  adopted  by  the  vendor,  he  assumes  the  risk 
in  case  of  loss,  unless  it  be  shown  that  his  deviation  in  no  way  con- 
tributed to  the  loss.  Where  the  goods  are  stolen,  how  can  this  be 
shown?  In  sending  bank-notes  by  mail,  it  is  manifest  that  while  a 
large  package  would  attract  the  attention  and  care  of  honest  agents 
on  the  route,  it  might  tempt  the  cupidity  of  dishonest  ones.  The 
party  who  proposes  to  take  the  risk  of  this  method  of  remittance 
has  a  right  to  weigh  the  advantages  and  disadvantages  of  the  various 
methods  of  enclosing  the  notes ;  and  if  he  directs  the  money  to  be 
remitted  in  notes  of  $100  or  $50,  the  debtor  has  no  right  to  increase 
the  size  c;f  the  package  by  remitting  in  notes  of  $10  and  $5.  There 
was  error  in  permitting  the  jury  to  find  that  the  departure  from  in- 
structions was  immaterial. 

Judgment  reversed  and  venire  de  novo  awarded. 

lion  will  make  liirii  rcsfioiisildc  fur  the  (•(iiiscchi<'M(('s.  'J'lip  law  will  not  por- 
nilt  tin"  auiMit  fo  violate  Ills  Inst  luclioiis  with  iiiipniiity.  or  to  use  the  proji- 
crty  of  Ills  iPiiiicipal  in  any  manner  for  his  own  i»r<»lit.  The  case  was  alliruied 
In  ?,  Denio,  .''»7.".   nsjf!). 

As  to  ratilicatiuu  of  the  disobedience,  see  Walker  v.  Wallier,  5  llelsk.  4125 
(I'^Tl). 


548  EFFECTS   AND   CONSIOQUKNCKS   OF  THE    UELATION  (Part  3 

HALL  V.  STORRS. 

(SupriMHO  Court  of  Wisconsin.  IS.^S.     7  \Ms.  253.) 

CoLi\,  J.-"  This  cause  was  tried  before  the  county  court  of  Mil- 
waukee county,  without  a  jury,  and  a  judgment  was  rendered  for  the 
respondents.  The  coun.^ol  for  the  respective  parties  have  admitted  by 
stipulation  that  the  following  facts  were  found  by  the  county  court: 

1.  "That  the  respondents  resided  in  Whitewater,  and  did  business  at 
that  point,  and  that  the  appellants  were  factors  and  commission  mer- 
chants in  the  city  of  IMilwaukee." 

2.  "That  the  respondents  on  the  15th  day  of  May,  1857,  shipped  a 
quantity  of  wheat  consigned  to  the  appellants,  that  the  appellants  re- 
ceived the  wheat  on  the  same  day  and  sold  it  to  Montgomery  &  Cutler, 
and  took  in  payment  therefor,  the  check  of  Montgomery  &  Cutler, 
dated  on  the  16th  day  of  May,  1857,  one  day  after  the  sale.  And  that 
on  the  evening  of  the  same  day,  the  appellants  forwarded  to  the  re- 
spondents a  statement  of  the  amount  of  the  sales,  less  their  charges 
and  commissions,  and  forwarded  in  the  same  letter  the  amount  of  said 
sale  less  their  commissions  and  charges." 

3.  "That  the  check  of  Montgomery  &  Cutler  was  presented  on  the 
day  it  bore  date,  to  wit:  on  the  16th,  and  payment  was  refused,  and 
that  Montgomery  &  Cutler  on  that  day  were  insolvent,  and  that  the 
check  has  not  been  paid." 

4.  "That  by  the  usual  course  of  business  in  Milwaukee,  commission 
merchants  collected  cash  sales  on  the  day  after  delivery." 

5.  "That  on  the  16th  day  of  May,  the  respondents  shipped  another 
quantity  of  wheat  to  the  appellants,  which  they  received  and  sold  for 
cash,  and  returned  to  the  respondents  a  statement  of  the  sales,  and  it 
is  for  the  last  sale  that  the  suit  is  brought." 

6.  "That  up  to  the  16th  of  May,  Montgomery  &  Cutler  were  in 
good  credit." 

The  appellants  admit  in  their  answer  that  the  wheat  was  consigned 
to  thsm  by  the  respondents  to  be  sold  for  cash. 

Upon  this  state  of  facts  the  question  arises,  who  is  to  sustain  the  loss 
of  the  Montgomery  &  Cutler  check,  the  appellants  or  respondents? 
We  are  most  clearly  of  the  opinion  that  it  must  be  the  former. 

We  do  not  understand  the  general  proposition  to  be  controverted, 
that  it  is  the  first  duty  of  an  agent  or  factor  whose  authority  is  limited 
by  instructions,  to  adhere  faithfully  to  those  instructions  in  all  cases 
to  which  they  properly  apply.  The  express  orders  of  the  principal, 
when  they  are  clear,  possible  and  proper,  leave  no  discretion  with  the 
agent,  but  are  absolutely  imperative  upon  him.  If  a  person  employs 
another  to  act  for  him  in  any  lawful  business,  he  has  an  undoubted 
right  to  limit  and  restrict  the  agent's  authority  as  he  thinks  proper. 

28  Part  of  the  opinion  is  omitted. 


f" 


U' 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  549 

And  if  the  agent  violates  his  duties  and  obligations  to  his  principal, 
whether  by  exceeding  his  authority,  or  positive  misconduct,  or  by 
negligence  or  omission  in  the  proper  functions  of  his  agency,  or  in  any 
other  manner,  and  any  loss  or  damage  results  therefrom  to  the  princi- 
pal, he  is  responsible  therefor  and  must  make  full  indemnity. 

There  are  a  few  exceptioins  when  an  agent  is  held  justified  in  cases 
of  extreme  necessity,  arising  from  unforeseen  emergencies  in  departing 
from  positive  instructions.  But  these  exceptions  have  no  application 
to  this  case.  Here  the  appellants  in  effect  concede  that  they  received 
the  wheat,  and  were  instructed  to  sell  it  for  cash.  Is  there  anything 
ambiguous  about  such  an  instruction  ?  In  the  common,  ordinary,  pop- 
ular acceptance  of  the  language,  was  it  not  a  clear,  positive  and  un- 
qualified direction  not  to  sell  or  pass  title  to  the  wheat  without  cash  in 
hand  ?  When  a  country  merchant  forwards  wheat  to  a  factor  in  Mil- 
waukee, to  be  sold  for  cash,  does  he  expect  that  the  grain  will  become 
the  property  of  another  without  the  consideration  being  paid  down? 
A  sale  then  for  cash  we  suppose  means  that  the  money  shall  be  paid 
when  the  title  to  the  property  passes.  This  is  the  common,  popular 
sense  of  the  language,  and  the  appellants  had  no  authority  except  to 
dispose  of  the  wheat  according  to  the  strict  orders  of  their  consign- 
ors. And  if  they  have  assumed  the  power  of  departing  from  the  in- 
structions, and  a  loss  has  occurred  in  consequence  of  it;  they  must 
sustain  it  and  not  their  principals.  It  appears  to  us,  that  to  sanction 
a  latitude  of  action  in  the  factor  beyond  the  rigid  commands  of  the 
principal  would  be  most  mischievous,  and  unsettle  long  established 
principles  of  law. 

But  it  is  said  that  in  the  absence  of  instructions  or  where  the  terms 
of  the  instructions  have  a  peculiar  signification  at  the  market  where 
the  article  is  to  be  sold,  the  usual  and  customary  manner  of  sale  is  to 
be  the  rule  for  the  factor  and  the  consignor  and  factor  are  both  deem- 
ed to  have  contracted  with  a  view  to  such  custom  or  usage.^°  This 
may  all  be  very  true,  and  yet  how  does  the  proposition  help  the  ap- 
pellants' case? 

We  have  already  stated  that  in  our  judgment  there  was  nothing  pe- 
culiar or  doubtful  or  ambiguous  in  the  direction  given  by  the  respond- 
ents to  sell  the  wheat  for  cash.  That  in  the  popular  and  common  sense 
of  the  language,  such  a  sale  is  understood  to  be  one  where  property  is 
sold  for  moni-'y  in  hand.  And  that  it  is  an  ingredient  or  condition  of 
a  cash  sale  that  the  title  to  the  property  does  not  pass  to  the  purchaser 
until  the  purchase  money  is  paid.  Wc  arc  aware  that  cases  can  be 
found  wiiich  go  to  establish  the  doctrine  that  when  a  factor  has  re- 
ceived goods  with  direction  to  sell  for  cash,  but  which  he  does  not  sell 
for  cash,  but  on  short  time,  accc^rding  to  tiie  usage  and  custom  of  the 
market,  it  lias  been  held  that  such  a  sale  was  in  compliance  with  the 

•'"'  Usagf  iii.'iv  yoveiii  wlun  the  Inslru'tiuiis  are  not  clt-ar.  r.udcn  v.  French, 
10  C.  B.  880,  70  E.  C.  L.  880  (1851). 


OoO  EKKIU'TS    AND   CONSl^QrKNrKS   OK   THE    RKIiATION  (Part   3 

orders  of  the  iirinoiiKil.  See  Clark  v.  \'an  Northwiek,  1  Pick.  343. 
Contra:  Catlin  v.  Smith,  24  \'t.  85;  Parksdale  v.  P.rown  et  al.,  1 
Xott  .S:  MoC.  517,  9  Am.  Dec.  720;  ]:)ouohiss  v.  Peland,  1  Wend.  492. 

We  diuiht  excec(hngly  the  sounchiess  and  correctness  of  the  rule 
which  permits  a  usas^e  or  custom  in  any  particular  business  or  trade 
to  qualify  or  vary  the  instructions  to  an  ai^ent,  and  allow  him  to  show 
that  by  the  understanding  of  merchants  a  sale  on  credit  was  no  viola- 
tion of  an  order  to  sell  for  cash.  But  if  it  may  be  shown  that  terms  in 
any  particular  business  or  trade,  by  usage  have  acquired  a  meaning 
different  from  their  ordinary  acceptation,  and  that  by  such  custom  a 
cash  sale  does  not  mean  what  the  language  imports,  then  it  is  obvious 
that  the  evidence  of  such  a  custom  should  be  most  clear  and  satisfac- 
tory. Now,  we  do  not  think  the  proof  in  this  case  would  at  all  warrant 
us  in  saying  that  a  local  usage  existed  in  Milwaukee  so  "ancient,  uni- 
form, notorious  and  reasonable"  that  the  res])ondents  and  appellants 
must  be  presumed  to  have  contracted  with  reference  to  it,  and  that  ac- 
cording to  this  usage  a  cash  sale  is  wdien  property  is  sold  one  day  and 
the  purchase  money  is  collected  the  day  after  delivery,  and  we  should 
not  be  authorized  from  anything  we  can  see  in  this  case  in  supposing 
such  a  custom  to  exist. 

And  manifestly  if  such  a  custom  docs  obtain  in  Milwaukee  and  the 
appellants  relied  upon  it  to  excuse  themselves  from  a  seeming  viola- 
tion of  orders  to  sell  for  cash,  then  they  should  have  established  the 
custom  beyond  all  reasonable  doubt.  Since  they  did  not  show  the  ex- 
istence of  such  a  custom,  we  must  hold  them  to  all  the  responsibility 
of  violating  the  instructions  of  their  principals,  and  they  must  lose  the 
amount  of  the  check  of  Montgomery  &  Cutler,  instead  of  the  respond- 
ents.    *     *     *     Judgment  affirmed. 


GREENLEAF  v.  MOODY. 

(Supreme  Judicial  Court  of  Massachusetts,  1866.     1.3  Allen,  363.) 

Foster,  J.  This  case  must  depend  for  its  decision  upon  the  appli- 
cation of  well  established  legal  principles  to  a  state  of  facts  of  an  un- 
usual and  extraordinary  character. 

The  defendants,  commission  merchants  or  factors  in  New  Orleans, 
received  during  the  rebellion  in  1864  from  the  plaintifif  a  large  quan- 
tity of  hay  consigned  for  sale,  upon  which  they  made  advances  in  pay- 
ment of  freight  and  other  charges  amounting  to  about  half  its  value. 
Three  hundred  and  twenty-one  tons  of  the  hay  were  sold  to  the  mili- 
tary ofificers  of  the  United  States,  for  cash.  The  remainder,  one  hun- 
dred and  thirty-four  tons,  were  seized  by  military  authority.  No  fault 
could  be  imputed  to  the  factors  for  either  of  these  events.  The  sales 
for  cash  were  clearly  within  the  scope  of  their  authority,  and  the  sei- 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  551 

zure  by  the  strong  arm  of  military  power  was  an  occurrence  beyond 
their  control. 

The  only  payment  which  the  United  States  officers  would  make,  ei- 
ther for  the  hay  purchased  or  for  that  seized,  was  in  certiticates  of  in- 
debtedness, the  negotiable  notes  of  the  United  States,  payable  to  the 
bearer  and  upon  interest  at  the  rate  of  six  per  cent,  per  annum.  The 
factors  accepted  these  as  payment,  and  at  once  sold  them  for  their 
market  value,  ninety-three  cents  on  the  dollar.  The  plaintiff  claims 
that  the  defendants  are  liable  for  the  loss  sustained  by  this  sale  at  a 
discount,  first,  because  as  factors  they  had  no  right  to  take  in  payment 
such  securities;  and  secondly,  because,  if  justified  in  accepting  them, 
they  had  no  right  to  sell  them  below  par  without  notice  to  him.  And 
we  are  called  upon  to  decide  whether  in  either  of  these  particulars 
they  violated  their  duty,  so  as  to  render  themselves  personally  answer- 
able to  their  principal,  the  consignor,  for  the  loss  sustained  by  the  sale 
of  the  certificates  at  a  discoimt  below  their  face. 

The  ordinary  rule  is  clear,  that  factors  must  obey  the  instructions  of 
their  principal ;  that  they  may  not  compromise  debts  without  author- 
ity ;  that  they  must,  under  a  change  of  circumstances,  advise  the  con- 
signor, and  await  his  directions;  and  that  they  must  conform  to  the 
usages  of  trade  presumed  to  be  known  to  both  parties,  or  to  the  course 
pursued  by  them  and  approved  by  the  owner  in  former  instances.  But 
what  is  their  duty  in  novel,  critical  and  unforeseen  emergencies?^^  To 
answer  this  question  we  may  refer  to  an  opinion  of  Mr.  Justice  Story 
in  a  suit  relative  to  the  conduct  of  a  supercargo  who  had  totally  de- 
parted from  the  instructions  of  the  shipper,  which  is  so  apposite  that 
we  adopt  its  principles  and  the  substance  of  its  language.  In  circum- 
stances of  necessity  or  great  urgency  it  is  only  necessary  that  the  agent 
should  act  bona  fide  and  with  reasonable  discretion.  "What,  then,  was 
it  the  duty  of  the  supercargo  to  do  in  such  a  case  of  unexpected  occur- 
rence, not  within  the  contemplation  of  the  instructions?"  "Now  I  take 
it  to  be  clear  that  if,  by  some  sudden  emergency,  or  supervening  neces- 
sity, or  other  unexpected  event,  it  becomes  impossible  for  the  super- 
cargo to  comply  with  the  exact  terms  of  his  instructions,  or  a  literal 
compliance  therewith  would  frustrate  the  objects  of  the  owner  and 
sacrifice  his  interests,  it  becomes  the  duty  of  the  supercargo,  under 
such  circumstances,  to  do  the  best  he  can,  in  the  exercise  of  a  sound 
discretion."  "He  becomes,  in  such  a  case,  an  agent  from  necessity  for 
the  owner."  "In  all  voyages  of  this  sort  there  is  an  imi)lied  authority 
to  act  for  the  interest  and  benefit  of  the  owner  in  all  cases  of  unfore- 
seen necessity  and  emergency,  created  by  operation  and  intendment  of 
law."    Forrestier  v.  Bordman,  1  Story,  43,  51,  Fed.  Cas.  Xo.  4.'H5. 

A  justification  founded  upon  necessary  departure  from  the  ordinary 
customs  of  trade  or  from  actual  instructions  must  unduul)k(lly  be  cun- 

si  Soo  Fdsfcr  V.  Sniltli,  2  Cold.  47A,  SH  ,\m.  ])vr.  <>(){  (ISC,.')),  ll(ll(lill^'  lluit 
the  slnklim  ot  n  Ixcit  l;i(lcn  with  Kralii  did  not  justify  the  jmi-iM  in  scliink' 
the  ^liilii.  tlion^'li   it    \v;is  Ills  duty  to  try  In  save  it  from  dcstructiou. 


552  EFFECTS   AND   CONSI'.Ql'KNCES   OF  THE    UELATION  (Part  3 

strucil  with  considerable  strictness.  The  agent  cannot  be  allowed 
lightly  or  unadvisedly  to  assume  a  latitude  of  discretion  not  conferred 
upon  him  by  express  authority,  or  by  those  usages  of  trade,  which  both 
parties  are  presumed  to  have  known  and  contemplated.  But  the  in- 
terests of  commerce  require,  and  the  enlightened  principles  of  com- 
mercial law  bestow,  a  discretion  which  enables  the  factor  to  protect  his 
principal  from  the  irreparable  injury  which  would  be  liable  to  arise  in 
the  absence  of  authority  to  act  under  critical  circumstances,  unexpect- 
edly occurring,  which  do  not  admit  of  delay  for  the  purposes  of  com- 
munication and  consultation.  And  the  factor,  so  placed,  who  acts  pru- 
dently and  in  good  faith,  as  the  owner  himself,  being  a  wise  man, 
would  have  been  likely  to  do  if  personally  present,  finds  his  protection 
in  the  sincerity  and  sound  discretion  of  his  conduct,  and  is  not  answer- 
able for  consequences,  although  subsequent  events  may  demonstrate 
that  his  principal  would  have  been  the  gainer  by  a  dififerent  course 
from  the  one  he  has  conscientiously  and  discreetly  adopted. 

This  is  the  rule  which  must  govern  the  decision  of  the  case  here 
submitted  to  us.  It  is  a  question  of  fact  rather  than  of  law.  The  good 
faith  of  the  defendants  is  expressly  conceded.  We  might,  in  strict- 
ness, give  judgment  for  them  on  the  ground  that  the  case  stated  does 
not  affirmatively  establish  their  liability.  But  we  prefer,  in  conform- 
ity with  what  we  suppose  to  be  the  intention  of  the  parties,  to  consider 
and  pass  upon  the  question,  whether  the  defendants  did  act  with  such 
prudence  and  discretion  as  to  exempt  them  from  liability.  Ought  they 
to  have  refused  the  certificates  profifered  in  payment?  If  they  had 
done  so,  the  only  redress  open  to  the  plaintiff  would  have  been  an  ap- 
plication to  the  war  department  at  Washington  or  to  congress  or  to 
the  court  of  claims.  No  rational  man  could  regard  these  remedies  as 
worth  pursuing  to  avoid  a  discount  of  seven  per  cent.,  the  whole 
amount  of  which  was  only  $1,659.28.  The  expense,  the  delay,  the  un- 
certainty of  ultimate  success,  would  have  induced  any  one,  having  re- 
gard solely  to  his  pecuniary  interest,  and  acting  in  his  own  affairs,  to 
accept  the  profifered  certificates  rather  than  to  attempt  to  stand  upon 
his  strict  legal  rights,  where  no  legal  remedy  was  practically  available 
without  disadvantages  disproportionate  to  the  amount  at  stake. 

The  propriety  of  selling  the  certificates  may  be  considered  more 
questionable.  As  they  were  sold  as  soon  as  received,  justice  requires 
us  to  regard  the  factors'  entire  judgment  and  conduct  together,  and  if 
the  principal  was  benefited  by  the  whole  exercise  of  their  discretion, 
and  placed  in  a  better  condition  than  if  they  had  refused  to  assume  the 
responsibility,  it  would  be  unfair  to  subject  them  to  loss  because  they 
,  might  in  one  respect  have  done  still  better.  No  one  can  say  that  they 
would  have  decided  to  accept  the  certificates  without  also,  as  a  part 
of  the  same  mental  act,  deciding  to  convert  them  forthwith  into  cash. 
But  we  do  not  proceed  upon  this  narrow  ground  alone.  In  guarding 
the  interests  of  a  distant  principal  it  was  their  duty  to  err  on  the  side 
of  prudence  rather  than  of  overconfidence.    We  must  remember  the 


Ch.  1)  DUTIES  AND  LIABILITIES  OP  AGENT  TO  HIS  PRINCIPAL  553 

situation  of  the  parties  and  the  country  at  the  time  of  the  transac- 
tion, and  judge  by  the  Hght  they  then  had,  and  not  according  to  the 
wisdom  that  comes  after  the  event.  The  ordinary  faciHties  of  corre- 
spondence between  ]Maine  and  New  Orleans  were  greatly  interrupted. 
No  telegraphic  communication  was  possible.  The  mails  were  slow 
and  uncertain,  and  somewhat  exposed  to  capture  in  transit.  The  inter- 
val within  which  the  most  speedy  interchange  of  letters  could  take 
place  was  long  enough  for  momentous  events.  The  pecuniary  credit 
of  the  government  depended  on  the  varying  fortunes  of  war.  A  single 
disaster  might  have  depressed  the  market  value  of  the  securities  far 
below  the  point  at  which  they  then  stood.  Other  factors  and  agents 
similarly  situated  with  themselves  deemed  it  their  duty  to  realize  at 
the  current  rates  of  the  market.  More  than  half  of  the  proceeds  of 
the  property  would  be  required  in  New  Orleans  to  pay  advances  and 
charges. 

The  justification  of  the  sale  is  not  to  be  placed  on  the  ground  that 
they  had  a  right  to  make  a  sacrifice  in  order  to  reimburse  themselves, 
for  factors  cannot  sell  below  limits  without  notice  to  the  owner  of  the 
amount  due  and  a  request  for  payment.  But  the  fact  that  the  con- 
signor owed  $14,303.45,  payable  in  New  Orleans,  on  account  of  this 
shipment,  was  a  circumstance  of  some  weight  in  determining  the  ques- 
tion of  expediency.  If  the  securities  were  to  be  sent  to  the  North,  and 
the  money  due  to  be  remitted  thence,  double  risks  of  transportation 
must  be  incurred. 

It  is  impossible  for  us  to  conclude  that  the  course  adopted  exhibited 
any  such  error  of  judgment  or  neglect  of  duty  as  ought  to  render  mer- 
cantile agents  personally  responsible  to  their  principals. 

Judgment  for  the  defendants. 


BRAY  V.  GUNN. 
(Supreme  Court  of  Georgia,  1S74.     53  Ga.  144). 

Bray  sent  to  defendant  for  collection,  in  New  York  exchange,  a 
draft  on  Brown  &  Co.  After  some  difficulty  defendant  on  September 
9  collected  in  Kimball  currency,  then  at  par,  and  informed  plaintiff, 
who,  on  September  12  acknowledged  the  letter.  Kimball  &  Co.  failed, 
and  on  October  27  plaintiff  demanded  of  defendant  that  he  remit  the 
amount  collected  in  New  York  exchange.  Upon  an  action  of  assump- 
sit defendant  had  verdict,  and  plaintiff  appeals. 

McCay,  J.  If  an  agent,  acting  in  good  faith,  disobey  the  instruc- 
tions of  his  principal,  and  promptly  informs  the  principal  of  what  he 
has  done,  it  is  the  duty  of  the  princijial,  at  the  earliest  opportunity,  to 
repudiate  the  act  if  he  cjisapprovc.  Silence  in  such  a  case  is  a  ratifi- 
cation. See  the  case  of  McLcndon  v.  Wilson  &  Callaway,  52  Ga.  41, 
from  Troup  county.    Taking  this  correspondence  altogether,  we  think 


r>r»4  KFIMU'TS   AND   CONSKQl'KNHMOS   OF   TUK    KKLATION  (Tart   3 

the  jury  li;ul  a  rit;ht  to  Inul  that  llic  plaint  ill's  were  salistlcd  with  the 
act  of  CiUiin  in  takintj  the  money  in  the  Kimball  funds,  and  that  his 
dissatisfaction  is  an  after-thouj^ht  in  conseciuence  of  the  failure  of 
Kimball.  The  evidence  is  convincing  that  if  they  had  promptly  noti- 
tied  Gunn  of  their  dissatisfaction,  he  could  have  savetl  himself.  Both 
the  parties  here  were  commercial  men.  and  the  rule  is  a  fair  and  rea- 
sonable one  that  it  is  the  duty  of  the  principal  promptly  to  answer  the 
letters  of  his  agent,  and  if  he  do  not  do  so  he  is  presumed  to  acqui/sce 
in  what  the  agent  informs  him  he  has  done  or  proposes  to  do. 
Judgment  affirmed. 


FALSKEN  V.  FALLS  CITY  STATE  BANK.^^ 

(Supreme  Court  of  Nebraska,  1904.     71  Neb.  29,  98  N,  W.  425.) 

Ames,  C,  Farrington  &  Towle  were  loan  brokers  doing  business 
at  Falls  City,  in  this  state.  The  plaintiff,  Falsken,  obtained  through 
them  a  loan  of  $3,500  upon  his  note  and  mortgage  upon  a  tract  of  land 
lying  in  that  vicinity.  Afterwards  he  loaned  to  Farrington  $2,500  upon 
the  note  of  the  latter,  secured  by  collaterals.  Falsken  lived  at  Kansas 
City.  On  the  29th  day  of  July,  1899,  he  transmitted  through  the  mails 
to  the  defendant,  the  Falls  City  State  Bank,  the  Farrington  note  and 
collaterals,  accompanied  by  the  following  letter,  as  a  copy  of  it  appears 
incorporated  into  the  bill  of  exceptions : 

"Kansas  City,  AIo.,  July  29,  1899.  914  E.  17  St.  Falls  City  State 
Bank — Dear  Sirs :  Inclosed  please  find  note  for  $2540.00  against  F.  E. 
Farrington  for  collection  and  collateral  bonds ;  Note  of  $2500.00  and 
two  Int.  notes  or  coupons  of  $15.00  each  attached  to  bond  in  favor  of 
F.  E.  Farrington.  You  will  give  to  F.  E.  Farrington  as  soon  as  my 
note  is  settled  $2000  Two  thousand  to  be  paid  Aug.  1-99  on  my 
$3500.00  loan  and  $75.00  to  be  paid  on  same  Int.  note  also  due  Aug. 
1-99  dated  2-7-95  due  in  five  years.  Send  me  receipt  for  $2000.00 
&  Int.  note  from  the  said  $3500.00  note  &  mortgage  holder  against  me. 
Said  loan  was  made  through  Farrington  &  Towle  &  the  balance 
$465.00  less  your  collection  fee  send  me  check.  Yours  truly,  C.  H. 
Falsken." 

On  August  1,  1899,  Farrington  satisfied  his  obligation  with  the  bank, 
and  obtained  a  surrender  of  it  and  of  his  collaterals.  On  the  same 
day,  and  as  a  part  of  the  same  transaction,  the  bank  gave  him  two 
drafts  on  a  New  York  bank  for  $2,000  and  $105,  respectively,  and  re- 
mitted to  Falsken  at  Kansas  City,  by  draft,  $462.60;  the  aggregate  of 
the  three  sums  being  the  amount  of  the  Farrington  note.  At  or  about 
the  same  time  Farrington's  receipt  for  the  $2,000  rej^resenterl  by  the 
draft  for  that  amount  was  also  sent  to  Falsken,  but  by  whom  is  not 

3  2  Accord:  Boden  v.  French,  10  C.  B.  8SG,  70  E.  C.  L.  880  (1851).  Not  the 
power  of  attorney  merely,  but  all  the  directions,  by  correspondence  or  other- 
wise, may  be  considered.     Moyses  v.  Bell,  G2  Wash.  5.34,  114  I'ac.  193  (1911). 


Ch;  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  HIS  PRINCIPAL  555 

certain,  and,  we  think,  is  immaterial.  Farrington,  who  was  or  soon 
became  insolvent,  appropriated  the  New  York  drafts  to  his  own  use, 
and  failed  to  discharge  to  any  extent  the  obligation  of  Falsken.  Fal- 
sken  is  shown  to  have  admitted  in  the  following  October  that  the  receipt 
had  come  to  his  hands,  and  he  testified  that  he  learned  in  the  following 
February  that  Farrington  had  not  applied  the  money  to  the  payment  of 
the  plaintiff's  debt.  He  thereupon  begun  a  series  of  attempts  by  solic- 
itations and  threats,  direct  and  indirect,  to  obtain  restitution  from  Far- 
rington, which  were  continued  through  the  summer  of  1900,  but  were 
unavailing.  He  seems  not  to  have  expressed  any  dissatisfaction  with 
the  conduct  of  the  bank  until  these  efforts  had  proved  futile,  although 
in  the  meantime  he  conversed  more  than  once  concerning  the  transac- 
tion with  the  officers  of  that  institution. 

Some  time  in  the  fall  of  1900 — the  transcript  does  not  disclose  the 
date,  but  apparently  in  October  or  November — Falsken  begun  this  ac- 
tion, alleging  a  breach  of  the  contract  of  collection  as  expressed  by  the 
letter  of  transmission  of  July  29,  1899,  above  copied,  and  praying  judg- 
ment for  $2,000  as  moneys  collected  thereunder,  and  not  paid  over  or 
accounted  for.  The  petition  contains  no  allegation  of  fraud  or  of  neg- 
ligence. The  answer,  after  admitting  the  contract  and  the  collection  of 
the  money,  contains  what  amounts  to  a  plea  of  payment  to  the  satis- 
faction, and  with  the  acquiescence,  ratification,  and  approval  of  the 
plaintiff.  The  reply  is,  in  substance,  a  general  denial  of  new  matter. 
There  were  a  verdict  and  judgment  for  the  defendant,  which  this  pro- 
ceeding is  prosecuted  to  reverse. 

It  will  thus  be  seen  that  the  sole  question  in  the  case  is  whether  the 
defendant,  acting  in  good  faith,  is  justified  by  having  paid  out  the 
money  in  the  manner  in  which  it  did.  The  plaintiff  contends  that  it 
is  not,  because,  although  the  letter  instructed  the  bank  to  pay  the  sum 
in  controversy  to  Farrington  as  soon  as  it  should  be  collected  from 
him,  it  also  directed  it  to  send  to  Falsken  a  receipt  for  the  money  from 
the  holder  of  the  note  and  mortgage  of  the  latter.  But  the  two  direc- 
tions are  not  necessarily  inconsistent.  The  holder  was  a  nonresident, 
and  it  is  not  shown  tiiat  the  defendant  or  its  officials  knew  cither  his 
name  or  whereabouts.  The  letter  calls  attention  to  the  fact  that  the 
debt  was  contracted  through  Farrington  &  Towle,  and  expressly  di- 
rects the  payment  of  the  money  not  to  the  holder,  but  to  Farrington, 
who  thus  api)earcd  to  be  intrusted  with  the  duty  of  seeing  it  applied  to 
the  desired  use.  It  was  "to  be  given  to  Farrington  *  *  *  to  be 
paid  on  my  loan."  The  bank  was  certainly  not  charged  with  the  duty 
of  payment,  either  singly  or  jointly  with  Farrington;  and  if  it  was  in- 
tended to  be  obligated  to  see  to  it  that  Farrington  properly  discharged 
his  trust,  that  intent  was  not  expressed,  but  nuist  be  inferred  solely 
from  the  direction  to  the  defendant  to  transmit  a  receipt  from  tlu 
holder  to  the  plaintiff.  The  letter  would  have  been  literally  complied 
with  if  Farrington  had  paid  the  money  to  the  holder,  and  obtained  his 
receipt  for  it,  and  delivere<l  it  to  the  bank  for  transmission. 


556        EFFECTS  AND  CONSKQUENCES  OF  TUE  RELATION    (Part  3 

Under  all  the  circuiuslaiiccs  we  do  not  tliink  that  it  was  unreason- 
able to  suppose  that  such  was  its  intent,  and,  if  so,  the  bank  cannot,  of 
course,  be  held  for  the  consequences  of  Farrington's  default.  The 
most  that  can  be  said  on  behalf  of  the  plaintiff  is  that  the  letter  was 
obscure  and  ambiguous  with  respect  to  a  matter  that  afterwards  turned 
out  to  be  of  vital  inipt^-tance.  That  it  was  so  was  due  to  the  plain- 
tiff's own  fault  or  negligence,  and  he  cannot,  with  justice,  be  permitted 
to  visit  its  consequences  upon  one  who  cannot  be  accused  of  fraud  or 
neglect,  but  at  the  most  of  an  honest  mistake.  We  do  not  think  it  is 
requisite  to  invoke  the  doctrine  of  ratification,  but  the  conduct  of  the 
plaintiff  for  a  year  or  more  after  he  became  fully  acquainted  with  all 
the  facts  tends  very  strongly  to  prove  that  he  had  the  same  understand- 
ing of  his  letter  as  did  the  defendant.  It  is  surprising,  if  he  supposed 
that  his  instructions  had  been  violated  to  his  damage  in  so  large  a  sum, 
that  he  did  not  sooner  demand  reparation  from  the  bank,  especially 
w^hen  he  encountered  difficulty  in  obtaining  restitution  from  Farring- 
ton.  At  all  events,  we  think  that  the  defendant  is  entitled  to  the  pro- 
tection of  the  rule  that  an  agent  who,  in  good  faith  and  without  negli- 
gence, acts  upon  his  own  understanding  of  faulty  or  ambiguous  in- 
structions, is  not  liable  to  his  principal  in  damages,  although  his  inter- 
pretation of  them  may  be  erroneous.  Minnesota  Linseed  Oil  Co.  v. 
Montague,  65  Iowa,  67,  21  N.  W.  184;  Pickett  v.  Pearsons,  17  Vt. 
470;  Vianna  v.  Barclay,  3  Cow.  281. 

Such  being  the  case,  the  verdict  is  the  only  one  that  would  have  had 
support  by  the  evidence,  and  the  consideration  of  alleged  errors  in  the 
progress  of  the  trial  is  not  required.  It  is  recommended  that  the  judg- 
ment of  the  district  court  be  affirmed. 


FEILD  V.  FARRINGTON. 

(Supreme  Court  of  the  United  States,  1869.    10  Wall.  141,  19  L.  Ed.  923.) 

Feild  shipped  cotton  to  Farrington  &  Co.  with  directions  to  sell 
it.  Cotton  was  then  worth  50  cents  per  pound.  Next  day  he  tele- 
graphed, "Do  not  sell  till  I  see  you."  Shortly  after  he  saw  Farring- 
ton and  secured  an  advance  of  $11,000,  nearly  the  full  value  of  the 
cotton.  The  latter  testified  he  expressed  a  wish  to  wait  to  sell  the 
cotton  for  a  better  market.  Feild  testified  he  ordered  them  to  sell 
in  10  days.  Later  they  wrote  him  asking  instructions,  and  he  made 
no  reply.  After  repeated  letters  they  sold  at  30  cents,  and  now  sue 
to  recover  $6,695,  the  difference  between  their  advance  and  the  net 
proceeds  of  the  cotton.  On  the  trial  Feild  asked,  among  others,  an 
instruction  that  if  the  jury  find  that  Feild  ordered  a  sale  before  the 
price  should  fall  any  lower,  and  they  failed  to  sell,  then  plaintiffs 
must  account  to  Feild  for  what  the  cotton  would  have  brought  if 
so  sold.     Defendant  brings  error. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  557 

Strong,  J.^^  [After  holding  that  Feild's  failure  to  reply  to  the 
letters  amounted  to  a  ratification  of  the  conduct  of  plaintiffs:]    *   *  * 

There  is  still  another  reason  why  the  court  should  not  have  af- 
firmed the  defendant's  first  proposition.  The  plaintiffs  had  made 
large  advances  on  the  cotton  consigned  to  them,  advances  very  near- 
ly, if  not  quite,  equal  to  its  value,  and  much  more  than  its  market 
value  at  any  time  after  their  letter  to  the  defendant  was  written. 
They  had,  therefore,  acquired  a  special  property  in  the  cotton,  and 
they  held  it  for  their  own  indemnity  as  well  as  for  the  benefit  of 
the  defendant.  Now,  though  it  is  true  that  factors  are  generally 
bound  to  obey  all  orders  of  their  principals  respecting  the  time  and 
mode  of  sale,  yet  when  they  have  made  large  advances  or  incurred 
expenses  on  account  of  the  consignment,  the  principal  cannot  by  any 
subsequent  orders  control  their  right  to  sell  at  such  a  time  as  in 
the  exercise  of  a  sound  discretion,  and  in  accordance  with  the  usage 
of  trade,  they  may  deem  best  to  secure  indemnity  to  themselves,  and 
to  promote  the  interests  of  the  consignor.  Of  course  they  must  act 
in  good  faith  and  with  reasonable  skill.  This  is  the  rule  as  laid  down 
in  Brown  v.  McGran,  14  Pet.  479,  10  L.  Ed.  550,  in  which  it  was 
said  that  "where  a  consignment  has  been  made  generally  without 
any  specific  orders  as  to  the  time  or  mode  of  sale,  and  the  factor 
makes  advances  or  incurs  liabilities  on  the  footing  of  such  consign- 
ment, then  the  legal  presumption  is,  that  the  factor  is  intended  to 
be  clothed  with  the  ordinary  rights  of  factors  to  sell,  in  the  exercise 
of  a  sound  discretion,  at  such  time  and  in  such  mode  as  the  usage 
of  trade  and  his  general  duty  require,  and  to  reimburse  himself  for 
his  advances  and  liabilities  out  of  the  proceeds  of  sale,  and  the  con- 
signor has  no  right,  by  any  subsequent  orders  given  after  advances 
have  been  made  or  liabilities  incurred  by  the  factor,  to  suspend  or 
control  this  right  of  sale,  except  so  far  as  respects  the  surplus  of  the 
consignment  not  necessary  to  the  reimbursement  of  such  advances  or 
liabilities." 

In  view  of  this  it  is  apparent  that  the  jury  had  more  to  find  than 
the  fact  that  Feild  gave  instructions  to  sell  the  cotton  before  any 
fall  in  the  price,  in  order  to  justify  a  credit  to  him  for  the  amount 
the  cotton  would  have  brought  if  sold  at  the  time  the  instructions 
were  given.  There  was,  therefore,  no  error  in  denying  the  defend- 
ant's first  prayer  for  instructions  to  the  jury.  ♦  ♦  *  Reversed 
for  another  error. 

•»  Part  of  the  opiuiou  Is  omitted. 


55S        KFFKCTS  AND  CONSKyi'KNCES  OF  THE  UBLATION    (fart  3 


IMINNEAPOLIS  TRUST  CO.  v.  MATHER. 

(Court  of  ApiHMls  of  New  York,  1905.    ISl  N.  Y.  205,  73  N.  E.  9S7,  reversing 
00  App.  Div.  3(51,  85  N.  Y.  Supp.  510.) 

Action  on  a  note  and  for  commissions.  Counterclaim  for  con- 
version of  securities.  Tlaintifif  loaned  defendant  $5,000,  taking  as 
security  notes  and  morti^-aoes  aggrejjatincj  $20,100.  These  notes 
plaintiff  was  to  collect,  but  found  such  difficulty  in  doing  so  that 
defendant  instructed  plaintiff  to  foreclose  the  mortgages  as  soon  as 
possible,  bid  in  the  property  at  about  its  present  value  and  take  judg- 
ment against  the  makers  of  the  notes  for  any  deficiency.  Plaintiff 
foreclosed,  but  bid  in  the  property  for  $24,434.90,  the  full  sum  due 
on  the  notes  plus  costs  of  foreclosure,  and  thus  released  the  makers 
of  the  notes  from  further  liability.  The  property  was  then  worth 
only  $20,000.  Defendant  alleged  that  this  was  a  conversion  of  the 
securities  and  upon  trial  before  a  referee  she  was  awarded  $17,- 
250.05,  the  difference  between  the  amount  due  plaintiff  and  the  value 
of  these  securities.  Plaintiffs  appeal  from  the  affirmance  by  the  Ap- 
pellate Division  of  the  report  of  the  referee. 

Werner,  J.^*  *  *  *  g^^.  ^g  f^j^  ^q  perceive  how  this  finding 
of  negligence  justifies  the  conclusion  that  the  plaintiff  was  guilty  of 
converting  the  defendant's  securities.  It  is  true  that  the  plaintiff  was 
the  pledgee  of  these  securities  as  well  as  the  agent  of  the  defendant. 
It  is  equally  true  that  the  defendant  was  not  notified  of  the  fore- 
closure, and  that  the  plaintiff  bid  in  the  mortgaged  lands  in  its  own 
name.  There  is,  however,  no  finding  that  the  plaintiff,  in  bidding  in 
the  property  in  its  own  name,  was  not  acting  for  and  on  behalf  of 
the  defendant,  and  there  is  no  significance  in  the  failure  to  notify  her 
of  the  foreclosure,  when  the  circumstances  are  considered.  The 
mortgaged  property  was  in  the  state  of  Minnesota.  The  plaintiff's 
place  of  business  was  there,  and  it  held  an  assignment  of  the  mort- 
gages. The  defendant's  attorney  had  instructed  the  plaintiff  to  pro- 
ceed to  a  foreclosure  and  sale.  The  defendant  lived  in  the  state  of 
New  York,  and  could  act  much  more  conveniently  and  economically 
through  her  pledgee  and  agent  than  she  could  in  person.  It  was 
therefore  quite  natural  and  proper  that  the  plaintiff  should  use  its 
own  name  in  acting  for  the  defendant.  All  this  was  entirely  consis- 
tent with  the  plaintiff's  duty  as  the  agent  and  pledgee  of  the  defend- 
ant. 

It  is  obvious,  however,  that  in  departing  from  the  defendant's  in- 
structions as  to  price  the  plaintiff  was  guilty  of  a  breach  of  duty, 
and  rendered  itself  liable  for  any  damages  resulting  from  such  breach. 
Since  there  is  neither  evidence  nor  finding  as  to  the  financial  responsi- 
bility of  either  Whitney,  the  mortgagor,  or  Van  Dyke,  his  grantee, 
who  assumed  payment  of  the  mortgages,  the  most  favorable  view  of 

34  Part  of  the  opinion  is  omitted. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  559 

the  case  to  which  the  defendant  can  be  entitled  is  that,  if  the  plaintiff 
had  obeyed  instructions  by  bidding  in  the  property  at  its  actual 
value,  a  deficiency  judgment  might  have  been  collected  from  Whitney 
or  Van  Dyke.  It  would  seem  to  follow  as  a  logical  corollary  that 
the  defendant's  right  of  recovery  should  be  measured  by  what  she 
may  have  lost  through  the  plaintiff's  misconduct,  for  the  law  of  dam- 
ages is  the  law  of  compensation.  In  the  absence  of  some  arbitrary 
legal  rule,  this  would  naturally  be  the  difference  between  the  value 
of  the  land  and  the  amount  bid  for  the  same  at  the  sale.  That  would 
seem  to  be  the  rule  applicable  to  this  case  unless  the  plaintiff's  breach 
of  duty  amounted  to  a  conversion.    We  think  it  did  not. 

The  true  rule  is  very  succinctly  stated  ir^Iechem  on  Agency  (sec- 
tion 476),  where  the  learned  author  says :  /in  many  cases  it  becomes 
difficult  to  determine  whether  the  misconquct  of  the  agent  consists  in 
a  mere  breach  of  instructions,  or  amounts,  in  law,  to  a  conversion, 
and  the  distinction  is  sometimes  exceedingly  technical.  •  A  distinction 
is  nevertheless  to  be  made.  Thus  it  has  been  held  that  if  property  be 
delivered  to  an  agent,  with  instructions  to  sell  it  at  a  certain  price, 
and  he  sells  it  for  less  than  that  price,  he  is  not  liable  in  trover  as  for 
conversion.  Sarjeant  v.  Blunt,  16  Johns.  74;  Dufresne  v.  Hutchin- 
son, 3  Taunt.  117;  Palmer  v.  Germain,  2  U.  &  W.  282.  In  such  a 
case  the  agent  had  a  right  to  sell  and  deliver,  and  in  that  respect 
he  did  no  more  than  he  was  authorized  to  do.  He  disobeyed  instruc- 
tions as  to  price  only,  and  was  liable  for  misconduct,  but  not  for 
conversion  of  the  property.  So,  where  an  agent  was  authorized  to 
deliver  goods  on  receiving  suflficient  security,  but  delivered  them  on 
inadequate  security,  it  was  held  that  trover  would  not  lie."  Cairnes 
V.  Bleecker,  12  Johns.  300.  The  principle  thus  enunciated  seems  to 
be  precisely  applicable  to  the  case  at  bar.  There  can  be  no  sound 
distinction  between  a  case  of  agency  to  sell  at  a  specified  price  and 
one  to  buy  within  a  price  or  limit  named. 

We  think  the  cases  cited  by  the  learned  Appellate  Division  and  the 
defendant  are  not  in  point.  In  Scott  v.  Rogers,  31  N.  Y.  676,  the 
instructions  were  to  sell  wheat  at  a  specified  price  on  a  particular 
day,  and,  if  not  so  sold,  to  ship  it  to  a  designated  consignee  in  the 
city  of  New  York.  In  Laverty  v.  Snethen,  68  N.  Y.  522,  23  Am. 
Rep.  184,  the  agent  was  instructed  not  to  part  with  a  note  unless  he 
got  the  money.  In  Comley  v.  Dazian,  114  N.  Y.  161,  21  N.  E,  135. 
certain  goods  were  not  to  be  sold  without  the  approval  and  consent 
of  the  owners.  In  Gilchrist  v.  Cunnin},diam,  8  Wend.  641,  the  as- 
signee of  a  mortgage  as  collateral  foreclosed  the  same  witlunit  in- 
structions, and  one  of  the  defendants  treated  the  pro])erty  as  his  own. 
In  all  of  these  cases  the  breach  of  duty  was  held  to  be  a  conversion, 
because  the  act  done  was  wholly  unauthorized  and  in  defiance  of  the 
owner's  rights.  That  is  the  ])oint  of  distinction  between  the  two 
classes  of  cases  above  referred  to. 


5(50        EFFECTS  AND  CONSKQUENOES  OF  THE  RELATION    (Part  3 

It  is  iiiuloulULHlly  the  duty  of  an  agent  to  obey  all  the  lawful  in- 
structions of  his  principal,  and  tlie  agent  is  clearly  responsible  for 
all  losses  occasioned  by  his  dist)l)edience  thereof.^"  Whitney  v.  Mer- 
chants' Union  Express  Co.,  104  ]\Iass.  152,  6  Am.  Rep.  207;  Blot 
V.  Roiceau.  3  N.  Y.  78,  51  Am.  Dec.  345.  But  it  is  equally  clear 
that  the  rule  of  damages  as  for  conversion  is  not  applicable  to  all 
cases  where  a  principal  may  sustain  loss  through  the  negligence  or 
disobedience  of  his  agent.  Wamsley  v.  Atlas  Steamship  Co.,  168  N. 
Y.  533,  61  N.  E.  896,  85  Am.  St.  Rep.  699;  Industrial  &  General 
Trust  V.  Tod.  170  N.  Y.  233,  63  N.  E.  285.  The  law  upon  this  sub- 
ject is  well  summed  up  by  Bronson,  J.,  in  MclMorris  v.  Simpson,  21 
Wend.  610,  613,  as  follows:  "The  most  usual  remedies  of  a  principal 
against  his  agent  are  the  action  of  assumpsit  and  a  special  action  on 
the  case,  but  there  can  be  no  doubt  that  trover  will  sometimes  be 
an  appropriate  remedy.  The  action  may  be  maintained  whenever  the 
agent  has  wTongfuUy  converted  the  property  of  his  principal  to  his 
own  use,  and  the  fact  of  conversion  may  be  made  out  by  showing 
either  a  demand  and  refusal,  or  that  the  agent  has,  without  neces- 
sity, sold  or  otherwise  disposed  of  the  property  contrary  to  his  in- 
structions. When  an  agent  wrongfully  refuses  to  surrender  the 
goods  of  his  principal,  or  wholly  departs  from  his  authority  in  dis- 
posing of  them,  he  makes  the  property  his  own,  and  may  be  treated 
as  a  tort  feasor.  But  there  must  be  some  act  on  the  part  of  the 
agent.  A  mere  omission  of  duty  is  not  enough,  although  the  prop- 
erty may  be  lost  in  consequence  of  his  neglect.  Nor  will  trover  lie 
where  the  agent,  though  wanting  in  good  faith,  has  acted  within  the 
general  scope  of  his  powers.  There  must,  I  think,  be  an  entire  de- 
parture from  his  authority  before  this  action  for  a  conversion  of  the 
goods  can  be  maintained." 

We  think  that  it  was  error  to  hold  the  plaintiff  as  for  a  conversion, 
and,  as  this  view  of  the  case  will  necessitate  a  new  trial,  it  is  unneces- 
sary to  discuss  other  exceptions  treated  at  length  in  the  brief  of  the 
appellant. 

The  judgment  should  be  reversed  and  a  new  trial  granted,  with 
costs  in  all  courts  to  abide  the  event. 

8B  The  fact  that  the  agency  Is  gratuitous  makes  no  difference  in  the  liabil- 
ity of  the  agent  if  he  undertalces  the  service,  though  the  gratuitous  agent 
would  not  be  liable  for  non-feasance,  a  total  failure  to  perform.  Marshall  v. 
Ferguson,  94  Mo.  App.  175,  67  S.  W.  935  (1902);  Thorne  v.  Deas,  4  Johns.  84 
(1809) ;    and  post,  p.  565. 


Ch.  1)  DUTIES  AXD  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  561 

SECTION  3.— EXERCISE  OF  CARE  AND  SKILL 


RICHARDSON  v.  TAYLOR.^^ 
(Supreme  Judicial  Court  of  Massachusetts,  1883.     136  Mass.  143.) 

Bill  in  equity  against  John  W.,  Charles  H.  and  Wm.  E.  Taylor. 
Plaintiff  had  been  in  partnership  with  the  last  two.  He  bought  out 
their  interest,  and  retained  John  W.  Taylor,  their  father  and  the  for- 
mer book-keeper  of  the  firm,  as  his  book-keeper  and  his  agent  to  look 
over  the  partnership  accounts  and  effect  a  settlement.  The  father  er- 
roneously overlooked  items  due  plaintiff  amounting  to  $719.64. 

Per  Curiam.  Without  considering  whether  the  defendant  John 
W.  Taylor  is  properly  joined  in  this  suit,  we  are  of  opinion  that  the 
master's  report  shows  no  ground  upon  which  he  can  be  held  liable  in 
any  form  of  action.  He  examined  the  books  of  the  old  firm,  acting  as 
agent  of  all  parties.  The  master  finds  that,  in  doing  this,  he  acted  hon- 
estly and  in  good  faith.  There  is  no  evidence  to  show  that  he  agreed 
to  guarantee  the  accuracy  of  the  result  of  his  examination,  and  there  is 
no  evidence  of  false  representations  or  of  fraud  or  negligence  by  him 
which  would  render  him  liable  to  the  plaintiff. 

Decree  affirmed. 


LAKE  CITY  FLOURING-MILL  CO.  v.  McVEAN. 
(Supreme  Court  of  Minnesota,  1884.    32  Minn.  301,  20  N.  W.  233.) 

GiLFiLLAN,  C.  J.^^  Plaintiff  was  engaged  in  operating  a  flour- 
mill  at  Lake  City.  Defendant  was  a  commission  merchant  and  ware- 
houseman engaged  in  buying  and  selling  grain  at  Maiden  Rock,  Wis- 
consin. In  May  and  June,  1882,  plaintiff  delivered  to  defendant  the 
sum  of  $1,.S00,  in  consideration  of  which,  and  of  a  commission  of  three 
cents  a  bushel  for  purchasing,  defendant  agreed  to  buy  for  said  plain- 
tiff, with  said  money,  good,  sound  wheat,  none  of  it  damp  or  musty,  at 
the  market  price  at  Maiden  Rock,  and  store  the  wheat  in  his  ware- 
house, and  there  deliver  it  to  plaintiff  on  boat  or  barge.  Of  the  wheal 
purchased  by  defendant  with  saifl  money,  !f5606.15  in  aggregate  price, 
though  when  he  purchased  it  he  believed  it  to  be  good,  sound,  and  not 
damp,  was  not  good,  sound  wheat,  but  was  damp,  and  by  reason  there- 
of became  musty  and  wholly  unfit  for  milling  purposes.  Plaintiff  re- 
fused to  receive  this  part  of  the  wheat  from  defendant,  but  demanded 

30  Acc-ord:  Pat'c  v.  Wells.  .".7  Midi.  415  (1875);  liriere  v.  Taylor,  120  Wis. 
347,  1()-)  X.  W.  817  (VMC). 

87  I'iirf  of  the  ciplnion  is  oniUtcd. 
Goiii».ri{.&  A. — '.',('} 


r)l»2  EFFECTS    AND    COXSEQI' KNTES   OF   'I'lIE    KELATION  (Part   3 

of  liini  in  lieu  thereof  wheat  of  the  kind  and  characler  described  in  the 
agreement,  \\ith  tliis  ileinand  he  refused  to  coniply.  oiTerin*:^  to  de- 
li\er  that  purchased  b\-  him  as  aforesaid.  These  are  the  facts  found 
by  the  court  below.  What  dej^rec  of  care  and  skill  defendant  bestowed 
in  purchasing  the  wheat  is  not  stated.  The  action  is  to  recover  the 
?()06.15.     *     *     * 

The  contract  was  one  of  employment.  It  created  the  relation  of 
principal  and  agent.  In  the  absence  of  express  agreement,  or  a  usage 
of  the  business  modifying  them,  the  law  attaches  to  the  relation  cer- 
tain rights,  duties,  and  liabilities.  On  the  part  of  the  agent  he  is  to 
obey  the  instructions  of  his  principal,  and  to  exercise  in  his  employ- 
ment reasonable  skill  and  ordinary  diligence ;  that  is,  the  degree  of 
skill  ordinarily  possessed  and  employed  by  persons  of  common  capac- 
ity engaged  in  the  same  business,  and  the  diligence  which  persons  of 
common  prudence  are  accustomed  to  use  about  their  own  business 
and  affairs.  Stor}^  Ag.  §  183.  For  a  loss  to  his  principal  from  neglect 
of  these  duties  he  is  liable.  But  he  is  not  an  insurer  of  success  in  the 
business.^*  He  does  not,  by  merely  accepting  the  employment,  guar- 
anty his  principal  against  such  incidental  losses  as  may  occur  in  the 
course  of  the  employment ;  "because,"  says  Mr.  Justice  Cooley,  in 
Page  V.  Wells,  37  Mich.  415,  "these  are  incident  to  all  avocations,  and 
no  one,  by  implication  of  law,  ever  undertakes  to  protect  another 
against  them."  If  the  principal  desires  to  hold  his  agent  liable  for 
such  losses  he  must  make  his  contract  of  employment  accordingly. 
We  do  not  think  the  contract  in  this  case  established  by  the  letters 
sufficient  to  change  the  liability  of  the  agent. 

Order  reversed,  and  new  trial  ordered. 

38  Professional  agents,  such  as  lawyers  and  architects,  do  not  warrant  that 
they  will  make  no  errors,  but  only  that  they  will  exercise  that  degree  of  care 
and  skill,  and  that  judgment,  which  are  common  to  the  profession  or  busi- 
ness.    Chapel  V.  Clark.  117  Mi'h.  C-'is.  7(i  N.  W.  (;2,  72  Am.  St.  Rep.  5S7  (1898). 

The  care,  skill  and  diligence  required  of  an  agent  is  illustrated  in  every 
sort  of  business.  The  following  cases  illustrate  the  rule  as  to  agents  em- 
ployed to  coUect  and  transmit  money,  Buell  v.  Chapiu,  99  Mass.  594,  97  Am. 
Dec.  58  (ISGS) ;  to  sell  iipon  credit,  Frick  &  Co.  v.  Larned,  50  Kan.  77G,  32 
Pac.  383  (1893) ;  to  collect  ordinary  debts,  Richards  v.  N.  II.  Ins.  Co.,  43  N. 
H.  203  (18fil) ;  to  collect  neaotiahle  paper,  Allen  v.  Suvdam,  17  Wend.  368 
(1837),  rever.sed  20  Wend.  321,  32  Am.  Dec.  555  (18.38);  First  Nat.  Bank  v. 
Fourth  Nat.  Bank,  77  X.  Y.  320,  33  Am.  Rep.  018  (1879) ;  Wingate  v.  Mechan- 
ics' Bank,  10  I'a.  104  (1848):  to  inve.Ht  monci/.  Van  Cott  v.  Hull,  11  App.  Div. 
89,  42  X.  Y.  Suiip.  1000  (1890);  Furber  v.  Barnes,  32  Minn.  105,  19  N.  W. 
728  (1884);  Whitney  v.  Martine,  88  N.  Y.  5.35  (1882);  to  care  for  money  andi 
properti/  in  his  pon.^cssion,  Benson  v.  Liggett,  78  Ind.  452  (1881) ;  Clark  v. 
Norwood,  19  La.  Ann.  110  (1807) ;  to  effect  insurance,  Shoenfeld  v.  Fleisher, 
73  111.  404  (1874);  Strong  v.  High,  2  Rob.  (La.)  103,  38  Am.  Dec.  195  (1842); 
Thorne  v.  Deas,  4  Johns.  84  (1809),  a  leading  case. 


Ad^ms  V,  1:0  bins  on, 

=  cts  : 

?tf .  m'^'de  «  contrfiot  ".ere  with  def.  to 
act  as  her  °gt.  in  the  le^se  or  rent  for  rer  of 
a  certain  nuilding  °t   ^  certain  s-necified  rent'^1, 
with  good  security.  The  "breach  complained  of  is 
th«t  def.,  disregarding  her  instructions,  rented  th 
"building  to  ^n   insolvent  tenant,  without  security 
with  the  result  th^t  ptf .  lost  her  rent  for  the 
yepT.  She  seeks  now  to  recover  it. 

3urt : 

This  w°s  p  v-'^^lid  contract  here.  It  is 
settled  th^'t  when  one  contracts  to  do  '^n  act  for 
another,  pnd  either  does  it  unskilfully  or  f^ils 
to  do  it  at  Pll,  ^n  action  in  the  c^se  will  lie 
f*g^±nst   him,  to  recover  such  loss  or  d^m°ge  os 
mny  result  from  his  negligence,  carelessness,  or 
w»^nt  of  skill,  etc.,  in  the  disch'^r.^e  of  the  duty 
imTj-^sed  on  him  >^:'  the  contract.  ">ere,  further- 
more, the  pp-t.  viol'^tes  his  nositive  instructions 
^iven  him  hy  prin,,  this  would  conptitutue  neg» 
^"h  ■  ch  would  renc'er  "lim  liable  for  Fuch  loss  or 
f^"-^'--^   rg  rncy  ^e    -^ccsioned  "by  his  misconduct. 

VERDICT  FOE  PTF. 

Morrison  y^  Qrr . 
''c t  F  : 


■xri'^  ..     ^ ..    .-    _ ,  -    ..inoo   eno  nerfw  ;taff;f   5el;t^e 

E  10  xLLiftL'Lii'&ass  ii   aeob  isrf^^ie   bn*^     lerf^ori 

QiL  illw  ea--^o   eii:^  nJt  noi^o«  n^^    t-^-^'^  ^^   ^^   ^^ 

aa   r — ^-»f)  10   88oX  rfojjR  levooei   o^    ,mxff  ^taiii 

10   .  ^eIea«o   .eone^ll^en  alrf  moii   d'lxrseT  y*^ 

'gib   eff;t  ni    ,.o;fe   ,IIii[8  lo  ;J: 
,               ,d'o^i:tnoo   erfit  'f^rrf  mlrf  no   bea^r 
anoxifoinjani   ©vxttxaorr  airf  ae^^Jolv  •^"g''  erf;t    ,010 
•  -gen  e;ntjTJ'i-:t5?r!00    bl ^i:rf;t    ,.nfiT  ^rf  mlrf  nev ' 

benoiS'^oo 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAIj  563 

ADAMS  V.  ROBINSON. 
(Supreme  Court  of  Alabama,  1880.     65  Ala.  586.) 

This  action  Avas,  brought  by  Mrs.  ^Margaret  Robinson,  a  married 
woman,  against  J^mes  R.  Adams,  and  was  commenced  on  the  19th 
September,  1877.  ■  The  complaint  contained  but  a  single  count,  which 
was  in  the  words';  "Plaintiff  claims  of  defendant,  who  is,  and  was  at 
the  time  of  the  committing  of  the  grievance  hereinafter  mentioned,  a 
real-estate  agent  in  the  city  of  Montgomery,  in  said  county  and  State, 
six  hundred  dollars  as  damages,  for  that  the  plaintiff,  during  the  year 
1875,  intrusted  and  put  under  the  defendant's  control,  as  a  real-estate 
agent  as  aforesaid,  a  certain  valuable  store-room,  and  the  cellars 
connected  therewith,  the  property  of  said  plaintiff,  being  a  part  of 
the  corpus  of  her  statutory  separate  estate,  and  being  situated  in  said 
city  of  Montgomery,"  &c.,  describing  it,  "for  the  purpose  of  having 
the  defendant,  as  such  real-estate  agent,  lease,  let  or  rent  for  her  the 
said  store-room  and  cellars,  for  a  period  not  exceeding  one  year,  be- 
ginning October,  1875,  and  ending  October,  1876,  at  the  rate,  sum, 
or  price  of  $600  per  annum,  payable  in  monthly  or  quarterly  install- 
ments, with  good  and  approved  security ;  and  said  plaintiff  avers, 
that  she  expressly  instructed  said  defendant,  in  substance,  in  no  event 
to  lease  or  rent  out  said  store-room  and  cellars  at  a  less  rate  or  price 
than  $600  per  annum,  with  good  and  approved  security  ;  and  that  said 
defendant  accepted  the  management  and  control  of  said  property  im- 
der  the  aforesaid  instructions,  and  it  thereupon  became  and  was  the 
duty  of  said  defendant  not  to  lease  or  rent  out  the  said  store-rooms 
and  cellars  without  good  security,  under  and  in  accordance  with  the 
said  instructions  of  plaintiff,  and  to  pay  to  plaintiff  the  said  rent  as 
stated,  and  to  deliver  said  store-room  and  cellars  to  plaintiff  at  the 
expiration  of  such  lease  or  renting  as  aforesaid.  But  said  defendant, 
disregarding  his  duty  in  the  premises,  violated  said  instructions  of 
plaintiff,  and  wrongfully  and  without  authority  rented  and  leased  said  \ 
store-room  and  cellars  to  an  insolvent  tenant  or  tenants,  without  i 
security,  and  otherwise  conducted  himself  in  so  improper  a  manner,  I 
and  so  negligently  and  carelessly,  that  the  rent  of  the  said  store-room  f 
and  cellars,  or  the  value  thereof,  for  said  year,  was  wholly  lost  to 
plaintiff.     Wherefore  she  sues,"  &c. 

Tlie  defendant  demurred  to  the  comi)laint.  Dennirrcr  overruled,  and 
verdict  and  judgment  for  plaintiff. 

Somf:kvillE,  J."*"  The  comi)laint  in  this  case  alleges  a  valid  con- 
tract between  the  plaintiff  and  the  defendant,  the  violation  by  the  de- 
fendant of  a  duty  growing  out  of,  and  imposed  on  him  by  it,  and  a 
loss  consequent  thereon.     Its  averments  were,  therefore,  sufficient, 

30  I'art  of   llic  o|iiiiion   Is  (Hiiittod. 


\ 


564  EFFECTS   AND   CONSFQUFNCES   OF  TIIR    RELATION  (Part  3 

certainly  to  enlitlo  the  iilaiiuiff  io  the  recovery  of  iioniiiial  charges. — 
Code  (1876)  §  297i>.  If  the  ilefeiulaiit  rented  otit  the  plaintiff's  store- 
house, contrary  to  her  instruetit^ns,  a  right  oflaction  arose  immedi- 
ately, in  favor  of  the  latter,  against  the  former.!  The  principle  is  well 
settled,  that  when  one  contracts  to  do  an  act  iak  another,  and  either 
\  does  it  unskillfully,  or  fails  to  do  it  at  all,  an  action  in  the  case  will 
,  lie  against  him,  to  recover  such  loss  or  damage  as  may  result  from 
his  negligence,  carelessness,  or  want  of  skill,  in  the  discharge  of  the 

\  duties  imposed  on  him  by  the  contract.  liMvers  v.  Gilbert,  18  Ala. 
467.  I  ' 

Every  wrong  imports  a  damage,  and  wifen  none  other  is  proved, 
and  the  evidence  shows  a  clear  breach  of  clftty,  nominal  damages  are 
always  recoverable.  Bagby  v.  Harris,  9  Ala.  173;  Sedgwick  on 
Dam.,  6th  Ed.,  461  [337].  _       . 

r-^  Where,   furthermore,   an   agent  violates   his   positive   instructions 
given   him   by   a   principal,  this   would   constitute   gross   negligence, 
which  would  render  him  liable  for  such  loss  or  damage  as  may  be 
occasioned  by  his  misconduct ;   and,  on  a  principle  well  recognized  in 
i      many  cases  of  tort,  every  doubtful  circumstance  would  be  construed 
•      unfavorably  to  the  rights  and  interests  of  the  agent  thus  perpetrating 
i     the  wrong.     Story  on  Agency,  §  333;    Dodge  v.  Tileston,  12  Pick. 
333,  334."°     ♦     *     *    Judgment  affirmed. 


MORRISON  V.  ORR. 
(Supreme  Court  of  Alabama,  1832.    3  Stew.  &  P.  49,  23  Am.  Dec.  319.) 

Lipscomb,  C.  J.*^  The  defendant  in  error  placed  in  the  hands  of 
the  plaintiff  in  error,  an  exemplification  of  a  judgment,  rendered  in 
Georgia,  in  his  favor,  against  one  Allen  Orr,  and  took  from  him,  a 
receipt  for  the  same,  in  the  following  words,  viz. : 

"July  31st,  1824.  This  day,  received  of  Nathan  Orr,  a  demand  in 
writing,  against  Allen  Orr,  for  the  sum  of  two  hundred  and  sixty-five 
dollars,  damages,  and  a  further  sum  of  fourteen  dollars  thirty-seven 
cents,  costs.  I  am  to  endeavor  to  collect  said  amount,  and  pay  it  over 
to  said  Orr.  If  it  cannot  be  collected,  to  make  due  return  of  the 
same,  to  the  said  Orr.  Damages  awarded  on  the  20th  June,  1824. 
[Signed]  R.  C.  Morrison." 

<o  The  agent  Is  equally  liahle  whether  the  omission  of  skill  and  diligence 
Is  the  ix'sult  of  inattention,  or  incapacity,  or  of  an  intent  to  defraud.  Heine- 
mann  v.  Heard,  .50  X.  Y.  27  (1872). 

The  right  of  the  agent  to  exi)enses  and  reimbursement  depends  upon  wheth- 
er they  were  incurred  in  the  exercise  of  ordinary  diligence,  lirown  v.  Clay 
ton,  12  Ga.  .004  (180:i). 

*i  Part  of  the  opinion  is  omitted. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL 


5G5 


This  receipt  was  the  foundation  of  the  action.  The  plaintiff  below 
charged  the  defendant,  Morrison,  with  negUgence,  in  not  using  the 
■necessary  means,  to  collect  the  amount  of  the  judgment  placed  in  his 
Hafids. 

On  the  trial,  the  plaintiff  proved,  the  defendant  was  the  administra- 
tor of  Allen  Orr;  that  the  estate  had  been  declared  insolvent;  that 
the  claim  had  not  been  allowed  by  the  County  court,  nor  had  it  been 
acted  on;  that  he  had  demanded  the  money  andVecord  of  the  said 
Morrison,  the  defendant. 

The  defendant  proved,  that  he  placed  the  exemplification  of  the 
judgment  in  the  hands  of  an  attorney,  for  collection,  in  the  lifetime  of 
AITen  Orr;    and  that  suit  had  been  brought  on  it;    and  that  it  was 
dismissed,  in  the  year  1825,  for  want  of  testimony — the  record  not 
having  been  aijtFenticated  in  tTie  manner  prescribed  by  law.  "That  the 
"attorney  wrote  to  Georgia,  for  an  exemplification,  properly  authenti- 
cated, but  never  received  an  answer.     It  was  further  proved,  by  the 
plaintiff,  that  the  claim  had  never  been  filed  for  an  allowance;    and, 
Ttial'tTie  settlement  of  the  estate  had  been  postponed,  at  the  instance 
of  Morrison,  from  September,  1828,  till  October,  1829.    The  defend- 
ant's attorney  proved,  that  he  had  attended,  for  the  purpose  of  laying 
the  claim  before  the  judge  of  the  County  court,  and  having  it  acted 
on;    but  was  informed,  by  him,  that  the  settlement  had  been  post- 
poned and  that  he  was  drawn  into  an  error  by  him,  as  to  the  time 
when  it  would  take  place,  and  that  it  passed  without  his  knowledge. 
On   this   testimony,   the  judge   on   the   trial,   in  the   court   below, 
charged  the  jury,  that  they  were  bound,  in  the  absence  of  testimony, 
^s  to  the  fact,  to  infer  that  Morrison  was  to  receive  compensation  for 
his  agency;  and  that  he  was  therefore  bound  to  a  greater  diUgence ; 
that  his  not  presenting  the  claim  for  an  allowance,  made  him  liable. 
This  charge  was  excepted  to,  and  is  now  assigned  for  error. 
~~TFMorrison  had  been  an  attorney,  whose  business  and  employment 
was  the  collection  of  debts,  there  is  no  doubt  that  the  inference  drawn 
by  the  judge  would  have  been  correct.    If  one  receives  business,  with- 
in the  line  of  his  profession,  or  occupation,  and  promises  attention  to 
it — or,  if  he  does  not  make  an  express  promise,  one  would  be  implied 
"^the  law  would  create  a  presumption,  that  he  was  to  receive  the, 
ofcHnary  compensation,  although  not  a  word  had  been  said  about 
compensation.     But,  it  seems  to  me.  that  the  presumption  rests  en- 
tirely on  the  ground,  that  it  is  in  the  proper  line  of  the  business  of  the 
person  so  undertaking  it:    and,  if  not  accustomed  to  such  agencies 
forjiixc,  that  the  law,  so  far  from  presuming  that  a  compensation 
was  to  be  received,  would  infer  that  it  was  a  mere  naked  agency,  or 
mandatory^  in  which  compensation  is  not  an  ingredient,  in  the  under- 
laEiig.     It  is  one  of  those  friendly  offices,  that,  in  our  relations  with 
society,  daily  occur,  without  either  party  ever  thinking  of  compensa- 
tioiir~~" """  ^ 


566  EFFECTS  AM>  (•(iNsi-.Qri:Nci:s  (^F  TUK  KKi.A'noN        (Part  3 

This  distinction  is  rcooi^nizi'd  by  CU'wi  Ju^licc  Kent,  in  Tliorne  v. 
Doas.  4  Johns.  84.'''-'  If,  tlion,  it  was  a  vohnitarv  and  oraluitous 
agency,  withont  reward,  iho  agent  was  not  Hahlc  for  a  non-feazancc 
— he  might  perform  his  luulertaking,  or  not,  as  snited  his  conven- 
ience. It  is  trne,  by  tlie  civil  law,  he  wmild  he  liable  to  the  man- 
dator, for  all  damages  that  ensued  from  his  failure  to  perform  his 
promise ;  but  (juite  a  different  rule  prevails  at  common  law :  by 
the  latter,  such  contracts  are  held  to  be  of  imperfect  obligation,  and 
not  to  be  enforced  at  law,  for  w^int  of  a  sufificient  consideration. 

In  a  case,  where  one  joint-owner  of  a  ship,  promised  the  other 
joint-owner,  to  have  an  insurance  effected,  and  failed  to  do  so — on 
the  ship  being  lost,  a  suit  was  brought,  and  the  promise  was  held  to 
be  nudum  pactum.    4  Johns.  84. 

It  should,  at  any  rate  have  been  matter  of  proof,  before  the  jnry, 
whether  Morrison  was  to  receive  compensation  or  not. 

But  suppose  the  case  should  be  viewed  in  another  aspect ;  and  that 
the  agent  w-as  to  receive  a  compensation  for  his  agency — are  the 
facts  in  this  case,  such  as  to  render  him  liable?  If  such  had  been 
the  terms  of  his  undertaking,  he  would  only  have  been  held  to  the 
exercise  of  ordinary  care  and  attention,  to  the  best  of  his  skill,  and 
not  such  as  a  professional  man,  that  is,  one  whose  business  it  was  to 
conduct  law  suits,  would  be  expected  to  use.  Story  on  Bailment,  283 
&  289.  Orr  must  have  known  that  Morrison  was  not  an  attorney 
at  law,  and  he  had  no  right  to  expect,  in  him,  that  skill  and  knowl- 
edge so  necessary  to  conducting  a  law  suit.  He  certainly  calculated 
that  he  would  employ  an  attorney  at  law  to  bring  the  suit,  and  take 
on  himself  the  whole  conduct  of  it ;  and  if  Morrison  had  neglected 
to  employ  counsel,  and  undertaken  the  management  of  a  suit  himself, 
he  would,  perhaps,  have,  by  so  doing,  fallen  short  of  ordinary  dili- 
gence.    He  employed  counsel,  and  suit  was  brought.     *     *     * 

We  are  therefore  of  opinion,  that  in  any  aspect,  Morrison  was  not 
liable — that  if  he  is  to  be  considered  as  an  agent,  under  wages  for 
his  services  as  agent,  that  no  sufificient  negligence  has  been  fixed  on 
him,  to  make  him  liable  for  the  debt ;  and  that  there  is  much  less 
semblance  of  liability,  if  he  is  to  be  viewed,  as  we  think  he  ought,  on 
this  record,  as  a  mandatory  only. 

The  judgment  must,  therefore,  be  reversed. 

♦  2  See  especially  Thorne  v.  Deas,  4  Johns,  84  (1800),  per  Kent.  C.  J.  Also 
Grant  v.  Ludlows'  Adni'r,  8  Ohio  St.  1  (1857),  in  which  the  court  discusses 
The  various  conditions  to  be  considered  in,  and  the  iudeliniteness  of,  defini- 
tions of,  negligence  and  gross  negligence. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  567 


WALKER  V.  SMITH. 

(United  States  Circuit  Court  for  the  Third  District,  1S04.     1  Wash,  C.  C.  152, 

Fed.  Cas.  No.  17,0S6.) 

The  plaintiffs,  merchants  in  London,  having  been  applied  to  by  a 
Mr.  BrOwn  of  Philadelphia,  for  a  parcel  of  goods,  and  doubting  his 
soifdi'ty,'^\vere  introduced  by  the  mutual  friend  of  the  plaintiff'  and  de- 
fencTant,  to  the  defendant  (Robert  Smith) ;  and  on  this  introduction, 
they  sent  the  goods  to  him,  and  in  a  letter,  stating  their  apprehensions 
of  Brown,  requested  him  to  receive  the  goods,  but  not  to  deliver  them 
to'TTFown,  without  payment  for  the  amount  being  received,  or  such 
security-  given,  as  the  defendant  should  approve;  and  in  case  neither 
was  done,  he,  the  defendant,  was  to  dispose  of  them  for  account  of 
ptain tiffs.  The  defendant  received  the  goods,  and  delivered  them  to 
Brown,  without  receiving  payment  or  security.  Brown  afterwards 
failed ;  and  by  a  compromise,  part  of  the  debt  was  received,  and  remit- 
ted to  the  plaintiffs ;  and  this  action  was  brought  to  recover  the  bal- 
ance. In  the  account  forwarded  by  the  defendant,  to  the  plaintiffs,  aft- 
er  the~lailure  of  Brown,  and  the  compromise,  no  commissions  are 
charged^ 

TVashington,  Circuit  Justice  [Charging  Jury:]  This  is  a  short 
and  perfectly  clear  case.  The  facts  are  few,  and  agreed  between  the 
parties.  It  is  my  duty  to  state  to  you  the  law,  and  to  apply  it  to  the 
case.  The  principles  of  law,  as  applied  to  the  duties  and  obligations 
of  agents,  have  been  correctly  stated  by  the  plaintiffs'  counsel.  No 
man  can  compel  another  to  render  him  acts  of  friendship,  or  services 
of  any  kind,  whether  gratuitously,  or  with  a  view  to  a  remuneration. 
But,  if  the  person  applied  to,  consents  to  render  the  service,  and  under- 
takes the  business,  he  is  bound  to  act  in  conformity  to  the  terms  on 
which  the  request  was  made.  This  rule  is  universal  in  its  application, 
whateverlriay'be  the  situations  or  professions  of  the  parties ;  but,  in 
commercial  agencies,  it  is  of  great  consequence,  that  it  should  be  rig- 
idly enforced.  'J'he  defendant,  by  receiving  the  goods,  and  undertaking 
to  act  concerning  them,  bound  himself  to  hold  them,  until  paid  for,  or 
secured  by  Brown ;  anrl  on  his  failure  to  do  either,  to  dispose  of  them 
Tor^account  of  the  plaintiffs.  But  what  has  he  done?  He  delivered 
them  to  Brown,  without  receiving  payment  or  security;  he  did  the 
very  thing  he  was  cautioncfl  not  to  do.  The  discretion  which  the  de- 
fenflant  had,  was  confined  to  the  kind  of  security  to  be  taken,  and  did 
not  leave  him  at  liberty  to  take  security;  or  deliver  the  goods  without 
any,  as  he  might  think  proper.  Had  he  taken  security,  which  after- 
wards became  insufficient,  he  would  have  been  excused;  provided  he 
acted  with  that  caution  and  prudence,  which  he  would  have  observed 
in  his  own  case.  The  defendant,  by  the  very  nature  of  the  transaction, 
was  entitled  to  a  commission,  as  certainly  as  if  the  plaintiffs  had  prom- 
ised it:    and  his  relinf|uishing  this  compensatfon,' affer^fie  loss  had 


568  EFFECTS   AND    CONSlUJL'l^NCKS   OF   THE    UELATION  (Part   O 

taken  place,  cannot  alter  the  case.  Indeeil,  he  wouUl  have  been  liable, 
if  it  hail  been  undertaken  gratuitously.  There  was  no  ambiguity  in  the 
plaintiff's  letter  upon  the  subject;  and  therefore,  the  defendant  is 
without  excuse,  and  has  taken  upon  himself  to  answer  for  the  loss, 
lie  has  made  himself  a  guarantee  of  the  debt. 

The  next  question  is,  as  to  the  damages  ?  T  admit  the  principle,  that 
in  cases  sounding  in  damages,  the  amount  of  those  damages  depends 
upon  the  sound  discretion  of  the  jury.  In  cases,  where  merely  vindic- 
tive damages  are  sued  for,  the  jury  act  without  control  on  this  subject; 
because  there  is  no  legal  rule  by  wdiich  they  can  be  measured ;  and 
unless  they  are  so  extravagant  as  to  induce  a  suspicion  of  improper 
conduct,  the  court  will  not  interfere.  But  in  these  cases,  where  a  rule 
can  be  discovered ;  the  jury  are  bound  to  adopt  it.  That  rule  is,  that 
the  plaintiff  should  recover  so  much,  as  will  repair  the  injury  sustained 
by  the  misconduct  of  the  defendant ;  and  applying  this  rule  to  the  pres- 
ent case,  what  other  measure  of  damages  can  be  thought  of,  but  the^ 
sum  lost  to  the  plaintiff  by  the  violation  of  his  orders?  The  sum  de- 
manded, is  of  no  great  consequence,  perhaps,  to  either  of  the  parties. 
on  the  score  of  its  amount.  But  the  question  itself  is  important  to  the 
commercial  interests  of  this  country;  in  its  intercourse  with  foreign 
nations.  A  precedent  is  to  be  set  to  determine  in  a  case  like  this, 
whether  an  agent  is  liable  for  a  breach  of  orders,  and  to  what  amount. 

The  jury  found  for  the  plaintiff ;  but  a  sum  much  inferior  to  the  loss 
he  had  sustained. 

[The  plaintiffs'  counsel  then  moved  for  a  new  trial,  because  the  ver- 
dict was  against  law,  evidence,  and  the  charge  of  the  court ;  but,  after 
argument,  the  motion  was  overruled,  and  it  was  observed  by  Wash- 
ington, Circuit  Justice,  that  although  he  was  not  satisfied  with  the 
verdict,  nor  should  he  have  assented  to  it  as  a  juror,  yet  the  question 
of  damages,  or  of  interest  in  the  nature  of  damages,  belonged  so  pe- 
culiarly to  the  jury,  that  he  could  not  allow  himself  to  invade  their 
province ;  while  he  felt  a  determination  to  prevent,  on  their  part,  any 
invasion  of  the  judicial  province  of  the  court.] 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  569 

SECTION  4.— ACCOUNTING 
I.  General  Duty 


DODGE  V.  HATCHETT. 
(Supreme  Court  of  Georgia,  1903.     118  Ga.  SS3,  45  S.  E.  667.) 

Attachment. 

■CobbTJ."  Dodge  sued  Hatchett,  alleging  that  he  delivered  to  the 
defendant,  in  trust,  and  to  be  sold  for  the  account  of  the  plaintiflF,  and 
tRFproceeds  returned  to  him,  certain  personal  property,  consisting  of 
horses,  mules^  and  a  saddle  and  bridle,  all  of  the  value  of  $850 ;  that 
the  defendant  sold  and  disposed  of  the  property,  and  has  accounted  to 
plaintiff  only  for  the  sum  of  $435 ;  that  plaintiff  has  demanded  of  the 
deTendant  the  remainder  of  the  proceeds,  which  he  fails  and  refuses  to 
pavoyen  It  is  alleged  that  by  reason  of  these  facts  the  defendant  is 
"TndebteTto  plaintiff  in  the  sum  of  $415,  besides  interest.  The  defend- 
ant answered,  admitting  that  the  property  had  been  delivered  to  him 
as  alleged,  but  denied  that  it  was  of  the  value  alleged,  and  set  up  that 
the  amount  paid  to  plaintiff  and  the  expenses  incurred  in  taking  care 
of  and  selling  the  property  amounted  to  more  than  its  value.  He  also^ 
denied  that  any  demand  had  been  made  upon  him,  or  that  he  was  in- 
debted to  plaintiff  in  any  sum  whatever.  The  trial  resulted  in  a  ver- 
dict  for  the  defendant ;  and,  the  plaintiff's  motion  for  a  new  trial  hav- 
mg  been  overruled,  he  excepted. 

The  theory  of  the  plaintiff's  case,  as  indicated  by  his  petition,  was 
that  the  defendant  was  his  agent  to  sell  and  account.*^  There  was 
evidence;  for  the  plaintiff  tending  to  show  that  this  was  the  true  rela- 
tion between  the  parties.  If  such  was  the  case,  it  was  the  duty  of  the 
agent  tojkcep  and  render  to  his  principal  an  account  of  all  receipts  and 
dis5ursemen.ts^_and,  whenever  reasonably  requested  to  do  so,  to  make 
and  present  to  lTTs"principal  a  full  and  complete  statement  of  his  deal- 
ings and  the  state  of  the  account  between  ihcm.  See  Civ.  Code  1895, 
§  3007 ;  1  Am.  &  Eng.  Enc.  L.  (2d  Ed.)  1086,  1089 ;  Mechem,  Ag.  §§ 
522,  528;  Reinhard,  Ag.  §  245. 

In  a  suit  against  such  an  agent,  after  the  plaintiff  has  shown  the 
agreement  between  them  creating  the  agency,  that  the  property  was 
delivered  to  the  agent,  and  that  the  same  has  been  sold,  the  burden  is 
shifted  to.  tbe  defendant  to  discharge  himself  by  showing  that  no  such 
agreement  existed,  or  that  the  property  was  never  delivered,  or  that 

«8  A  servant  or  clerk  Is  not  In  Kcncrul  p.xppctod  to  keep  .'Krounts.  More- 
over an  n-cnt  fjinnot  be  held  liable  for  not  keeping  accounts,  if  it  is  dear 
his  principal  did  not  wish  hiiu  to  do  so.  Rich  v.  Austin,  40  Vt.  410,  4;{.{ 
(1667J. 


/^ 


wTO  Kl'l'Kl"TS    AND    CONSIXJIKNCKS    OF   TllK    KKl.Al'lON  (L'ait    3 

ho  has  fully  accounted,  ov  some  other  reason  why  he  should  not  1)C 
hold  liable  to  the  plaintifT.  See  Lee  v.  Clements,  48  Ga.  128;  Oliver 
V.  Hammond,  85  Ga.  32'),  11  S.  K.  655  (2) ;  Thomas  v.  Funkhouser,  91 
Ga.  478.  18  S.  E.  312.  The  judge  charged  the  jury,  in  effect,  thatjthe 
lilaintitT  carried  the  burden  of  proof  throughout  the  case,  and  failed  to 
charge  that  the  burden  would  be  shifted  uniler  the  circumstances  above 
stated.  We  think  this  was  such  an  error  as  to  require  the  granting 
of  a  now  trial,  under  the  facts  of  this  case.  Even  if  the  defendant's 
evidence  was  of  such  a  character  that  the  jury  might  have  found  that 
he  relieved  himself  from  liability  to  the  plaintifif,  still  the  error  requires 
a  reversal  of  the  judgment,  for  the  reason  that  the  evidence  was  con- 
flicting at  many  material  points,  and  the  plaintifif  was  entitled  to  have 
the  theory  of  the  case  as  indicated  by  his  evidence  submitted  to  the 
jury. 

Judgment  reversed.    All  the  Justices  concur. 


PETERSON  V.  POIGNARD. 

(Court  of  Appeals  of  Keutucky,  1S4S.     47  Ivy.  [8  B.  Mon.]  309.) 

Attachment  in  chancery. 

MarshaIvL,  C.  J.**  *  *  *  There  are  several  circumstances 
w^hich  tend  strongly  to  excite  suspicion  with  regard  to  the  fidelity  of 
Poignard  in  his  agency.  Indeed  we  regard  it  as  being  well  established, 
that  he  acted  in  several  particulars  in  violation  of  his  trust,  and  that 
he  has  neglected  his  duty  in  a  most  important  point,  in  not  having  kept 
a  precise  and  accurate  account  of  all  transactions  pertaining  to  his 
agency.  His  competency  to  do  this  is  well  established,  and  it  cannot 
be  doubted  that  he  was  well  aware  of  its  importance  and  necessity. 
His  failure  authorizes  unfavorable  inferences,  and  subjects  him  now 
when  called  on  for  an  account,  to  a  heavy  burthen  of  suspicion,  as  well 
as  of  proof.^^ 

Nevertheless,  we  are  not  of  opinion  that  on  these  grounds,  every 
doubt  which  may  arise  in  the  case,  should  as  a  matter  of  course,  be 
solved  against  him.  The  difficulties  and  presumptions  arising  from 
the  great  lapse  of  time,  within  which  nearly  all  the  parties  concerned 
in  or  cognizant  of  the  most  questionable  transactions  now  involved, 
have  died,  and  many  facts  have  doubtless  been  forgotten  by  those  who 
remain,  should  operate  to  some  extent  against  Peterson,  who  had  full 
knowledge  of  Poignard's  agency,  and  of  the  means  in  his  hands,  and 
of  the  interests  and  transactions  committed  to  him,  and  yet  although 
pressed  and  harassed  from  early  in  the  year  1835,  for  debts  which 
Poignard  ought  to  have  paid  for  Monroe  if  he  could,  and  although  he 

*♦  Part  of  the  opinion  is  omitted. 

•♦5  The  loss,  and  still  more  the  destruction,  of  his  accounts  by  the  agent 
must  fall  most  heavily  upon  himself.    Gray  v.  Ilaig,  20  Beav.  219  (1854). 


Ch.  1)  DUTIES  AXD  LIABILITIES  OF  AGENT  TO  IIIS  PRINCIPAL  571 

was  for  several  years  in  full  correspondence  with  Poignard,  it  docs  not 
appear  that  he  ever  complained,  or  ever  inquired  of  his  acts,  until  some 
short  time  before  he  filed  his  cross  bill  in  1838. 

Poignard,  with  his  first  answer  to  the  cross  bill,  filed  an  account  of 
moneys  paid,  and  liabilities  incurred  for  Alonroe,  amounting  to  about 
$4,850,  and  a  list  of  moneys  received  for  him,  of  about  $1,391.  The 
master  to  whom  the  accounts  were  referred,  allowed  as  charges  against 
^lonroe,  only  about  $2,700,  and  made  additional  charges  against 
Poignard,  which  swelled  the  account  against  him  to  about  $7,663 ;  and 
calculating  interest  on  each  side,  stated  a  balance  against  Poignard  of 
more  than  $8,500.  To  this  report,  Poignard  filed  nineteen  exceptions, 
complaining  of  charges  made  and  credits  refused.  He  also  filed  eleven 
exceptions  to  the  account  stated,  as  between  Peterson  and  Alonroe, 
and  Peterson  filed  four  exceptions  to  the  two  accounts. 

The  general  dismissal  of  the  bill  without  an  explicit  decision  upon 
any  of  these  exceptions,  has  thrown  upon  this  Court  the  labor  of  in- 
vestigating them  all  upon  the  pleadings  and  evidence  contained  in  a 
record  of  more  than  900  pages. 

As  already  said,  the  only  difficulty  which  it  is  necessary  to  meet, 
arises  upon  the  accounts  between  Poignard  and  IMonroe.  Upon  many 
of  the  exceptions  made  to  this  account,  the  question  as  to  the  propriety 
of  the  charge  made,  or  the  credit  claimed,  admits  of  no  certain,  and 
not  even  a  satisfactory  solution.  We  have  had  to  weigh  probability 
against  probability,  conjecture  against  conjecture,  and  doubt  against 
doubt. 

We  do  not  deem  it  necessary  to  state  in  this  opinion  the  facts  and 
considerations  applying  to  the  numerous  exceptions  to  the  report  of 
Poignard's  accounts.  After  a  laborious  investigation  of  the  record, 
and  the  fullest  consideration  which  we  have  been  enabled  to  bestow 
upon  it,  we  have  come  to  the  conclusion,  that  after  making  all  just 
charges  and  credits  that  are  sufficiently  established  on  either  side,  and 
including  all  claims  made  by  Poignard,  he  stands  indebted  to  Monroe's 
estate  in  the  sum  of  at  least  one  thousand  dollars ;  and  under  the  un- 
certainties which  meet  us  on  every  side,  we  cannot  safely  say  that  he 
owes  more. 

Wherefore,  the  decree  is  reversed,  and  the  cause  remanded,  with 
directions  to  render  a  decree  for  the  payment  of  one  thousand  dollars 
by  Poignard,  in  discharge  of  his  debt  to  Monroe's  heirs,  and  in  dis- 
ciiarge  of  so  much  of  Peterson's  demand  against  Monroe's  estate, 
which  sum  should  be  decreed  either  to  Peterson  or  for  the  benefit  of 
the  complainant,  Fisk,  as  circumstances  may  dictate  and  Poignard 
should  pay  the  costs  both  in  this  and  in  the  Chancery  Court. 


oTw  EFFECTS  AND   CONSKQUENCKS   OF  TUE   llELATION  (Part  3 

MOYSES  V.  ROSENBAUM. 

(Appelhlte  Court  of   Illinois,   liXK).     1)8  111.   App.   7.) 

FrKKman,  p.  J.  Plaintiff  in  error  sued  to  recover  a  balance 
claimed  to  be  due  him  for  a  salary  upon  a  written  contract  for  the  last 
month  of  the  term  of  his  em])l()yment  thereunder.  The  cause  was  sub- 
mitted to  the  trial  court  without  a  jury,  and  from  the  judgment  ren- 
dered, this  writ  of  error  is  prosecuted. 

It  appears  from  the  contract  that  plaintiff  in  error  was  employed  for 
a  year  at  a  fixed  salary  payable  monthly,  and  was  to  receive  also  under 
certain  conditions  a  specified  commission  not  involved  in  this  contro- 
versy. The  contract  further  provided  that  defendant  in  error  should 
pay  all  the  plaintiff's  traveling  and  other  expenses  not  to  exceed  $2,250 
per  annum.  It  appears  from  the  stipulation  of  facts  between  the  par- 
ties that  the  defendant  repeatedly  demanded  of  the  plaintiff  itemized 
statements  of  the  money  expended  by  the  latter  on  account  of  such  ex- 
penses. These  the  plaintiff  never  rendered.  He  merely  reported,  with- 
out further  explanation,  that  his  expenses  had  been  in  one  case  $385 ; 
in  another  $27;  in  another  $531.40;  and  another  $562.60;  adding  in 
the  last  instance  that  his  total  expenses  for  the  year  had  been  $1,506. 
No  statement  of  what  the  expenses  were,  for  which  this  sum  had  been 
expended,  was  ever  vouchsafed  by  the  employe,  but  there  is  evidence 
tending  to  show  that  in  one  case  the  latter  wrote  to  his  employer  he 
had  expended  money  for  a  purpose  which  investigation  showed  it  had 
not  been  used  for.*® 

That  the  employer,  Rosenbaum  &  Co.,  had  a  right  to  be  informed 
specifically  what  the  expenses  were  which  they  were  called  upon  to 
pay  under  the  contract,  admits  of  no  serious  question.  They  agreed 
to  pay  "traveling  and  other  expenses"  incurred  by  plaintiff  in  error 
while  in  their  employment,  not  to  exceed  a  certain  sum.  They  had  a 
right  to  know  that  the  expenses  charged  were  legitimate  business 
charges.  Indeed,  it  is  stipulated  between  the  parties  "that  the  term 
'expenses'  as  used  in  the  contract,  includes  only  actual  outlays  neces- 
sarily made  by  plaintiff  for  railroad  and  stage  fares,  meals  en  route, 
hotel  bills,  porterage,  cartage,  and  a  reasonable  amount  for  the  treat- 
ing of  customers,  and  also  includes  the  expense  of  maintaining  an 
office  in  Chicago."  The  meaning  of  the  contract  undoubtedly  is  that 
the  defendant  in  error  agreed  to  pay  only  such  expenses  as  these 
enumerated,  legitimately  incurred  in  their  business,  the  total  amount 
not  to  exceed  in  any  event  $2,250.  But  they  did  not  agree  to  pay  any 
other  or  different  expenses  plaintiff  in  error  might  incur,  and  were  not 
bound  to  pay  anything  without  knowing  what  it  was  for,  and  that  it 
was  a  legitimate  expense  of  the  business. 

Plaintiff  in  error  therefore  stands  charged  with  the  money  advanced 

<6  The  more  complicated  and  difficult  the  accounts,  the  more  imperative  the 
duty  of  the  agent.     Jenkins  v.  Gould,  3  Kuss.  ys5  (1827). 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  573 

him  for  expenses  and  not  accounted  for.  Until  he  does  so  account, 
defendant  in  error  is  entitled  to  offset  against  his  account  the  balance 
of  $231.91,  claimed  to  be  due  for  salary.  "The  law  is  settled  and  sus- 
tained by  reason  that  the  duty  of  an  agent  is  not  fulfilled  in  a  case 
of  this  kind  by  reporting  to  his  principal  that  he  has  spent  a  round  sum 
of  money  in  prosecuting  his  employment.  *  *  *  His  duty  to  keep 
and  preserve  true  and  correct  statements  of  account  is  a  necessary 
consequence  of  his  duty  to  account.  An  account  is  a  detailed  state- 
ment. It  must  be  something  which  will  furnish  to  the  person  having 
the  right  thereto,  information  of  a  character  which  will  enable  him  to 
make  some  reasonable  test  of  its  accuracy  and  honesty."  Wolf  Co.  v. 
Salem,  33  111.  App.  616. 

The  views  above  expressed  make  it  unnecessary  to  discuss  in  detail 
the  propositions  of  law  submitted  by  plaintiff,  the  refusal  of  which  by 
the  trial  court  is  assigned  as  error.  No  error  was  committed  in  re- 
fusing to  hold  them  as  expressing  the  law  applicable.  The  judgment 
of  the  Superior  Court  is  affirmed. 


KELLOGG  V.  KEELER. 

(Appellate  Court  of  Illinois,  1888.     27  111.  App.  244.) 

Garnett,  J.  This  was  an  action  of  assumpsit  by  appellee  against 
appellant,  judgment  being  given  for  $750  against  appellant,  from  which 
he  appeals.  In  the  summer  of  1886  Keeler  sold  to  Kellogg  four  lots 
in  Chicago  for  $6,400.  The  transaction  was  not  closed  by  deed  until 
late  in  October  of  that  year.  Before  the  delivery  of  the  deed  to  Kel- 
logg the  lots  were  again  sold  by  Keeler  to  one  Hill  for  $7,550.  The 
latter  sale  was  made,  as  Keeler  now  claims,  by  authority  of  Kellogg. 
In  his  evidence  Keeler  says,  when  he  agreed  to  let  Kellogg  have  the 
property  for  $6,400,  he  told  him  he  would  let  him  have  it  if  he  would 
allow  him  (Keeler)  to  re-sell  it  for  him ;  that  Kellogg  said  if  he  made 
$100  a  lot  profit  he  would  be  satisfied ;  that  he  (Keeler)  told  him  he 
thought  he  could  sell  it  for  that  before  he  got  the  deed,  as  property 
was  advancing.  That  authority  given  to  sell  the  lots  for  $6,800,  is,  to 
some  extent,  corroborated  by  the  evidence  of  Hoffman,  a  witness  for 
ai)pellee.  But  there  is  no  evidence  in  the  record  tending  to  support 
appellee's  claim  that  he  is  entitled  to  the  difference  between  $6,800  and 
$7,550.  To  maintain  that  proposition  he  testified  to  a  conversation 
with  appellant  some  months  after  he  was  given  authority  to  sell,  when 
he  put  certain  questions  to  appellant  for  the  purpose  of  securing  an 
admission  that  he  was  to  have  all  he  sold  the  lots  for  above  $6,800. 
But  Kellogg  made  no  such  admiss^n,  nor  docs  any  witness  testify  that 
such  was  the  contract.  There  i(l,  in  fact,  nothing  in  the  record  that 
warrants  apjicllce's  contention./  Autliority  to  an  agent  to  sell  at  a 
stipulated  figure  does  not  amount  to  a  contract  to  give  him  all  he  sclN 


/ 

\ 


r»74  KKFICOTS    AND    CONSKQrKNCKS   OF  THE    UEI-ATION  (Part   3 

for  above  that  sum.  Kcrfoot  v.  Ilynian.  52  111.  512.  It  is  still  the  duty 
of  the  agent  to  make  the  jiroperty  bring  the  highest  price  that  can  be 
obtained,  and  account  to  his  principal  for  the  whole  sum  less  his  rea- 
sonable compensation.''' 

The  only  evidence  as  to  \\\\:i[  was  a  reasonable  compensation  on  such 
a  sale  tended  to  prove  that  the  highest  reasonable  charge  would  be  a 
much  less  sum  than  $750.  There  being  no  evidence  to  support  a  ver- 
dict for  $750.  the  judgment  is  reversed  and  remanded. 

Reversed  and  remandeil. 


TRIPLER  v.  OLCOTT. 

(Court  of  (liancery  of  New  York,  1818.    3  .Tohns.  Ch.  473.) 

Fanning,  being  indebted  to  Lord,  gave  him  a  bill  of  sale,  absolute  on 
its  face,  of  the  ship  Zephyr,  on  the  agreement  that  Lord  should  rec- 
ompense himself  and  hold  the  ship  and  surplus  earnings  to  the  use  of 
Fanning.  Later  for  a  similar  purpose  he  assigned  the  ship  and  surplus 
earnings  to  Tripler  and  Craig.  Olcott  was  employed  by  Fanning  as 
master  of  this  ship,  and  after  the  assignment  to  Lord  he  accounted  to 
him  as  owner  for  all  earnings. 

Kent,  Chancellor.*^  This  case  was  brought  to  a  hearing  on  the 
part  of  the  defendant  Olcott,  and  we  are  only  to  discuss  the  case  as 
it  regards  him. 

Tw'O  of  the  plaintiffs  (Tripler  &  Craig)  have  not  shown  any  right  or 
title  whatever  to  an  account,  for  they  have  not  proved  the  assignment 
charged  in  the  bill  to  have  been  made  by  Fanning  to  them  on  the  18th 
of  December,  1813.  This  assignment  is  the  only  foundation  of  their 
claim,  and  it  is  not  admitted  by  the  answer.  We  must  recur  to  the 
resulting  trust  of  Fanning,  as  the  only  existing  right  shown  on  the  part 
of  the  plaintiffs. 

The  bill  of  sale  from  Fanning  to  Lord  was  absolute  upon  its  face, 
and  no  resulting  trust  appears.  Nor  is  there  proof  of  the  express 
agreement  charged  in  the  bill.  The  evidence,  that  the  bill  of  sale  was 
intended  to  be  qualified  and  not  absolute,  appears  from  the  two  letters 
of  Lord  to  Olcott,  of  the  29th  of  December,  1812,  and  the  16th  of 
August,  1813.  In  the  one,  he  says,  that  the  bill  of  sale  arose  from  the 
failure  of  Fanning  and  others,  and  was  for  the  purpose  of  paying 
custom  house  bonds,  and  to  save  friends;  and  in  the  other  he  states, 

<7  TliG  duty  of  the  agent  to  account  is  not  affected  by  the  fact  that  the 
profit  or  advantage  he  received  was  the  result  of  the  violation  of  his  duty  as 
agent.  Graham  v.  Cununings,  208  I'a.  .516,  .57  Atl.  04:'.  (1!)()4)  nor  by  the  fact 
that  the  profits  were  received  after  the  account  with  his  i)rincii)al  lias  been 
settled.  Morrison  v.  Thonip.son,  43  L.  J.  Q.  B.  21.5,  L.  K.  9  Q.  B.  480,  30  L. 
T.  8fJ9,  22  W.  R.  8.59  (1874).  The  principal  has  his  election  to  take  his  money, 
or  the  property  which  tiie  agent  has  without  authority  purchased  with  this 
money.     Greene  &  Co.  v.  Haskell,  5  R.  I.  447  (185Sj. 

■«*'  Part  of  the  opinion  is  omitted. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  575 

that  he  took  the  ship  and  freight  as  security  for  ahout  $6,000,  and  to 
cover  a  demand  of  one  Carey  for  $1,500.  These  were  representations 
entirely  contrary  to  the  statement  in  the  bill  of  the  agreement  between 
Fanning  and  Lord,  made  on  the  delivery  of  the  bill  of  sale.  Nor  do 
the  two  accounts  given  in  the  letters  correspond  with  each  other,  and 
they  were  mentioned  to  Olcott  rather  incidentally,  and  without  any 
full,  precise,  and  satisfactory  explanation  of  the  trust.  They  were  not 
intended  to  form  any  rule  or  guide  to  Olcott's  conduct,  and  he  could 
only  look  to  Lord,  as  the  owner.  The  authentic  evidence  which  he 
had  of  any  right  or  title  in  the  property,  was  the  bill  of  sale  and  the 
letter  of  attorney ;  and  he  could  not,  and  did  not,  recognize  any  other 
title,  interest,  or  authority.  A  resulting  trust,  mentioned  in  this  in- 
cidental and  obscure  manner,  and  especially  when  attended  with  the 
clear  title  and  positive  acts  and  instructions  of  Lord  as  owner,  did  not, 
probably,  attract  any  attention  from  Olcott ;  and  he  says,  in  his  answer, 
that  he  considered  Lord  as  the  sole  owner,  and  as  having  the  exclusive 
interest,  and  that  he  would  not  have  accepted  of  any  agency  for  any 
other  person,  distinct  from  that  of  master  of  the  ship. 

On  his  return  to  the  United  States,  in  October,  1814,  he  duly  ac- 
counts to,  and  with  Lord ;  and  the  question  is,  whether  he  is  bound  to 
account  also  to  Fanning. 

It  does  not  appear  to  me  that  Olcott  could,  with  safety  or  propriety, 
have  dealt  with  any  other  person  than  Lord.  He  had  no  business  or 
concern  with  the  dealings  between  Lord  and  Fanning,  and  the  loose 
hints  communicated  to  him  by  Lord  were  of  no  use.  It  would  be 
equally  dangerous  and  inconvenient,  in  the  business  and  affairs  of  the 
workC  to  deny,  that  Olcott  could  not  definitively  and  safely  account 
with  Lord,  under  the  circumstances  of  this  case.  If  there  had  been 
fraud  and  collusion,  charged  and  proved  between  him  and  Lord,  in 
the  settlement,  to  the  prejudice  of  the  known  rights  of  others,  it  would 
have  presented  a  very  different  question.  But  no  such  allegation  or 
proof  exists ;  Fanning  must  look  to  Lord,  and  cannot  look  beyond  him, 
for  an  account  of  the  management  and  proceeds  of  the  property  as- 
signed to  him  in  trust. 

It  is  stated  to  have  been  held  in  Pollard  v.  Downcs,  2  Ch.  Cas.  121. 
that  where  a  trustee  made  a  letter  of  attorney  to  S.  to  manage  and  re- 
ceive the  rents  and  profits  of  land,  and  S.  afterwards  accounted  to  the 
trustee,  for  his  agency,  he  was,  after  the  death  of  the  trustee,  and  on 
a  bill  by  the  cestui  (|ue  trust,  directed  to  account  to  him. 

That  case  is  so  destitute  of  all  facts  and  circumstances  requisite  to 
a  clear  understanding  of  the  principle  and  the  application,  that  it  can 
.scarcely  be  regarded  as  an  authority.  It  may  be  that  there  was  a  col- 
lusion i)et\veen  the  trustee  and  the  agent,  or  that  the  agent  had  notice 
from  the  jirincipal  not  to  account  with  the  trustee,  or  that  the  trust  had 
expired  at  the  time.  It  is  impossible  to  be  maintained,  that  if  an  agent 
duly  and  fairly  accounts  with  his  immediate  and  authorized  principal, 
that  he  is  bound,  in  all  cases,  to  account  over  again  to  the  person  stand- 


.■)"()        EFKKCTS  AND  CONSKQI' KNCES  OF  THE  RELATION    (Part  3 

ing  behind  his  iniinodiato  principal.  This  wonUl  be  a  doctrine  not  to 
be  endured ;  there  must  have  been  something  in  the  case  cited  which 
does  not  now  appear,  and  which  gave  it  a  special  directicm.  Lord  Eldon, 
in  Beaumont  v.  Boultbee,  7  Vesey,  605,  610,  617,  laid  down  this  rule, 
that  an  account  settled  between  an  under  and  an  upper  agent,  without 
vouchers,  and  upon  mere  cmifidence,  was  not  to  be  considered  as  set- 
tled against  the  principal,  without  allowing  him  the  liberty  to  surcharge 
and  falsify  those  accounts.  But,  in  that  case,  it  appeared  that  the  un- 
der steward,  (as  he  was  termed,)  was  employed  both  by  the  upper 
steward  and  the  principal,  and  the  liberty  given  to  the  principal  went 
no  farther  than  to  surcharge  and  falsify;  and  that  was  founded  on  the 
extraordinary  and  unusual  mode  of  accounting  which  had  been  adopted 
in  that  case.  Under  such  checks  and  limitations,  there  can  be  no  doubt 
that  the  party  ought  to  account  again  to  the  person  who  has  the  ulti- 
mate interest.  But  when  no  special  circumstances  appear,  and  there  is 
no  fraud,  then  I  apprehend  the  general  rule  to  be  otherwise,  and  that 
it  was  truly  declared  in  Clavering's  Case,  Prec.  in  Ch.  535.  *  *  * 
Bill  dismissed. 


THARP  V.  THARP. 
(Supreme  Court  of  Vermont,  1843.     15  Vt.  105.) 

RkdfiEld,  J.  This  being  a  bill  in  chancery  to  compel  an  account, 
in  a  case  where  a  court  of  law  has  concurrent  jurisdiction  with  courts 
of  equity,  if  the  claim  is  barred  at  law,  it  cannot  be  enforced  in  equity. 
This  is  a  uniform  rule.  Staniford  v.  Tuttle,  4  Vt.  R.  82.  Hall  v.  Hall, 
8  Vt.  156. 

This  claim  is  of  nearly  forty  years  standing,  and  the  only  ground  of 
exception  to  the  operation  of  the  statute  of  limitations,  is  the  fact,  that 
the  present  claimant  and  his  ancestor,  in  whose  right  he  claims,  have 
resided  without  the  state  and  beyond  sea.  All  claims  of  such  persons, 
until  the  year  1832,  were  exempted  from  the  operation  of  the  statute  of 
limitations  in  this  state.  At  that  time  this  exemption  v^as  repealed 
without  any  saving  in  favor  of  those  even,  whose  rights,  by  the  general, 
terms  of  the  statute  of  limitations,  had  already  become  barred ;  thus, 
in  terms,  at  once  extinguishing  all  such  claims.  It  is  not  necessary, 
now,  to  inquire  whether  it  could  have  been  the  intention  of  the  legis- 
lature thus  summarily  to  annihilate  this  class  of  claims,  or  how  far, 
giving  the  statute  its  literal  operation,  it  is  to  be  esteemed  a  contraven- 
tion of  the  United  States  constitution.  It  is  sufficient  for  the  present 
case,  that,  after  the  repealing  of  that  exemption,  and  before  the  bring- 
ing the  present  bill,  more  than  six  years  had  elapsed,  and  thus  the 
plaintiff's  right  had  become  effectually  barred  by  the  statute  of  limita- 
tions.   This  is  a  sufficient  reason  why  this  bill  cannot  be  maintained. 

There  is  one  other  point  in  the  case,  which  seems  to  be  equally  con- 
clusive.    This  defendant,  it  is  admitted,  rendered  to  the  orator's  an- 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  577 

cestor  a  full  account  of  his  proceedings,  as  early  as  1807,  and  trans- 
mitted to  him  a  copy  of  his  account  current  in  1811.  The  ancestor  sur- 
vived until  1821,  with  these  accounts  rendered,  in  his  hands,  and  with- 
out any  the  least  objection  to  their  fairness  and  accuracy;  and  after 
his  decease,  until  the  filing  of  the  present  bill  in  1841,  twenty  years 
more  have  elapsed,  and  no  complaint  is  made  by  the  heir.  UnderAhese 
circumstances,  it  would  be  wholly  unprecedented  for  a  court  of /equity 
to  open  the  account.  Mr.  Justice  Story,  1  Equity  Jurisp.  SOi],  says, 
"An  account  rendered  shall  be  deemed  an  account  stated,  from  tihe  pre- 
sumed approbation  and  acquiescence  of  the  parties,  unless  an  objection 
is  made  thereto  in  a  reasonable  time."  And  "a.  settled  account  will  be 
deemed  conclusive  between  the  parties,  unless  some  fraud,  mistake, 
omission  or  inaccuracy  is  shown."  *^ 

This  bill  is  not  brought  with  any  view  to  surcharge  or  falsify  an' 
account  settled  between  the  parties.  That  the  time,  which  has  elapse 
since  the  account  was  rendered,  is  sufficient  to  bind  the  parties  to  it,  as 
an  account  settled,  is  apparent.  In  Murry  v,  Toland,  3  Johns.  Ch.  569, 
575,  it  is  laid  down  "If  a  merchant  receives  a  stated  account  from 
abroad,  and  keeps  it  by  him,  any  length  of  time,  e.  g.  two  years,  without 
objection,  he  is  bound  by  it,  and  equity  will  not  decree  an  account  to  be 
taken  afterwards."  The  cases  of  Ellison  v.  Maffatt,  1  Johns.  Ch.  46, 
and  Mooers  v.  White,  6  Johns.  Ch.  360,  are  to  the  same  point.  Also 
Irvine  v.  Robertson,  3  Rand.  (24  Va.)  549. 

Decree  of  the  chancellor  affirmed  with  costs. 

<8  An  account  stated  is  a  mere  admission  that  the  account  Is  correct.  It 
Is  only  prima  facie,  and  does  not  work  an  estoppel.  The  account  may  still 
be  impeached  for  errors.  Ruffner  v.  Hewitt,  7  W.  Va.  585  (1874) ;  Perkins  v. 
Hart,  11  Wheat.  25G,  G  L.  Ed.  463  (182G).  Failure  in  a  reasonable  time  to 
object  to  an  account  rendered  is  presumptive  acceptance  of  it  as  correct,  but 
the  presumption  is  not  conclusive  and  may  be  rebutted  by  circumstances 
accounting:  for  the  failure  to  object.  Lockwood  v.  Thorne,  18  N,  Y.  288 
(1858) ;  Id.,  11  N.  Y.  173,  62  Am.  Dec.  81  (1854). 
GODD.PB.&  A.— 37 


578  EFFKOTS   AND   CONSKlJl  KNCES   OF  THE    UELATION  (Part  3 

II.    TlTl.lC    AS    r.l-TWI-I'N    PKIN'ni'AT,    AND    ACUNT/ 

(A)   In    Cc  lie  nil 
SALEM  TUACTION  CO.  v.   ANSON."" 

(Supremo  Court  of  Ori',m>n,  li)0l2.     41  Or.  niJlZ,  (!!)  Tnc.  GTH.) 

Trover  for  $3. 561. OS  which  the  complaint  alleged,  and  the  lower 
court  found,  defendant,  as  manager  of  plaintiiif's  street  railway,  had 
collected  and  not  accounted  for. 

Bkan,  J.'*^  *  *  *  j|.  jg  j^g^j.  contended  that  the  plaintiff's 
remedy  was  hy  an  action  on  contract,  and  not  in  trover,  and  hence 
the  complaint  does  not  state  facts  sufficient  to  constitute  a  cause  of 
action.  As  a  general  rule,  the  mere  failure  of  an  agent  to  pay  over 
or  account  for  money  collected  for  his  principal  will  not  sustain  an 
action  of  conversion,  because  the  agent  is  not  bound  to  pay  over  the 
identical  money  received,  and  the  transactions  create  nothing  more 
than  th^  relation  of  debtor  and  creditor  between  him  and  his  principal. 
Royce  j.  Oakes,  20  R.  I.  418,  39  Atl.  758,  39  L.  R.  A.  845 ;  Hart- 
man  v/Hicks,  28  Misc.  Rep.  527,  59  N.  Y.  Supp.  529;  Vandelle  v. 
Rohai/  36  Misc.  Rep.  239,  73  N.  Y.  Supp.  285 ;  Walt^.  Bennett, 
16  N.  Y.  250;  Borland  v.  Stokes,  120  Pa.  278,  14  Atl.  6i  But  where 
the  principal  is  entitled  to  receive,  and  the  terms  of  th^  employment 
of  the  agent  require  him  to  pay  over,  the  identical  money  received, 
an  action  of  trover  will  lie  for  its  conversion.  ^»Jackson  v.  Anderson, 
4  Taunt.  24;  Petit  v.  Bouju,  1  Mo.  64;  Bungef' v.  Roddy,  70  Ind.  26; 
Donohue  v.  Henry,  4  E.  D.  Smith,  162;  Farfand  v.  Hurlbut,  7  Minn. 
477  (Gil.  383);  Cotton  v.  Sharpstein,  14  Wis.  226,  80  Am.  Dec.  774; 
Express  Co.  v.  Piatt,  51  Minn.  568,  53  N.  W.  877. 

And  such  was  the  case  here.  The  defendant  was  the  agent  and  gen- 
eral manager  of  the  plaintiff  corporation,  with  power  and  authority 
to  collect  the  moneys  due  it  for  services  rendered.  All  the  money  so 
collected  belonged  to  his  principal.  The  title  immediately  vested  in 
the  plaintiff,  and  the  defendant  had  no  interest  therein,  and  no  au- 
thority to  make  any  use  thereof  whatever.  He  was  bound  by  the 
terms  of  his  employment  to  pay  the  money  over  to  the  treasurer  of 
the  plaintiff  corporation,  and  could  not  even  use  it  for  the  payment 
of  current  expenses  without  the  approval  of  his  superior.  The  plain- 
tiff, as  a  matter  of  right,  therefore,  was  entitled  to  the  identical  money 

50  Arrord:  Wells  v.  Collins,  74  Wis.  lUl,  43  N.  W.  IGO,  5  L.  R.  A.  .5.31  (l.SSt)), 
in  whieh  the  court  found  the  relation  hetween  a,i;ent  and  itrlnei])al  was  not 
one  of  debtor  and  creditor,  l)ut  the  proijerty  in  the  very  money  collected  by 
the  agent  vested  in  the  principal.  Lance  v.  P.utler,  13.5  N.  C.  419,  47  S.  !•]. 
488  a004).  holdinfi  that  the  proceeds  of  sale  by  the  agent  are  a  trust  fund 
held  by  him  for  the  principal. 

51  Part  of  the  opinion  is  omitted. 


Ch.  1)  DrTIES  AND  LIABILITIKS  OF  AOEXT  TO  HIS  PRIXCITAL  579 

received  by  the  defendant  on  its  account,  and  any  unlawful  use  or 
misapplication  thereof  constituted  a  conversion,  for  which  an  action 
of  trover  was  an  appropriate  remedy.  Mech.  Cas.  Ag.  §  476 ;  Henry 
V.  Sowles  (C.  C.)  28  Fed.  521 ;  Cotton  v.  Sharpstein,  14  Wis.  226, 
80  Am.  Dec.  774.    *     *     * 


DIXON  v.  HAMOND. 

(Court  of  King's  P.euch,  1819.     li  B.  &  Aid.  310.) 

Dixon  as  assignee  in  bankruptcy  of  Davidson  brings  assumpsit  for 
money  had  and  received.  Davidson  was  the  surviving  partner  of 
Flowerden,  who  owned  a  ship,  the  Sidney,  which  he  pledged  to  de- 
fendant as  security  for  a  loan.  Defendant  was  an  insurance  broker, 
and  effected  an  insurance  on  the  ship  as  agent  of  Flowerden  and 
Davidson.    Verdict  for  plaintiffs  and  defendant  moved  for  a  new  trial. 

Abbott,  C.  J.  If,  in  order  to  maintain  this  action,  it  were  neces- 
sary to  shew  that  the  legal  title  to  this  ship  was  in  the  present  plain- 
tiffs, there  could  be  no  doubt  that  the  defendant  would  be  entitled  to 
our  judgment.  For  it  is  clear  that  the  ship  never  belonged  to  the 
partnership  at  all.  It  was  originally  the  property  of  Flowerden  alone, 
and  by  him  the  legal  interest  was  first  transferred  to  Hart,  and  sub- 
sequently vested  in  the  present  defendant.  He,  however,  in  1815 
receives  an  order  to  effect  an  insurance  on  the  ship  and  freight  on  the 
partnership  account,  and  he  does  effect  it,  and  accounts  with  the 
partnership  for  the  premiums."  After  this,  the  ship  is  lost,  and  he 
receives  the  money  from  the  underwriters.  Then,  in  truth,  the  legal 
title  to  the  ship  has  nothing  to  do  with  this  question.  The  right  of 
the  plaintiffs  to  recover  here  depends  on  a  settled  rule  of  law,  that 
an  agent  shall  not  be  allowed  to  dispute  the  title  of  his  principal,  and 
that  he  shall  not,  after  accounting  with  his  principal,  and  receiving 
the  money  in  that  capacity,  afterwards  say,  that  he  did  not  do  so,  and 
did  not  receive  it  for  the  benefit  of  his  principal,  but  for  that  of  some 
other  person.  Here  the  defendant  has  received  the  money  as  agent 
for  the  i)artnership,  and  he  cannot  now  be  permitted  to  say,  that  he 
received  it  for  the  benefit  of  Flowerden  alone.  All  the  rest  of  the 
world,  cxcei)t  the  defendant,  might  dispute  the  legal  title  of  the  plain- 
tiffs to  the  shij),  but  lie  cannot  do  it.  There  is,  therefore,  no  reason 
for  granting  this  rule.'^^ 

'■'2  If  the  ML'fiit  ackiiowlc'dtro  tin*  receipt  of  inoiioy  or  property  for  tlio  prin- 
eipnl.  atid  ImliKe  tlie  iiriiicipal  t<>  jict  lliereon.  he  will  lie  e.stopited  tliereafler 
to  show  that  he  (lid  not  receive  it.  \\«,„\  v.  I'daney,  107  ("ai.  'J'.M,  10  I'ac.  IL'S 
(1S<I.-,|. 

13  The  concurring  opinlon.s  of  IJayley  and  Ilnlinyd  are  oinitlcd. 


5S0        EFFECTS  AND  CONSEQUENCES  OF  TUE  RELATION    (Part  3 

WITMAN  V.  FELTON. 

(Supronio   (\iurt  of   Missouri.   ISf)!).     12S  Mo.  COl.) 

NapTon,  J.  This  was  a  suit  between  principal  and  accent.  The 
latter  had  collected  a  sum  of  money  for  the  former  under  a  power  of 
attorney,  and  this  action  was  brought  to  recover  it.  The  defence  was, 
that  the  money  did  not  belong  to  the  principal  and  this  was  offered 
to  be  shown  generally,  and  also  by  the  production  of  a  paper  in  pos- 
session of  the  plaintiffs.  The  proof  was  excluded  by  the  court  and 
this  exclusion  presents  the  only  question  in  the  case. 

An  agent  has  discharged  his  duty  when  he  pays  over  to  his  prin- 
cipal the  money  he  was  authorized  to  collect.  It  is  of  no  importance 
to  him  whether  his  principal's  title  to  the  money  or  property  be  good 
or  bad.  This  is  a  matter  which  concerns  third  persons,  who,  if  they 
desire  to  protect  their  interests,  can  easily  do  so,  either  before  or  after 
the  termination  of  the  controversy  between  the  principal  and  agent. 
This  principle  of  law  is  conceded,  but  it  is  said  that  the  paper  called 
for  in  this  case,  and  which  it  was  alleged  would  show  that  the  money 
collected  by  the  defendant  belonged  to  third  persons,  was  admissible 
to  show  that  the  money  was  not  really  collected  under  the  power  of 
attorney,  and  was  not  collected  as  agents  for  the  plaintiffs.  Of  course 
this  could  be  shown,  and  if  there  had  been  any  offer  to  show  this, 
there  could  be  no  doubt  the  evidence  should  have  been  admitted.  But 
the  mere  fact  that  the  money  collected  belongs  to  third  persons  has  no 
tendency  to  disprove  the  allegation  that  it  was  collected  as  money  of 
the  principal,  especially  where  the  only  proof  previously  introduced 
in  the  case  was  positive  and  unequivocal  that  the  money  was  collected 
under  the  power  of  attorney  and  as  agent  for  the  plaintiffs.  If  the 
simple  fact  that  the  money  does  not  really  belong  to  the  principal 
is  sufficient  to  rebut,  or  entitled  to  any  weight  in  rebutting  the  positive 
proof  of  agency,  then  such  evidence  must  be  legitimate  in  all  cases 
of  this  kind,  and  in  every  suit  between  principal  and  agent,  the  latter 
can  go  into  the  question  of  the  ownership  of  the  property  or  money 
which  he  has  collected,  upon  the  vague  presumption  that  the  money 
or  property  was  not  obtained  through  the  agency,  simply  because  the 
principal  did  not  have  any  right  to  it.  Such  a  course  would  defeat 
all  the  rules  of  evidence,  and  practically  annul  the  responsibility  of 
agents. 

Judgment  affirmed.    The  other  judges  concur. 


Ch.  1)  DUTIES  AND  LIABILITIES  OP  AGENT  TO  HIS  PRINCIPAL  581 

(B)  Illegality  as  a  Defense 

TENANT  V.  ELLIOTT. 
(Court  of  Common  Pleas,  1797.    1  Bos.  &  P.  3,  4  Rev.  Rep.  755.) 

Assumpsit  for  money  had  and  received  from  an  insurance  company 
upon  an  illegal  policy  of  insurance  on  a  ship  lost  at  sea. 

Duller,  J.  Is  the  man  who  has  paid  over  money  to  another's 
use  to  dispute  the  legality  of  the  original  consideration?  Having  once 
waived  the  legality,  the  money  shall  never  come  back  into  his  hands 
again.  Can  the  defendant  then  in  conscience  keep  the  money  so  paid  ? 
For  what  purpose  should  he  retain  it?  To  whom  is  he  to  pay  it  over; 
who  is  entitled  to  it  but  the  plaintiff? 

Eyre,  Ch.  J.  The  defendant  is  not  like  a  stake-holder.  The  ques- 
tion is,  whether  he  who  has  received  money  to  another's  use  on  an  il- 
legal contract,  can  be  allowed  to  retain  it,  and  that  not  even  at  the  de- 
sire of  those  who  paid  it  to  him  ?    I  think  he  cannot. 

The  defendant  took  nothing  by  his  motion. 


BALDWIN  BROS.  v.  POTTER. 

(Supreme  Court  of  Vermont,  1874.    46  Vt.  402.) 

General  assumpsit.  Defendant  sold  for  plaintiff  prize  candy  on  com- 
mission. He  claimed  this  was  "setting  up  a  lottery"  ^vithin  the  mean- 
ing of  the  Vermont  statute,  and  refused  to  account.  Judgment  for 
plaintiff. 

PiERPOiNT,  Ch.  J.  We  do  not  find  it  necessary  in  this  case  to 
consider  the  question  as  to  whether  the  contract  for  the  sale  of  thq 
property  referred  to,  by  the  plaintiffs,  to  the  several  persons  who  pur- 
chased it,  were  contracts  made  in  violation  of  law,  and  therefore  void, 
or  not.  This  action  is  not  between  the  parties  to  those  contracts ;  nei- 
ther is  it  founded  upon,  or  brought  to  enforce  them.  If  those  contracts 
were  illegal,  the  law  will  not  aid  either  party  in  respect  to  them;  it  will 
not  allow  the  seller  to  sue  for  and  recover  the  price  of  the  property 
sold,  if  it  has  not  been  paid;  if  it  has  been  paid,  the  purchaser  cannot 
sue  for  and  recover  it  back.  The  facts  in  this  case  show  that  the  pur- 
chasers paid  the  money  to  the  plaintiffs,  not  to  the  plaintiffs  personally, 
but  to  the  flcfendant  as  the  agent  of  the  plaintiffs,  authorized  to  re- 
ceive it.  When  the  money  was  so  paid,  it  became  the  plaintiff's  money, 
and  when  it  was  received  by  the  defendant  as  such  agent,  the  law,  in 
consideration  thereof,  implies  a  promise  on  the  part  of  tlie  defendant, 
to  pay  it  over  to  his  principals,  the  plaintiffs;  it  is  this  obligation  that 
the  present  action  is  brought  to  enforce;  no  illegality  attaches  to  this 
contract.     But  the   defendant   insists   that,  inasmuch   as  the   plaintiff 


r)S2  KPFICCTS   AND    CONSlHn'HNCKS   OF  THE    UELATION  (Part   3 

coulil  not  have  enforced  the  contracts  of  sale  as  between  himself  and 
the  purchaser,  therefore,  as  the  purchaser  has  performed  the  contracts 
by  paying  the  money  to  the  jilaintilTs  through  me,  as  their  agent,  I  can 
now  set  up  the  illegality  of  the  contract  of  sale  to  defeat  an  action 
brought  to  enforce  a  contract  on  my  part  to  pay  the  money  that  I  as 
agent  receive,  over  to  my  principal.  In  other  words,  because  my  prin- 
cipal did  not  receive  the  iiumcy  on  a  legal  contract,  I  am  at  liberty  to 
steal  the  money,  apjirojiriate  it  to  my  own  use,  and  set  my  principal  at 
defiance.  We  think  the  law  is  well  settled  otherwise,  and  the  fact  that 
the  defendant  acted  as  the  agent  of  the  plaintififs  in  obtaining  orders 
for  the  goods,  does  not  vary  the  case.  Tenant  v.  Elliott,  1  B.  &  P.  3 ; 
Armstrong  v.  Toler,  1 1  Wheat.  258,  6  L.  Ed.  468 ;  Evans  v.  City  of 
Trenton.  24  N.  J.  Law,  '764." 

We  think  the  certificate  granted  by  the  county  court  was  properly 
granted.  It  has  been  urged  in  behalf  of  the  defendant,  that  the  zeal 
with  which  he  has  defended  this  case  shows  that  he  intended  no  wrong ; 
but  we  think  the  man  who  receives  money  in  a  fiduciary  capacity,  and 
refuses  to  pay  it  over,  does  not  improve  his  condition  by  the  tenacity 
Avith  which  he  holds  on  to  it. 

Judgment  of  the  county  court  affirmed. 


BERNARD  v.  TAYLOR. 

(Supreme  Court  of  Oregon,  1893.     23  Or.  416,  31  Pac.  968,  IS  L.  R.  A.  859,  37 

Am.  St.  Rep.  693.) 

Action  to  recover  $560  deposited  with  defendant  as  a  wager  on  a 
foot  race.    Judgment  for  plaintiff. 

Lord,  C.  J.^°  *  *  *  jj^g  next  contention  for  the  defendant  is 
that  the  alleged  agreement  was  corrupt,  illegal,  and  criminal,  in  this : 
that  it  was  in  advance  "fixed"  that  one  of  the  parties  should  win,  and 
that  certain  persons  should  lose  their  money.    In  other  words,  that  the 

5  4  In  United  States  Expre.ss  Co.  v.  Lucas,  36  Ind.  361  (1871),  the  rule  is 
stated  thus:  "We  think  the  ascnt  is  estopped  to  dispute  the  title  of  liis  prin- 
cipal to  tlie  money  which  lie  has  received  for  liim.  A  tenant  cannot  dispute 
the  title  of  the  landlord,  under  and  hy  virtue  of  which  lie  oi)taiiied  possession 
of  the  premises.  A  hailee  cannot  disi)ute  the  titk;  of  the  hailor  from  whom 
he  received  the  thint;  bailed;  especially  he  cannot  set  uj)  title  in  himself. 
^^'hy  should  an  a^'ciit  he  allowed  to  place  himself  in  a  position  of  hostility 
to  his  principal  and  himself  claim  that  which  he  has  i-eceived  for  liim?  Paley 
on  Agency,   p.   10,  and  note  k,  and  authorities  there  cited."' 

Approved  in  Iteed  v.  Dougan,  54  Ind.  306  (1876),  and  in  Wilt  v.  Town  of 
Redkey,  29  Ind.  Api).  199,  64  N.  E.  228  (1902). 

Cf.  Mexican  Int.  Banking  Co.  v.  Lichtenstein,  10  Utah,  338,  37  Pac.  574 
(1894),  In  which  the  court  held  that  an  employment  to  sell  lottery  tickets  cre- 
ates no  agenc.v  at  all.  The  emiiloyinent  was  void.  P>oth  parties  were  prin- 
cipals in  a  crime  and  the  courts  will  not  helj)  to  compel  a  division  of  the 
.spoils,  ('ontra:  Norton  v.  P>linn,  39  Ohio  St.  145  (1883),  which  cites  with 
approval  lialdwin  v.  Potter  above. 

55  Part  of  the  ojnnion  is  omitted. 


/.. 


h.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  583 

agreement  had  in  contemplation  "a  job  race."  This,  it  is  claimed,  put 
the  pl'aintiff  in  pari  deHcto  with  the  defendant,  and,  as  a  consequence, 
he  is  entitled  to  the  benefit  of  the  rule,  pntior  est  condition!  possiden- 
tis. The  general  rule  is  that  the  law  will  not  interfere  in  favor  of  ei- 
ther party  in  pari  delicto,  but  will  leave  them  in  the  condition  in  which 
they  are  found,  from  motives  of  public  policy.  There  is  no  doubt, 
where  money  has  been  paid  on  an  illegal  contract,  which  has  been  ex- 
ecuted, and  both  parties  are  in  pari  delicto,  the  courts  will  not  compel 
the  return  of  the  money  so  paid.  But  the  cases  show  that  an  impor- 
tant distinction  is  made  between  executory  and  executed  illegal  con- 
tracts. A\'hile  the  contract  is  executory,  the  law  will  neither  enforce  it 
nor  award  damages ;  but,  if  it  is  already  executed,  nothing  paid  or  de- 
livered can  be  recovered  back.  So  that,  while  the  contract  is  execu- 
tory, the  party  paying  the  money  or  putting  up  the  property  may  re- 
scind the  contract  and  recover  back  his  money.  This  arises  out  of  a 
distinction  between  an  action  in  afifirmance  of  an  illegal  contract  and 
one  in  disaffirmance  of  it.  In  the  former,  such  an  action  cannot  be 
maintained,  but  in  the  latter  an  action  may  be  maintained  for  money 
had  and  received.  The  reason  is  that  the  plaintiff's  claim  is  not  to  en- 
force, but  to  repudiate,  an  illegal  agreement.  Whart.  Cont.  §  354.  In 
such  case,  there  is  a  locus  penitentise.  The  wrong  is  not  consummated, 
and  the  contract  may  be  rescinded  by  either  party. 

In  Edgar  v.  Fowler,  3  East,  225,  Lord  Ellenborough  said :  "In  ille- 
gal transactions,  the  money  has  always  been  stopped  while  it  is  in 
transitu  to  the  person  entitled  to  receive  it."  As  Lord  Justice  ■\Iellish 
said:  "To  hold  that  the  plaintiff  is  entitled  to  recover  does  not  carry 
out  the  illegal  transaction,  but  the  effect  is  to  put  everybody  in  the 
same  situation  as  they  were  before  the  illegal  transaction  was  deter- 
mined upon,  and  before  the  parties  took  any  steps.  If  money  is  paid 
or  goods  delivered  for  an  illegal  purpose,  the  person  who  has  so  paid 
the  money  or  delivered  the  goods  may  recover  them  back  before  the 
illegal  purpose  is  carried  out;  but  if  he  waits  till  the  illegal  purpose  is 
carried  out,  or  if  he  seeks  to  enforce  the  illegal  transaction,  in  neither 
can  he  maintain  an  action.  The  law  will  not  allow  that  to  be  done." 
Taylor  v.  i'.owcrs,  1  Q.  li.  Div.  291.  In  llastelow  v.  Jackson,  8  Barn. 
&  C.  221,  which  was  an  action  by  one  of  the  parties  to  a  wager  on  the 
event  of  a  boxing  match,  commenced  against  the  stakeholder  after  the 
battle  had  been  fought,  Littledale,  J.,  said:  "If  two  persons  enter  into 
an  illegal  contract,  and  money  is  paid  upon  it  by  one  to  the  other,  that 
may  be  recovered  back  before  the  execution  of  the  contract,  but  not 
afterwards."  Smith  v.  Bickmore,  4  Taunt.  474 ;  Tappcnden  v.  Ran- 
dall, 2  Iios.  &  P.  467;  Lowry  v.  Bourdicu,  2  Doug.  452;  IMunt  v. 
Stokes,  4  Term  R.  561  ;  Insurance  Co.  v.  Kip,  <S  Cow.  20;  Mcrritt  v. 
Millard,  *43  N.  Y.  208;  White  v.  I'.ank,  22  Pick.  181;  O'liryan  v. 
I'itzpatrick,  48  Ark.  490,  3  S.  VV.  527.  "And  this  rule,"  says  Mr.  Jus- 
tice Woods,  "is  applied  in  the  great  majority  of  the  cases,  even  when 


oSi  EFFECTS  AND  CONSEQUENCES  OF  THE  RELATION    (Part  3 

the  parties  to  an  illegal  contract  arc  in  pari  delicto,  because  the  ques- 
tion which  of  tAvo  parlies  is  the  more  blaniahle  is  often  diflicult  of  solu- 
tion, ami  quite  immaterial."  Spring  Co.  v.  Knowlton,  103  U.  S.  60,  26 
L.  Kd.  347.  The  object  of  the  law  is  to  protect  the  public  and  not  the 
parties.  This  is  upon  the  principle  that  it  best  comports  with  public 
policy  to  arrest  the  illegal  transaction  before  it  is  consummated.  Stacy 
V.  Foss,  19  Me.  555,  36  Am.  Dec.  755.^" 

It  only  remains  to  apply  these  principles  to  the  facts.  These  show 
that  the  plaintiff  was  cognizant  that  the  race  had  been  fixed  in  ad- 
vance ;  that  one  of  the  parties  should  win,  and  that  certain  other  per- 
sons should  lose  their  money ;  that  it  was  a  bogus  race,  and  the  ar- 
rangement based  upon  it  corrupt,  and  designed  to  cheat  and  defraud 
the  other  parties ;  but  at  the  same  time  they  show  that  he  repented,  and 
repudiated  the  transaction  before  it  was  consummated,  by  demanding 
the  return  of  his  money  the  evening  of  the  day  before  the  race,  and  on 
the  day  of  the  race,  but  before  it  was  to  come  off,  and  that  the  defend- 
ant refused  to  pay  it  back,  and  that  he  afterwards  forbade  the  defend- 
ant to  pay  said  money  to  any  other  person  than  himself.  He  availed 
himself  of  the  opportunity  which  the  law  affords  a  person  to  withdraw 
from  the  illegal  contract  before  it  has  been  executed.  He  repented  be- 
fore the  meditated  wrong  was  consummated,  and  twice  demanded  to 
withdraw  his  money,  and  thereby  rescinded  the  contract.  To  allow 
the  plaintiff  to  recover  does  not  aid  or  carry  out  the  corrupt  and  ille- 
gal transaction,  but  the  effect  is  to  put  the  parties  in  the  same  condi- 
tion as  they  were  before  it  was  determined  upon.  By  allowing  the 
party  to  withdraw,  the  contemplated  wrong  is  arrested,  and  not  con- 
summated. This  the  law  encourages,  and  no  obstacle  should  be  thrown 
in  the  way  of  his  repentance.  Hence,  if  the  plaintiff  retreated  before 
the  bet  had  been  decided,  his  money  ought  to  have  been  returned  to 
him ;   and,  in  default  of  this,  he  is  entitled  to  recover. 

There  Avas  no  error,  and  the  judgment  must  be  affirmed. 

68  Until  the  illegal  contract  is  executed  both  parties  are  given  an  opportuni- 
ty for  repentance  and  rescission.  Seeing  the  error  of  his  way,  the  law  ex- 
tends to  him  a  helping  hand  by  aiding  him  to  recover  back  anything  of  value 
with  which  he  may  have  parted.  Wassermann  v.  Sloss,  117  Cal.  425,  49  Pac. 
500,  38  L.  R.  A.  170,  59  Am.  St.  Rep.  209  (1897);  Munns  v.  Donovan  Com.  Co.. 
117  Iowa,  516,  91  N.  W.  789  (1902) ;  Smith  v.  Blachley,  ISS  Pa.  550,  41  AU. 
019,  08  Am.  St.  Rep.  887  (1898).  Neither  party  can  recover  if  it  is  necessary 
for  him  to  set  up  the  illegal  transaction.  If  the  principal  can  make  out  his 
claim  without  setting  it  ui),  the  agent  cannot  defend  on  the  ground  that  the 
property  was  to  be  used  for,  or  was  obtained  from,  an  unlawful  purpose. 
Clarke  &  Co.  v.  Brown,  77  Ga.  006,  4  Am.  St.  Rep.  98  (1886).  On  the  other 
hand  if  the  principal's  right  of  recovery  is  so  wrapped  up  with  the  illegal 
contract  that  he  must  set  it  up  to  make  his  case  he  cannot  succeed.  Mexican 
Int.  Banking  Co.  v.  Lichtenstein,  10  Utah,  338,  37  Pac.  574  (1894). 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  585 

(C)  Jus  Tertii 

HANCOCK  V.  GO^IEZ. 
(Supreme  Court  of  New  York,  1871.     58  Barb.  490.) 

Plaintiff  sent  to  defendants  an  order  for  $176.33l^  on  Sale  &  Co., 
owners  of  the  bark  Reindeer,  for  wages  due  one  Hanson  as  mate  of 
said  bark.  Defendants  collected  the  amount.  Later  a  woman  claim- 
ing to  be  the  widow  of  Hanson,  but  furnishing  no  proofs,  demanded 
the  money,  and  defendants  paid  it  back  to  Sale  &  Co.,  who  paid  it 
to  her.    Verdict  directed  for  defendants. 

Cardozo,  J.  The  money  for  which  this  action  was  brought  was 
collected  by  Gomez,  WalHs  &  Co.,  by  authority  of,  and  as  agents  for, 
the  plaintiff,  and  they  acknowledged  that  they  had  so  collected  it, 
both  by  their  accounts  rendered,  and  by  their  letter  to  the  plaintiff  of 
October  7,  1862.  Having  so  received  the  money,  they  had  no  right 
to  return  it  to  Sale  &  Co.  They  cannot  dispute  the  title  of  the  prin- 
cipal, by  setting  up  an  adverse  title  in  a  stranger.  Murray  v.  Vander- 
bilt,  39'Barb.  140;  Ross  v.  Curtiss,  31  N.  Y.  606." 

The  ruling  below  was  therefore  erroneous,  and  the  judgment 
should  be  reversed  and  a  new  trial  ordered ;  costs  to  abide  the  event. 


MOSS  MERCANTILE  CO.  v.  FIRST  NATIONAL  BANK. 

(Supreme  Court  of  Oregon,  1905.    47  Or.  361,  82  Pac.  8,  2  L.  R.  A.  [N.  S.]  657, 

8  Ann.  Cas.  569). 

Suit  in  equity  to  restrain  the  prosecution  of  an  action  at  law 
brought  by  defendant  against  William  Miller  to  recover  back  money 
collected  by  him  as  attorney  on  a  judQ:ment  in  an  action  by  Helmick 
against  Porter.  Neither  knew  plaintiff  had,  or  claimed,  an  interest 
in  the  judgment.  Helmick  assigned  to  defendant  bank,  which  noti- 
fied Miller  to  collect  and  remit,  less  his  fees  for  collection.  Miller 
collected,  but  while  preparing  to  remit  yielded  to  plaintiff's  demand 
for  the  money,  on  the  supposition  that  the  bank  was  acting  for  plain- 
tiff. Defendant  thereupon  sued  Miller,  and  plaintiff  seeks  to  restrain 
this  suit. 

Br.AN,  J."^*  [After  holding  that  there  was  no  theory  on  which 
plaintiff  could  maintain  this  suit  in  equity:]  *  *  *  Now,  under 
the  facts  as  here  claimed  by  the  defendant,  Miller's  relationship  to 
it  was  that  of  a  mere  agent   or  attorney  to  collect  and  remit  the 

BT  The  agfiit  will  be  prolcftr-d  In  I'.ivin^'  h.-irlc  the  money  If  It  was  paid  to 
him  by  the  third  p»>rsoii  for  the  piincliuil  tlirou;:h  fraud  or  mistake.  Needles 
V.  Fuson,  21  Ky.  Law  Ri-p.  IW.i,  f.s  S.  W.  <il»  (1902). 

»«  Part  of  tlu'  ofiinion  Is  omitted. 


nsiJ 


lOl-'KlX'TS    AM)    t'ONSlXJlKNCKS    OF   THK    KKI-ATION  (Part    li 


amount  due  on  the  IToliuick  juilgiiiont;  and  wliilc  the  general  rule 
is  that  an  aj;eut  who  receives  money  for  his  princi])al  is  estojiped  to 
deny  the  title,  and  must  return  or  account  for  the  money  to  him  for 
whom  he  received  it,  tliis  rule  does  not  prevent  an  aj^ent,  when  sued 
by  his  jn-incipal.  from  showiujL;-  that  he  has  been  divesteckof  the  prop- 
erty by  a  title  paramount  to  that  of  his  ])rincipal,  or  thatjhe  has  paid 
over  the  monev  or  propertv  to  one  hoklino;  such  a  title//  1  Clark  & 
Skyles,  Agency,  §431;  Mechem,  Agency,  §  525;  Pdftc  &  Clark  v. 
Wallace  &  Lewis.  19  Ala.  219;  Peyser  v.  Wilcox,'^  How.  Prac. 
^25;  Sims  v.  llrown,  6  Thomp.  &  C.  5;  s.  c,  affirmed  64  N.  Y.  660. 
The  rule  in  such  case  is  practically  the  same  as  that  governing  the 
relation  of  bailor  and  bailee,  and  surrendering  to  a  paramount  title 
is  a  good  defense.  Western  Transportation  Co.  v.  Barber,  56  N.  Y. 
544;  Burton  v.  Wilkinson,  18  Vt.  186,  46  Am.  Dec.  145. =»  Miller  is 
therefore  not  estopped  by  reason  of  his  relationship  to  the  defendant 
bank  to  set  up  and  prove  in  the  action  brought  by  it  against  him, 
if  he  can,  that  the  money  in  fact  belonged  to  the  plaintiff,  and  that 
he  paid  it  over  on  demand  prior  to  the  commencement  of  such  ac- 
tion. 

The  point  in  controversy  is  whether  the  money  collected  by  him 
belonged  to  the  defendant  or  to  the  plaintiff.  If  it  was  the  property 
of  the  bank,  Miller  is  liable  to  it,  but  if  it  belonged  to  the  plaintiff, 
and  he  paid  it  over  upon  demand,  such  payment  will  be  a  complete 
defense  to  the  law  action.  These  are  questions  properly  triable  at 
law,  and  according  to  the  procedure  applicable  thereto.  We  are  of 
the  opinion,  therefore,  that  there  is  no  ecpiity  in  plaintiff's  proceeding. 

The  decree  is  reversed,  and  the  complaint  dismissed. 

59  The  ajrent  is  in  the  same  position  as  a  l):iilee.  Riddle  v.  Bond,  6  B.  & 
S.  22.'>.  34  L.  J.  Q.  B.  137,  11  Jur.  N.  S.  425,  12  L.  T.  ITS,  13  W'.  R.  561  (18(55). 

After  notice  of  the  claim  of  the  third  peison  it  may  be  culpable  for  the 
agent  to  pay  the  money  to  the  principal.  Hunt  v.  Maniere,  5  N.  R.  181,  34 
Beav.  1.57,  34  L.  J.  Ch.  142,  11  Jur.  X.  S.  28,  73,  11  L.  T.  723,  13  W.  R.  363 
(1S64).  In  such  case  he  should  interplead  his  principal  and  the  third  ])erson 
if  he  can,  or  take  indemnity  from  one  party  and  deliver  to  him  who  indcnnii- 
fies  him.  Sims  v.  Brown.  64  N.  Y.  660  (187(;),  aflirnied  6  Thomp.  &  C.  5  (1875). 
Trover  will  not  lie  because  the  asjent  holds  the  property  in  dispute  until  the 
rights  of  the  claimants  are  determined.  Fletcher  v.  Fletcher,  7  N.  II.  452, 
28  Am.  Dec.  .350  (183.5).  In  Wando  Thosphate  Co.  v.  Parker,  93  Ga.  414,  21 
S.  E.  53  (18031,  it  is  held  that  the  agent  is  not  guilty  of  conversion  if  he  de- 
livers the  property  to  his  principal  promptly,  and  before  suit  is  brought  by 
the  third  person,  even  though  he  had  notice  of  the  third  person's  claim. 


f(vn\ 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  587 


III.  Commingling  of  Funds  or  Property 

ILLINOIS  LIXEX  CO.  v.  HOUGH. 
(Supreme  Court  of  lUiuois,  1878.     91  111.  G.3.) 

Assumpsit  by  Hough,  who  had  been  manager  and  president  of  the 
Linen  Company.  Verdict  for  plaintiff  for  $15,000,  and  defendant  ap- 
peals and  assigns  for  error  the  giving  and  refusing  of  instructions, 
and  that  the  verdict  is  not  supported  by  the  evidence. 

Sheldon,  J.^°  *  *  *  ^^^  defendant  asked  the  following  in- 
struction :  "The  court  instructs  the  jury,  that  if  you  believe,  from 
the  evidence,  that  the  plaintiff,  while  acting  as  president  of  defendant, 
drew  certain  drafts  upon  the  treasurer  of  defendant  for  the  payment 
of  money  to  himself  and  other  persons  therein  named,  and  signed  the 
said  drafts  with  the  word  'president'  appended  to  his  name,  and  upon 
the  face  of  said  drafts,  directed  the  same  to  be  charged  to  the  account 
of  the  defendant,  and  if  you  shall  further  believe,  from  the  evidence, 
that  the  defendant  paid  the  money  on  said  drafts,  then  you  are  in- 
structed, as  a  matter  of  law,  that  the  fact  of  the  plaintiff's  so  signing 
said  drafts,  and  .directing  the  amount  thereof  to  be  charged  to  the 
defendant,  would  not  relieve  him  of  his  responsibility  to  account  to 
the  defendant  for  the  amount  of  money  so  drawn  by  him,  and  the 
burden  of  proof  is  upon  the  plaintiff  to  show  that  he  has  applied  all 
of  said  money  so,  as  aforesaid,  drawn  from  the  treasury  of  the  de- 
fendant, to  the  use  of  the  defendant,  and  if  he  has  failed  to  so  sat- 
isfy you  in  relation  to  any  of  the  said  drafts,  by  a  preponderance  of 
evidence,  then  the  defendant  would  be  entitled  to  recover  therefor 
from  the  said  plaintiff" — which  the  court  refused  to  give,  but  modified 
to  the  effect  that  the  plaintiff  could  only  be  held  to  account  for  such 
money  as  the  evidence  showed  he  had  drawn  for  his  own  use  and 
benefit,  or  such  as  he  had  appro])riated  to  his  own  use,  and  as  thus 
modified  gave  the  instruction — all  which  was  excepted  to. 

There  was  a  set-off  in  the  case,  on  the  part  of  the  defendant,  o£ 
monevs  paid  and  arlvanced,  etc.,  of  a  large  amount.  The  evidence 
shows  that  the  plaintiff  had  authority  to  draw  upon  the  treasurer  of 
the  company  for  nvjucy.  This  he  often  did,  and  all  his  drafts  were 
paid.  Some  of  the  money  so  drawn  was  for  the  use  of  the  conii)any, 
and  some  for  his  own  use.  All  the  drafts,  however,  with  the  excep- 
tion of  one  or  two,  were  signed  "R.  M.  Hough,  President,"  and 
were,  upon  their  face,  directed  to  be  charged  to  the  account  of  the 
Illinois  Linen  Company.  The  treasurer's  office  was  in  Chicago,  and 
the  factory  of  the  company  was  at  Roselle,  some  twenty-eight  miles 
distant.     The  plaintiff's  place  of  business  was  at  the  latter  [)lace,  and 

'■•''  I'jirt    f>f   flu'  f>iiiiii<»ii   Is  omitted. 


588  EFFECTS    AND    CONSKQUKNOKS   OF  TIIK    ItELATION  (Part   3 

the  treasurer,  as  may  be  supposed,  could  know  nothing  of  the  in- 
tended use  of  these  drafts,  except  as  appeared  upon  their  face. 
Thoui;h  the  assertion  is  made  that  upon  the  face  of  many  of  the 
drafts  it  appeared  that  tiiey  were  drawn  expressly  for  the  benefit  of 
the  company,  upon  examination  of  the  portion  of  the  record  referred 
to  in  support  of  the  assertion,  we  find  but  a  single  draft  so  showing. 

There  were  one  hundred  and  sixteen  of  these  drafts  thus  drawn 
upon  the  company,  amounting  to  the  sum  of  $36,736.68.  The  plaintiff 
himself  admits  that  certain  ones  of  them,  amounting  to  $10,520.58, 
were  for  his  own  individual  account,  and  testifies:  "I  kept  no  ac- 
count, record  or  memorandum  of  any  individual  transactions  with 
the  company,  supposing  it  would  be  on  the  company  books." 

There  was  remissness  of  duty  here,  on  the  part  of  the  plaintiff,  in 
his  manner  of  dealing  with  this  large  amount  of  the  company's  mon- 
ey, drawing  it,  as  he  did,  from  the  treasury  of  the  company,  upon 
drafts  with  no  trace  upon  them  to  show  for  whose  use  (his  or  the 
company's)  they  were  drawn,  and  keeping  no  account  or  memoran- 
dum thereof,  but  leaving,  for  whose  use  the  drafts  were  drawn,  to  be 
$hown,  as  best  might  be,  from  memory. 

•j  It  is  ordinarily  the  duty  of  agents  to  keep  regular  accounts  and 
touchers  of  the  business  in  the  course  of  their  agency,  and  if  this  duty 
is  not  faithfully  performed,  the  omission  will  always  be  construed 
unfavorably  to  the  rights  of  the  ag,ent,  and  care  will  be  taken  that  the 
principal  shall  not  suffer  thereby.!  Story  on  Agency,  §  332.  'Tn  1 
Story's  Eq.  Jur.  §  468,  after  observing  upon  the  duty  of  agerits  to 
keep  regular  accounts  and  vouchers,  it  is  remarked  further:  /'Upon 
similar  grounds,  as  an  agent  is  bound  to  keep  the  propert}!  of  his 
principal  distinct  from  his  own,  if  he  mixes  it  up  with  his  own  the 
whole  will  be  taken,  both  at  law  and  in  equity,  to  be  the  property  of 
the  principal,  until  the  agent  puts  the  subject  matter  under  such  cir- 
cumstances that  it  may  be  distinguished  as  satisfactorily  as  it  might 
have  been  before  the  unauthorized  mixture  on  his  part, — in  other 
words,  the  agent  is  put  to  the  necessity  of  shayving,  clearly,  what  part 
of  the  property  belongs  to  him ;  and  so  far  as  lie  is  unable  to  do  this, 
it  is  treated  as  the  property  of  his  principal."®^ 

Analogous  to  the  mixture  of  property  was  riiis  confusion  of  private 
and  company  uses  of  these  moneys,  admitting,  we  think,  of  the  ap- 
plication against  the  plaintiff  of  a  similar  principle  to  the  above.  The 
drafts  having  been  drawn,  indiscriminately  and  undistinguishably,  for 
private  and  company  uses,  we  think  the  burden  of  distinguishing  be- 
tween them  was  imposed  upon  the  plaintiff.     He  knew  the  purposes 

ei  Yates  v.  Arden,  Fed.  Cas.  No.  18,126,  5  Cranch,  C.  C.  526  (1838).  A 
leading  case  Is  Lupton  v.  White,  15  Ves.  4:^2,  10  R.  R.  94  (1808),  per  Eldon, 
Lord  Cli.  See,  also.  Lord  Cliedwortli  v.  Edwards,  8  Ves.  46,  0  R.  R.  212  (1802), 
and  Clarke  v.  Tiiiiiiug.  9  Beav.  284  (1846).  Every  presumption  will  be  af,'ainst 
sur-li  an  agent,  and  if  he  cannot  render  a  clear  account  showing  which  is  his 
and  which  his  princiijal's  property  or  funds,  he  will  be  denied  his  commission 
for  his  services.     Gray  v.  Ilaig,  20  Beav.  219  (1854). 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL 


589 


tor  which  the  drafts  were  drawn, — whether  for  his  own  or  the  com- 
pany's use.  The  company,  presumably,  did  not  know,  there  being 
nothing  in  the  form  the  drafts  were  drawn  to  give  information. 

We  are  of  opinion  that,  at  least  under  the  facts  of  this  case,  the 
instruction,  as  drawn,  should  have  been  given,  and  that  there  was  er- 
ror in  the  modification  of  it. 

The  error  in  respect  of  instructions  makes  it  unnecessary  to  con- 
sider the  point  as  to  the  verdict  not  being  sustained  by  the  evidence. 

The  judgment  will  be  reversed  and  the  cause  remanded. 


MASSACHUSETTS  LIFE  INS.  CO.  v.  CARPENTER. 

{Superior  Court  of  City  of  New  York,  1870.    32  N.  Y.  Super.  Ct.  734,  affirmed 

49  N.  Y.  668.) 

Action  for  balance  of  account  alleged  to  be  due  from  defendant 
as  agent  of  plaintiff.  Defense,  that  the  moneys  were  embezzled  by 
a  clerk. 

Spencer,  J.  I  have  examined  critically  the  findings  of  fact  and 
law  made  by  the  referee  in  this  case,  and  conclude  they  are  fully  sup- 
ported by  the  evidence,  and  that  the  judgment  in  this  action  should 
be  aflfirmed.  This  fact  clearly  appears  from  the  evidence,  and  does 
not  seem  to  be  contested,  "That  the  defendant  mixed  the  money  and 
funds  of  the  plaintiffs  with  moneys  and  funds  of  his  own  and  of 
third  parties,  at  the  office  and  the  bank,  and  that  the  money  em- 
bezzled by  the  clerk  was  taken  from  these  moneys  and  funds,  which 
were  so  mixed  and  commingled  that  it  is  impossible  to  determine 
lo  whom  the  money  embezzled  actually  belonged  at  the  time."  This 
i-ction  on  the  part  of  defendant  made  him  Hable  to  account  to  the 
plaintiffs  for  their  moneys  received  by  him,  even  admitting  that  a 
loss  had  occurred.*^ 

By  the  act  of  defendant  the  identity  of  plaintiffs'  moneys  was  lost, 
and  the  loss  should  fall  upon  the  defendant,  as  Story  justly  remarks, 
"as  a  sort  of  penalty"  for  the  agent's  negligence  in  not  keeping  his 
principal's  money  separate  from  his  own  and  that  of  others.  When 
he  chose  to  mingle  these  funds  of  the  plaintiff  with  his  own,  etc., 
he  made  the  same  substantially  his  own,  and  incurred  the  liability 
and  duty  of  answering  to  the  plaintiffs  for  the  full  amount  of  the 
same.  A  loss  of  a  part  of  these  joint  and  mixed  funds  must  be  sus- 
tained wholly  by  the  defendant. 

The  judgment  should  be  affirmed,  with  costs. 

02  The  iiKcnt  (loos  not.  In  Rcnpral,  Insun-  tlio  raonoy  or  property  Intrusted  to 
his  fiire.  Louisville  &  N.  It.  Co.  v.  Budington,  131  Ala,  620,  31  South.  592 
<lJK)li). 


r)J)0  i:ffi:cts  and  co.Nsi:gLi:NCEs  of  tiik  kelation       (Part  U 

y    / 

IMILLER  V.  CLARK. 

(Suiiivnio   Court   of   Ni>\v  York,   IMl.     5  T-aiis.  .^SR.) 

Appeal  by  ilclciulant  from  a  iutl^iiR'nl  cntcixd  in  favor  of  plainlifT, 
upon  the  report  of  a  referee,  on  an  action  for  money  liad  and  re- 
ceived by  defemlant  of  the  plaint  iff. 

Johnson,  }/'•'  *  *  *  'pi^g  defendant  was  the  plaintiff's  agent, 
and  received  the  money,  and  property  to  be  converted  into  money,  to 
pay,  lay  out  and  expend  in  the  plaintiff's  business.  He  did,  as  all  the 
evidence  shows,  and  as  the  referee  must  have  found  in  substance,  so 
pay,  lay  out  and  expend  nearly,  if  not  quite,  all  the  moneys  he  so 
received. 

An  agent  receiving  the  money  of  his  principal  to  be  used  and  ex- 
pended in  his  principal's  business,  does  not,  by  receiving,  keeping  and 
expending  it.  in  the  manner  contem])lated,  become  the  debtor  of  his 
principal  in  any  legal  sense.  He  is  liable  to  account  for  all  the  funds 
so  received;  but  as  long  as  he  fulfills  and  performs  strictly  his  duties 
and  obligations  to  his  principal  as  agent,  he  is  neither  debtor  to  such 
principal,  nor  liable  to  be  charged  with  interest  for  the  moneys  which 
have  come  to  his  hands  in  that  capacity. 

If  an  agent  mixes  the  money  of  his  principal  with  his  own  and 
makes  use  of  it,  he  is  liable  to  pay  interest  upon  it  from  that  time ; 
or  if  he  uses  it  separately  and  makes  a  profit  upon  it,  or  puts  it  to 
interest  while  in  his  hands,  the  principal  is  entitled  to  such  profit  or 
interest. 

But  as  a  general  proposition,  an  agent  is  not  liable  to  be  charged 
with  interest  upon  moneys  recelyed  and  held  by  him  for  the  use  of 
the  principal.  In  order  to  render  him  liable  for  interest,  some  other 
fact  must  be  shown  in  addition  to  the  mere  receiving  and  retaining 
the  money  in  his  hands.  \Dunlap's  Paley  on  Agency,  49,  50;  Williams 
V.  Storrs,  6  Johns.  Ch.  p2>,  10  Am.  Dec.  340. 

The  question  upon  M'hich  the  right  of  a  principal  to  charge  his 
agent  with  interest  on  the  funds  in  his  hands  depends,  was  not  liti- 
gated before  the  referee,  and  there  is  neither  evidence  nor  finding 
upon  the  subject.  The  charge  of  interest  upon  the  several  amounts 
from  the  time  they  were  received  by  the  defendant  is  without  any 
foundation  of  fact  to  uphold  it,  and  is  an  error  of  law."*  The  ex- 
ception to  such  allowance  is,  therefore,  well  taken.     *     -^     * 

88  Part  of  the  opinion  is  oinittcd. 

6*  The  aj?ent  is  not  chargeable  with  interest  if  he  merely  suffers  the  money 
to  ren)ain  dead  in  liis  hands.  Ito^ers  v.  Boehni.  2  ICsp.  704  (17!)Sj,  per  I.d. 
Kenyon.  He  is  Hiiir^ieahle.  however,  if  he  deposits  his  lirinciijal's  money  in 
lii.s  own  fjencral  hank  account  and  draws  out  and  uses  it.  lilodgett's  Ii^st. 
V.  Converse's  lOst.  00  Vt.  410.  1.5  Atl.  100  (ISSS).  Cf.  Williams  v.  Storrs,  (J 
Johns.  Ch.  .%.'{,  10  Am.  Dec.  .'{40  (1.S22).  per  Kent,  Ch.  And  so  he  is  if  he  l<eeps 
it  against  his  principal's  interest.     Bischoffsheim   v.  Baltzer  (C.  C.)  21  I-'ed. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  HIS  PRINCIPAL  591 

WHITECO^IB  V.  JACOB. 
(Court  of  Chancery,  ITll.  1  Salkeld,  IGO.)  6  5 
If  one  employs  a  factor,  and  entrusts  him  with  the  disposal  of 
merchandize,  and  the  factor  receives  the  money,  and  dies  indebted 
(in)  to  debts  of  a  higher  nature,  and  it  appears  by  evidence  that  this 
money  was  vested  in  other  goods,  and  remains  unpaid,  those  goods 
shall  be  taken  as  part  of  the  merchant's  estate,  and  not  the  factor's ; 
but  if  the  factor  have  the  money,  it  shall  be  looked  upon  as  the  fac- 
tor's estate,  and  must  first  answer  the  debts  of  a  superior  creditor, 
etc.,  for  in  regard  that  money  has  no  earmark,  equity  cannot  follow 
that  in  behalf  of  him  that  employed  the  factor. 


VEIL  &  PETRAY  v.  MITCHELL'S  ADM'RS. 

(Circuit  Court  of  the  United  States,  Third  Circuit,  1821.    4  Y^Tash.  C.  C  105, 

Fed.  Cas.  No.  1(5,908.) 

The  special  verdict  stated,  that  in  the  lifetime  of  Abner  IMitchel,  the 
intestate,  the  plaintiffs  sent  to  him,  for  sale,  two  bills  of  exchange  on 
France,  with  instructions  to  remit  them  the  proceeds.  The  intestate 
sold  the  bills,  and  remitted  to  the  plaintiffs  the  proceeds  of  one  of 
them,  except  $60,  which  he  had  in  bank  notes  of  the  South  Carolina 
banks.  For  the  other  bill  he  took  the  check  of  the  purchaser,  paya- 
ble some  days  after  the  sale.  Before  the  check  came  to  maturity, 
Mitchel  died,  leaving  in  his  possession  the  check,  and  the  South  Car- 
olina notes  amounting  to  $60;  all  of  which  came  to  the  hands  of  the 
defendants,  who  received  payment  of  the  check  when  the  same  be- 
came due.  On  another  account,  the  plaintiff's  were  indebted  to  the 
intestate,  in  a  balance  of  $344.82.  The  intestate  died  insolvent,  and 
the  question  reserved  for  the  opinion  of  the  court  is,  whether  the 
plaintiffs  are  entitled  to  recover  the  amount  of  the  check,  and  the 
notes  for  $60,  after  deducting  what  is  due  to  the  intestate. 

Washington,  Circuit  Justice.    The  cases  upon  this  subject  are  uni- 

531  (1SS4),  and  wlien   ho  has  failfd   for  a   lonp  time  to  account,  or  lias  con-  \ 
tractcd   to  i)ay    iiilcrtsl.      I  laiixhiiisi    v.   Ilovcy,  L!(i   Vt.   ."•  U   (isr)4). 

i<rt-tiff.  Wliilc  the  aj-'ciit  sued  for  an  account iiii,'  has  a  riirht  of  set-off  for 
sums  iustlv  due  him  in  the  agency,  he  may  not  set  off  anteceiU^nt  dehts,  out- 
side tiie  agency.  Ta^;;  v.  I'.owman,  108  I'a.  27:5.  .')(!  Am.  Kep.  204  (ISSfi);  Id., 
IK)  I'M.   :'.■(!   (1882). 

"•'•Accord:  Scott  v.  Snrman,  WiJIes,  400  (1742).  Hut  money  deposited  in 
hank  in  the  name  of  "W.  iV  Co.,  .V;,'t.."  can  he  followed  and  recovered.  Its 
identity  Is  not  lost.  I'.aker  v.  N.  V.  Nat.  I'.ank.  KM)  N.  Y.  .-{l.  2  N.  K.  4r)2.  10 
Ahh.  .\.  C.  4r..s.  -,:',  Am.  Kep.  1."()  (issr,);  Id.  Ki  Ahh.  N.  C.  ir.S  (ISS.",).  It  is 
not  necessary  to  tra<-e  the  identical  coin  or  hills.  IVarce  v.  Dill,  14!>  Ind.  l."'.ti. 
4.S  N.  E.  7SS  tlS!t7l.  Cf.  with  the  alxtve  Kahnestock  v.  Hailey.  CO  Ky.  (."! 
Mete.)  4S,  77  \\i\.  Dec.  ICl  (lS(!Oi,  in  wliieh  the  iirojierty  of  the  principal  was 
liona  fide  sold  and  the  money  i)aid  out  hel'ore  notice  cd'  the  principals  claim, 
and  Mobile  &  M.  U.v.  Co.  v.  iM-lratli.  (i7  Ala.  IS!)  HSSOi,  itointini;  r)ut  tliat 
money  has  no  ••arniarks.  See  the  discrindnatln),'  discussion  in  Ueatty  v.  M<- 
Cleod",  11    La.   Ann.   7*;  fis.-,r,i. 


592  KFFECTS   AND   CONSEQrENCKS   OF   TllK    UFJ-AllON  (i'uit  o 

form,  in  laying  down  the  rule,  that  where  the  princijial  can  trace  his 
property  into  tiie  liands  of  his  agent  or  factor,  whellier  it  be  the  iden- 
tical article  which  first  came  to  the  hands  of  the  factor,  or  other 
property  purchased  for  the  principal  by  the  factor  with  the  proceeds; 
he  may  follow  it,  either  into  the  hands  of  the  factor,  or  of  his  legal 
representatives,  or  of  his  assigns  if  he  should  become  insolvent  or 
a  bankrupt.""  The  factor  is  a  trustee  for  the  principal,  so  long  as 
he  retains  the  property,  or  its  representative  in  his  hands ;  and  his 
assignees,  or  legal  representatives  take  it,  subject  to  the  same  trust, 
which  they  cannot  defeat  by  turning  it  into  money;  unless  indeed, 
they  should  pay  it  away  in  their  representative  character,  before  no- 
tice of  the  claim.  It  is  in  this  point  of  view  only,  that  notice  is  neces- 
sary.    Judgment  for  plaintiffs. 


CARTMELL  v.  ALLARD. 

(Court  of  Appeals  of  Kentucky,  1S71.    70  Ky.  [7  Bush]  482.) 

Hardin,  J.  The  appellee  brought  this  action  to  recover  of  the 
appellants  $1,215.83,  for  money  received  to  the  plaintifif's  use,  as  the 
proceeds  of  the  sales  of  one  hundred  barrels  of  flour  consigned  by 
the  plaintiff  at  Paducah,  Kentucky,  to  the  defendants,  in  two  parcels 
of  fifty  barrels  each,  and  received  by  them  for  sale  as  commission 
merchants  at  Memphis,  Tennessee;  the  first  consignment  being  re- 
ceived January  17,  1868,  and  the  last  January  29,  1868,  and  both 
parcels  sold,  yielding  together  the  amount  claimed  in  the  petition. 
It  appears  that  the  proceeds  of  sales  of  the  flour  as  received  were 
deposited  by  the  defendants  to  their  own  credit  in  the  Gayoso  Sav- 
ings Institution,  a  bank  of  recognized  responsibility  in  Memphis ; 
and  on  the  23d  of  January,  1868,  they  received  from  that  bank,  in 
payment  of  their  own  check  on  their  deposits,  a  draft  of  the  bank 
for  $580.25  on  the  banking  firm  of  Duncan,  Sherman  &  Co.,  of  New 
York;  and  on  the  4th  of  February,  1868,  they  in  like  manner  ob- 
tained the  draft  of  the  bank  on  Duncan,  Sherman  &  Co.  for  $635.57. 
These  drafts  were  both  made  payable  to  the  plaintiff's  order,  and  duly 
transmitted  to  and  received  by  him;  and  it  appears  that  on  receipt 
of  the  first  draft  the  plaintiff  forwarded  it  to  New  York  for  present- 
ment and  payment,  but  that  it  was  duly  protested  for  nonpayment 
on  the  5th  of  February,  1868,  and  returned  to  and  received  by  the 
plaintiff  at  Paducah  on  the  day  of  his  receipt  of  the  second  draft ; 
and  therefore  both  drafts  were  remitted  by  him  to  the  defendants, 

66  All  that  is  required  is  that  the  property  or  money  shall  have  some  ear- 
mark or  other  appropriate  identity.  Whitley  v.  Foy,  59  N.  C.  34,  78  Am.  Dec. 
230  (1800);  Baker  v.  N.  Y.  Nat.  Bank,  100  N.  Y.  31,  2  N.  E.  452,  16  Abb.  N.  C. 
458,  53  Am.  Rep.  150  (1885) ;  Thompson  v.  Perkins,  Fed.  Cas.  No,  13,972,  3 
Mason,  2.32   (1823),  per   Story,  J. 

A  third  person  bona  fide  taking  property  from  the  agent  can  get  no  better 
title  than  the  agent  had  or  was  authorized  to  transfer.  Stevenson  v.  Kyle, 
42  W.  Va.  229,  24  S.  E.  88G,  57  Am.  St.  Rep.  854  (1890). 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  HIS  PRINCIPAL  593 

with  notice  that  he  would  look  to  them  for  payment  of  the  proceeds 
of  the  flour. 

Admitting  the  receipt  and  sales  of  the  flour,  the  defendants  by 
their  answer  relied  on  their  transmission  to  the  plaintiff  of  said  drafts 
of  the  Gayoso  Saving  Institution  as  a  performance  of  their  under- 
taking as  factors,  and  a  bar  to  the  action. 

A  trial  of  the  cause  by  the  court  resulted  in  a  judgment  for  the 
plaintifif  for  $1,215.83,  from  which  this  appeal  is  prosecuted. 

The  only  material  question  to  be  determined  is,  whether,  conced- 
ing the  right  of  the  appellants  to  remit  the  proceeds  of  the  sales  as 
received  to  the  appellee  by  bank  exchange  according  to  what  ap- 
pears to  have  been  the  custom  of  commission  merchants  at  Mem- 
phis, the  act  of  depositing  the  money  in  the  bank  to  their  own  credit, 
thus  placing  it  beyond  the  control  of  the  appellee,  and  creating  a 
liability  therefor  of  the  bank  to  themselves,  did  not  change  the  char- 
acter of  their  responsibility  to  the  appellee,  from  that  which  the  law 
devolved  on  them  as  agents  to  that  of  his  debtors  for  the  funds  so 
deposited. 

It  appears  from  the  evidence  the  appellants  deposited  the  money 
in  the  bank  as  their  own,  and  it  was  placed  to  their  general  credit 
with  the  bank  with  other  money  previously  deposited  and  subject  to 
their  drafts ;  and  it  is  neither  alleged  nor  proved  that  this  disposition 
of  the  proceeds  of  the  appellee's  property  was  authorized  by  the 
terms  of  the  appellants'  agency,  or  any  special  direction  of  their 
principal.  It  is  a  general  rule  that  if  a  trustee  or  agent  makes  an 
unauthorized  investment  or  deposit  of  funds  in  his  hands  as  such 
together  with  his  own  money  in  a  common  account  with  a  banker, 
such  a  disposition  will  be  treated  as  a  conversion  of  the  funds,  and 
devolves  on  him  any  loss  which  may  be  sustained  by  the  banker's 
insolvency  (Story's  Equity  Jurisprudence,  §  1270;  Story  on  Agency, 
208)  ;®^  and  no  suf^cient  reason  is  shown  in  this  case  for  exempting 
it  from  the  operation  of  this  rule. 

Nor  did  the  acceptance  of  the  first  draft  sent  to  the  appellee  on 
Duncan,  Sherman  &  Co.,  which  was  protested  and  returned,  without 
laches  on  the  part  of  the  appellee,  extinguish  the  pre-existing  liabil- 
ity of  the  appellants.  Magcr  v.  Boswell,  4  J.  J.  Marsh.  62;  Story  on 
Bills  of  Exchange,  §  109. 

The  second  draft  remitted  to  the  appellee,  not  having  been  accept- 
ed, was  properly  returner!  by  him  with  the  previous  one,  v/hich  had 
proved  fruitless  as  a  pa\  nicnt. 

Wherefore  the  judgment  is  affirmed. 

07  To  innkc  tho  i»riiifiiiiil  linlilc  for  Icisscs  on  bank  failures  tlio  npont  nnist 
df'I)o.slt  tlic  iiiiiiK'.v  of  liis  iiiiiiri|ial  in  a  separatt'  acrotnit.  Wchslcr  v.  ricrcc, 
.".."i  III.  l.^s  (1S(;1).  If  an  a;.'i'iit  lias  fun<ls  for  several  prineipals  the  safer 
mode  Is  to  ojten  a  Hejiarafe  account  for  each  one.  I?ank  of  Northern  Liber- 
ties V.  Jones.  4'J  I'a.  r,:u',  (lS(5ii). 

floDD.rit.iV  .\. .'iS 


594        EFFKCTS  AND  CONSKQUKNCES  OF  THE  RELATION    (Part  3 


IV.  "MODK  or  "Rl-MlTTAKCi; 

\\  ARWICKI-:  V.  NOAKES."« 
(Court  of  Kiiis's  lU-m-li  ;it  Nisi  I'lius,  1701.     1  IVako,  9S,  3  R.  R.  G53.) 

Assumpsit  lor  goods  sold  and  delivered,  and  money  had  and  re- 
ceiveil. 

The  plaintiff  was  a  hop  merchant,  and  the  defendant  his  customer, 
living  at  Shcrbourne  in  Dorsetshire.  The  plaintiff  sold  him  hops, 
and  also  sold  hops  to  several  other  persons  in  that  neighbourhood ; 
and  requested  the  defendant  (as  his  friend)  to  receive  the  money  due 
to  him  from  his  other  customers,  and  remit  him  by  the  post  a  bill 
for  those  sums,  and  also  the  money  due  to  him  from  the  defendant 
himself.  A  bill  was  accordingly  remitted,  but  the  letter  got  into  bad 
hands,  and  the  bill  was  received  by  some  third  person  at  the  banker's 
on  whom  it  was  drawn. 

Lord  Kenyon.  Had  no  directions  been  given  about  the  mode  of 
remittance,  still  this  being  done  in  the  usual  way  of  transacting  busi- 
ness of  this  nature,  I  should  have  held  the  defendant  clearly  dis- 
charged from  the  money  he  had  received  as  agent.  It  was  so  de- 
termined in  the  Court  of  Chancery  forty  years  since:  and  as  the 
plaintiff  in  this  case  directed  the  defendant  to  remit  the  whole  money 
in  this  way,  it  was  remitted  at  the  peril  of  the  plaintiff. 

The  plaintiff  was  nonsuited. 


V.  Form  of  Liability 

MOORE  v.  McKIBBIN. 
(Supreme  Court  of  New  York,  ISGO.     33  Barb.  246.) 

Action  for  the  conversion  of  horses  belonging  to  plaintiff  and  sold 
by  defendant.    From  judgment  of  non-suit  plaintiff  appeals. 

JoHxsoN,  J.*''^  The  defendant,  as  appears  from  the  evidence,  had 
authority  to  sell  the  horses,  but  not  at  the  price.  He  was  to  sell  for 
not  less  than  $500,  and  actually  sold  them  for  $200. 

The  case  of  Sarjeant  v.  Blunt,  16  Johns.  74,  is  directly  upon  the 
point  that  an  action  for  the  conversion  of  the  property  will  not  lie 
against  an  agent,  for  selling  under  the  price  fixed.  The  same  rule  is 
laid  down  in  Cairnes  &  Lord  v.  Bleecker,  12  Johns.  300,  though  the 
point  was  not  there  decided.     See,  also,   McMorris  v.  Simpson,  21 

«8  Accord:  Kerr  v.  Cotton,  23  Tex.  411  (1S59).  In  the  absence  of  instruc- 
tions as  to  the  mode  of  remittance  the  aj?ent  may  properly  conform  to  the 
usaf?e  in  such  cases.     Potter  v.  Morland,  57  Mass.  (3  Cush.)  384  (1853). 

';■'  Part  of  the  opinion  is  omitted. 


Ch.  1)  DL'TIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  595 

Wend.  610.  This  must  be  so  upon  principle,  or  else  the  purchaser 
would  get  no  title.  Xo  one,  I  apprehend,  would  pretend  that  the  pur- 
chaser did  not  get  a  good  title,  because  the  agent  having  power  to  sell, 
sold  for  a  price  something  less  than  he  was  instructed  to  sell  at.  If  the 
purchaser  gets  a  good  title,  it  must  be  upon  the  ground  that  the  agent 
had  the  right  to  sell.  If  he  could  sell  and  transfer  a  valid  title,  the  sale 
could  not  be  tortious.  The  wrong  in  such  a  case  consists,  not  in  the 
act  of  selling,  which  is  authorized,  but  in  the  breach  of  duty,  in  selling 
at  the  reduced  and  unauthorized  price.  It  is  not  the  want  of  authority, 
but  the  exercise  of  it  contrary  to  the  measure  prescribed,  which  con- 
stitutes the  wrong.  The  nonsuit  at  the  circuit  was  therefore  properly 
ordered ;  and  a  new  trial  must  be  denied.     *     *     * 

B ARTELS  V.  KIXXIXGER.      ' 

(Supreme  Court  of  Missouri,  1S98.  144  Mo.  370,  46  S.  "W.  163.) 
Burgess,  J.^°  This  is  a  proceeding  in  equity  by  the  plaintiff 
against  John  E.  Kinninger  and  Alvina  Kinninger,  his  wife,  and  A.  G. 
Landgraf,  to  have  set  aside  certain  conveyances  made  by  John  E. 
Kinninger  to  them,  and  to  subject  the  property  described  in  the  peti- 
tion to  sale  under  execution  under  a  judgment  held  by  plaintiff  against 
John  E.  Kinninger.  The  property  conveyed  to  the  defendants  Alvina 
Kinninger  and  Landgraf  were  separate  and  distinct  tracts;  the  tract 
conveyed  to  Alvina  Kinninger  being  the  homestead  of  John  E.  Kin- 
ninger. The  trial  in  the  court  below  resulted  in  a  judgment  and  decree 
in  favor  of  plaintiff,  and  against  John  E.  Kinninger  and  Alvina  Kin- 
ninger, setting  aside  the  deed  from  John  to  her,  and  in  favor  of  Land- 
graf. John  E.  Kinninger  and  Alvina  Kinninger  appealed.  No  appeal 
was  taken  from  the  juflgment  in  favor  of  Landgraf. 

John  E.  Kinninger  acquired  the  property  involved  in  tliis  appeal  by 
deed  from  Aaron  Abernathy  and  wife,  on  March  17,  1890,  and  filed 
the  deed  for  record  in  the  recorder's  office  of  the  county  in  which  it 
lies,  on  the  6th  day  of  May,  1890.  Kinninger  and  wife  occupied  the 
property  as  their  homestead  from  the  time  of  this  purchase,  and  were 
so  occupying  it  at  the  time  of  the  institution  of  this  suit.  *  *  * 
On  January  1,  1890,  and  for  a  long  time  before  that  time,  John  E.  Kin- 
ninger was  the  agent  of  his  mother,  the  plaintiff,  in  loaning  her  monev 
and  collecting  interest  thereon.  C)n  that  day  he  had  on  hand  the  sum 
oi  $2, .^33,  which  he  rcceivcfl  from  her  former  agent,  T.  B.  Whitledge. 
He  continued  to  be  his  mother's  agent  until  September  2,  1893,  when 
they  had  a  settlement ;  and  plaintiff  ascertained  that  he  had  used  of 
her  money  the  simi  of  $1,340  or  $1,342,  and,  being  unable  to  pay  the 
same,  he  executed  to  her  his  note  for  that  sum,  upon  which  judgment 
was  rendered  in  her  favor  for  the  smn  of  $1,413.57,  in  the  circuit  court 

Tor.'irt  of  tin-  ri|.liii(iii  Is  omitted. 


;"0G  EFFKOTS    AND    CONSIXJI'KNCKS   OF   Til  10    KBLATION  (Part   3 

of  Cape  Girartlcau  county,  at  the  May  term,  1894.  Execution  was  is- 
sued on  this  judgment  July  21,  1894,  which  was  returned  unsatisfied, 
no  property  being  found  wliereon  to  levy  the  same. 

Defendants  contend  tliat  the  i)etition  does  not  state  facts  sufficient  to 
authorize  the  intervention  of  a  court  of  e(iuity,  for  the  reason  that  it  dis- 
closes upon  its  face  that  at  the  time  that  John  E.  Kinninger  acquired 
the  property  in  question,  and  occupied  it  as  his  homestead,  he  was  not 
indebted  to  plaintiff  in  any  sum  of  money  whatever,  but,  on  the  other 
liand,  he  was  her  agent,  and  that  that  relationship  continued  to  exist 
until  this  settlement,  on  September  2,  1893,  when  it  was  dissolved; 
that  the  relationship  of  principal  and  agent  and  of  debtor  and  creditor 
cannot  exist  at  the  same  time  between  the  same  parties,  and  iS  to  the 
same  subject-matter;  and,  as  the  deed  from  Abernathy  to  John  E.  for 
the  homestead  was  recorded  in  the  recorder's  office  of  the  proper 
county  long  before  that  time,  that  the  homestead  is  not  subject  to  levy 
and  sale  under  execution  for  the  payment  of  that  debt.     *     *     * 

If  John  E.  Kinninger  acquired  the  property  in  question  for  a  home- 
stead, was  occupying  it  as  such,  and  had  placed  his  deed  thereto  upon 
record,  before  the  debt  was  contracted  or  the  cause  of  action  accrued 
upon  which  the  judgment  was  rendered  in  favor  of  plaintiff  against 
him,  it  was  not  subject  to  execution  issued  under  that  judgment ;  and, 
if  exempt  from  execution,  no  fraud  was  perpetrated  upon  plaintiff  by 
reason  of  the  conveyance  of  it  by  him  to  his  wife,  Alvina,  although  the 
deed  was  without  consideration.  Davis  v.  Land,  88  Mo.  436.  "Cred- 
itors have  no  interest  in  such  property,  as  it  cannot  be  subjected  to  the 
payment  of  their  debts  by  proceeding  in  equity  any  more  than  it  can  be 
seized  under  attachment  or  execution."  Bank  v.  Guthrey,  127  Mo. 
189,  29  S.  W.  1004,  48  Am.  St.  Rep.  621 ;  Kendall  v.  Powers,  96  Mo. 
142,  8  S.  W.  793,  9  Am.  St.  Rep.  326;  Holland  v.  Kreider,  86  Mo. 
59.  But,  if  subject  to  execution,  the  deed  from  Kinninger  to  his  wife 
is  fraudulent  and  void  as  against  this  plaintiff,  because  without  con- 
sideration, and  merely  a  voluntary  conveyance.  The  question,  then,  is 
as  to  what  time  plaintiff's  cause  of  action  or  the  debt  upon  which  the 
judgment  was  rendered  accrued, — whether  before  or  after  the  acquisi- 
tion of  the  homestead.  As  a  general  rule,  when  money  is  placed  in 
the  hands  of  an  agent  to  loan  for  a  principal,  the  act  of  the  agent  in 
handling  the  money  is  the  act  of  the  principal,  and,  as  to  such  money, 
the  relation  of  debtor  cannot  exist,  and  only  commences  on  the  termi- 
nation of  the  agency;  but  where  the  agent  violates  his  instructions, 
as  in  this  case,  which  were  to  loan  the  money  on  real  estate,  and,  in- 
stead of  so  domg.  converts  it  to  his  own  use,  a  different  rule  prevails, 
and  his  principal  may  at  once  sue  and  recover  it  from  him  without  de- 
mand. In  Farrand  v.  Hurlbut,  7  Minn.  477  (Gil.  383),  the  plaintiff 
placed  a  sum  of  money  in  the  hands  of  the  defendant,  to  be  loaned  or 
invested  by  him  in  her  name.  He  loaned  it  in  his  own  name,  and  for 
his  own  use  and  benefit;  and  it  was  held  that  such  act  amounted  to  a 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL 


597 


conversion,  and  the  plaintiff  could  maintain  action  for  the  money  and 
damages  from  the  time  of  the  conversion,  without  any  demand.  In 
Mechem,  Ag.  §  477,  it  is  said:  "The  result  of  the  authorities  may 
be  said  to  be  that,  if  the  agent  parts  with  the  property  in  any  way  or 
for  any  purpose  not  authorized,  he  is  liable  for  a  conversion." 

The  evidence  showed  that  John  E.  Kinninger  had  converted  a  part 
of  the  money  intrusted  to  him  by  his  mother,  to  be  loaned  out  for  her 
upon  real-estate  security,  to  his  own  use,  prior  to  the  8th  day  of  Jan- 
uary, 1890,  the  time  that  his  deed  to  his  homestead  was  recorded. 
Upon  such  conversion  a  cause  of  action  at  once  accrued  to  plaintiff 
against  him  therefor,^  ^  and  existed  at  the  time  of  the  acquisition  of 
such  homestead.  Moreover,  Kinninger  tacitly  admitted,  by  charging 
himself  in  the  settlement  between  himself  and  his  mother  with  interest 
amounting  to  $178  from  January  1,  1890,  to  January  1,  1891,  that  he 
had  converted  about  all  of  the  money  to  his  own  use  before  the  8th 
day  of  January,  1890.  The  property  is  therefore  not  exempt  from 
execution  which  may  be  issued  on  said  judgment.     *     *     * 


VI.  Necessity  of  Notice  and  Demand 
BEDELL  V.  JANNEY. 

(Supreme  Court  of  Illinois,  1847.    9  111.  193.) 
Suit  by  defendant  in  error  for  money  collected  for  him  by  plaintiff 
in  error,  and  not  paid  over. 

Thomas,  J."  *  *  *  The  plaintiffs'  allegations  were,  that  they 
had  placed  a  demand  due  them  in  the  hands  of  the  defendant  for  collec- 
tion ;  and  that  he  had  received  the  money  on  that  demand,  and  ap- 
propriated it  to  his  own  use.  The  testimony  corresponded  with,  and 
fully  sustained  these  allegations. 

It  consisted  of  the  defendant's  admissions  in  writing,  of  his  recep- 
tion of  the  plaintiffs'  demand  for  collection ;  of  his  receipt  of  money 
shown  by  parol  evidence  to  have  been  collected  thereon ;  and  of  a 
transcript  from  a  justice's  docket,  showing  the  institution  of  a  suit  be- 
fore such  justice  on  said  demand,  and  the  proceedings  thereon,  to  their 
termination  in  the  execution  on  which  the  money  was  eventually  col- 
lected, and  paid  over  to  defendant,  and  oral  testimony  explanatory  of 
the  documentary.     It  was,  consequently,  properly  adjudged  admissible, 

7  1  The  i)riii<-iiml  has  his  election  to  sue  on  tlie  agency  contract  or  for  con- 
version, hut  lie  cannot  liave  the  benellt  of  both  in  the  same  action.  Nichols 
V.  Gmii\   10  Or.  82  (1881). 

Men-  fiiilure  of  the  a^ent  to  account  for  money  collected  for  the  principal 
Is  not  conversion,  unless  it  was  his  duty  to  hand  over  the  identical  mmicy 
collfcted.  Schanz  v.  Martin.  '.',7  Misc.  Kcp.  41)2.  75  N.  Y.  Supp.  91)7  (l!t(>2). 
The  at'cnt  is  not,  in  Koneral,  rc<i"''<'d  to  hand  over  the  specific  proceeds.  Wal- 
ter V.  I'.fnnett,  10  N.  Y.  2.^0  (IS.'mI. 

7  2  Part  of  the  opinion  is  oniKtcfl. 


r 


oDS  EFKIX'TS    AM)    CO.NSKQl  KNCKS    OF   TUi:    ItKI.A  TION  (Patt    3 

both  upon  the  grounds  of  its  relevancy  and  its  competency.  It  proved 
everything  alleged  by  the  iilaintiffs.  and  was  therefore  properly  held 
suftieient  to  entitle  them  to  a  recovery. 

Xor  is  this  result  varied  by  the  fact  that  the  coninKMieenienl  of  the 
plaintiffs'  suit  was  not  preced'eil  by  a  demand  of  payment  from  the  de- 
fendant.*^ The  doctrine  contained  in  the  instructions  of  the  Circuit 
Court  on  this  point  is  undoubtedly  correct.  A  person  is  entitled  to 
money  collected  for  him  by  another  so  soon  as  received  by  the  latter, 
and  good  faith  on  the  part  of  the  collector  demands  its  immediate  pay- 
ment by  him;  but  nevertheless,  he  is  ordinarily  not  stibjected  to  suit 
for  his  failure  or  omission  to  make  such  payment,  until  after  demand 
therefor  has  been  made  of  him.    Tinkham  v.  Heyworth,  31  111.  519. 

As  a  general  rule  in  such  cases,  it  may  be  presumed  that  payment 
has  been  delayed  by  reason  of  the  want  of  safe  and  convenient  means 
of  transmission,  or  of  some  other  good  and  sutificient  cause,  and  that 
the  recipient  of  the  money,  still  considering  himself  as  entitled  to  no 
more  than  enough  reasonably  to  compensate  him  for  his  services  in 
collecting  it,  will  pay  it  over  on  demand.  But,  where  so  long  a  time 
has  elapsed  since  the  collection  of  the  money,  as  to  rebut  any  such 
presumption  in  favor  of  the  collector,  he  may  well  be  considered  as 
having  appropriated  it  to  his  own  use,  and  then,  neither  law  nor  reason 
requires  that  before  he  can  be  sued  for  his  non-feasance,  he  should  be 
requested  to  do  what  his  conduct  sufficiently  indicates  his  determina- 
tion not  to  do. 

The  circumstances  of  the  case  at  bar  establish  for  it  peculiar  claims 
to  exemption  from  the  operation  of  the  general  rule  referred  to,  as 
regulating  the  liabilities  of  collectors.  The  defendant  had  been  so 
long  the  recipient  of  the  plaintiffs'  money  without  accounting  to  them 
for  it,  or  being  called  upon  by  them  to  do  so,  that  when,  at  length, 
they  endeavored  to  collect  it  from  him  by  suit,  he  claimed  that  time 
had  absolved  him  from  his  liability ;  that  the  Statute  of  Limitations 
had  afforded  the  privilege  of  a  repose,  not  to  be  disturbed  by  having 
obtruded  upon  him  this  outlawed  claim  of  his  employers.  The  Court 
might,  therefore,  well  submit  it  to  the  jury  to  say  whether  there  had 
not  been  such  an  apj^ropriation  by  the  defendant  of  the  plaintiffs'  mon- 

73  Demancl  and  roi'usiil  constitutes  evidence  of  conver.sion.  When  tlie  eon- 
version  fan  be  shown  in  some  other  v.ay  no  demand  need  be  made.  Nadinj; 
V.  Howe.  2H  Ind.  Ai>p.  000.  55  N.  E.  10:V2  (1000).  See,  also,  Wik>.v  v.  Logan.  05 
X.  C.  .'5.j8  (18SG),  in  which  it  is  said:  "'A  demand  iirevious  to  bringing?  an  ac- 
tion for  money  collected  l)y  an  anient,  is  to  enable  (he  latter  to  itay  it  over 
witlKMit  incurring  the  cost  of  suit,  for  the  luincipal  nmst  seek  him  and  not 
he  the  principal.  Potter  v.  Sturgcs,  12  N.  C.  70  (1820) ;  Moore  v.  Hyman,  34 
N.  C.  ns  (1851) ;  Hyman  v.  Gray,  40  N.  C.  155  (1850) ;  Kivett  v.  Massey,  03 
N.  C.  240  (1800).  But  a  demand  is  not  required  where  the  agency  is  denied, 
or  a  claim  set  up  exceeding  the  anjount  collected,  or  the  agent's  responsibil- 
ity is  disputed  in  the  answer.  Waddell  v.  Swann,  01  N.  C.  108  (1884),  and 
cases  cited  in  the  opinion." 

The  .situation  of  the  parties  and  of  the  contract  of  agency  may  determine 
whether  demand  before  suit  is  necessary.  Clark  v.  Sloody,  17  Mass.  145 
(1821). 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGEXT  TO  HIS  TRINCIPAL  599 

ey  to  his  own  use  as  to  deprive  him  of  the  right  to  a  demand  of  pay- 
ment before  the  commencement  of  proceedings  against  him  for  its 
legal  coercion.  And  well  might  the  jury  respond  affirmatively  to  that 
proposition,  and  say,  as  by  their  verdict  they  did  say,  that  there  had 
been  so  unreasonable  and  vexatious  a  delay  of  payment,  on  the  part 
of  the  defendant,  as  to  entitle  the  plaintiffs  to  recover  not  only  the 
amount  collected  by  the  defendant  for  their  use  (after  deducting 
therefrom  a  reasonable  compensation  for  his  services),  but  also  interest 
thereon. 

This  view  of  the  subject  is  fully  sustained  by  authority,  so  far  as  the 
right  to  commence  suit  without  a  previous  demand  is  concerned. 
Hawlev  v.  Sage,  15  Conn.  52;  Estes  v.  Stokes,  2  Rich.  133;  Richards 
V.  Killam,  10  Mass.  244;  Graves  v.  Ticknor,  6  N.  H.  541. 

The  right  to  a  recovery  of  interest  in  such  cases  as  the  jury  found 
the  case  at  bar  to  be,  is  expressly  given  by  our  statute.  Rev.  St.  c. 
54,  §  1.  Upon  this  question  of  interest,  see,  also,  the  case  of  Pease  v. 
Barber,  3  Caines,  266.     *     *     *     Affirmed. 


MODERN  WOODMEN  OF  AMERICA  v.  COLMAN. 

(Supreme  Court  of  Nebraska,  190:'..     GS  Neb.  6G0,  94  N.  W.  814.) 

Ames,  C.^*  This  cause  is  resubmitted  after  the  allowance  of  a  mo- 
tion for  rehearing.  A  statement  of  the  facts  will  be  found  in  the 
former  decision,  published  in  64  Neb.  162,  89  N.  W.  641.  The  em- 
ployment in  which  the  deceased  was  engaged  at  the  time  of  his  death 
was  not  prohibited  by  the  contract  of  insurance,  but  it  was  stipulated 
that,  if  he  should  engage  therein,  he  should  forfeit  his  beneficiary  in- 
terest, unless  he  should  file  with  the  head  clerk  of  the  order  a  written 
waiver  of  any  liability  by  it  for  loss  by  death  as  a  direct  result  of 
such  occupation.  He  did  not  file  such  a  document,  but  the  clerk  of 
the  local  camp,  through  an  assistant,  continued  to  collect  the  monthly 
assessments  or  dues,  and  to  remit  them  to  the  head  clerk,  with  full 
knowledge  of  the  circumstances,  for  a  period  of  three  months,  and 
until  the  death  of  the  insured.  Correctly  speaking,  the  question  is 
not  whether  the  association,  by  this  conduct  of  its  agent,  waived  a 
forfeiture,  but  whether  it  waived  the  waiver  required  of  the  in- 
sured.    *     *     * 

The  certificate  held  by  Colman  was  not  void,  but  voidable.  It  was 
optional  with  him  to  continue  it  in  force  by  filing  a  written  waiver, 
and  it  was  optional  with  the  association  so  to  continue  it  without  such 
waiver.  He  was  not  delinquent  of  dues  or  assessments,  or  otherwise 
liable  to  suspension.  The  association  acted  througli  its  agents,  and, 
being  a  corporation,  it  could  not  act  by  other  means.     It  demanded, 

7«  Tart  fif  tli<'  oiiiiiinii  is  omitted. 


GOO        EFFECTS  AND  CONSKQl-KNOKS  OF  THE  RELATION    (Part  3 

received,  ami  retaineil  his  assessments  with  full  knowledtje  of  all  the 
circumstances  until  after  his  death.  It  cannot  be  supposed  that  it 
intended  to  take  and  keep  his  money  without  consideration.  The 
knowledge  of  its  agent,  authorized  to  make  the  collection,  was  the 
knowledge  of  the  company  of  all  the  circumstances  under  which  the 
payments  were  made.  This  is  not  the  same  as  saying  that  the  agent 
waived  the  forfeiture.  It  was  waived  by  the  association  by  taking 
and  retaining  the  money  of  the  insured  with  notice  of  all  the  facts 
within  the  knowledge  of  its  agent.  It  is  the  duty  of  an  agent  to 
comnumicate  to  his  principal  all  the  facts  concerning  the  service  in 
which  he  is  engaged  that  come  to  his  knowdedge  in  the  course  of  his 
employment,  and  this  duty,  in  a  subsequent  action  between  his  prin- 
cipal and  a  third  person,  he  is,  with  exceptions  not  necessary  to  be 
here  noted,  conclusively  presumed  to  have  performed.  This  is  the 
foundation  of  the  doctrine,  necessary  to  the  public  safety,  that  no- 
tice to  ail  agent  is  notice  to  his  principal.  Mechem  on  Agency,  pars. 
719,  720;  Bradley,  J.,  in  Re  Distilled  Spirits,  11  Wall.  367,  20  L. 
Ed.   167."     *     *     * 

It  is  recommended  that  the  former  decision  of  this  court  be  adhered 
to,  and  the  judgment  of  the  district  court  aflirmed. 

DuFFiE,  C,  concurs. 

Per  Curiam.  For  the  reasons  stated  in  the  foregoing  opinion,  it  is 
ordered  that  the  former  decision  of  this  court  be  adhered  to,  and  the 
judgment  of  the  district  court  affirmed. 


CLARK  &  CO.  V.  BANK  OF  WHEELING.'' 

(Supreme  Court  of  Pennsylvania,  1851.    17  Pa.  322.) 

Action  by  Bank  of  Wheeling  against  Clark  &  Co.  for  the  amount 
of  a  bill  of  exchange,  purchased  by  the  latter,  for  the  former  and  lost 
by  reason  of  an  error  of  Clark  &  Co.  in  informing  the  bank  of  the 
party  to  whom  the  bill  was  sent.  On  judgment  for  plaintiff  defend- 
ant brings  error. 

Lewis,  ].''''  It  is  an  agent's  imperative  duty  to  give  his  principal 
timely  notice  of  every  fact  or  circumstance  which  may  make  it  nec- 
essary for  him  to  take  measures  for  his  security.  Paley,  38;  Devall 
V.  Burbridge,  4  Watts  &  S.  306.     And  if,  by  his  neglect  to  do  this, 

75  Accord:  Prinple  v.  Mod.  Woodmen  of  Am.,  70  Neb.  .SS4,  107  N.  W.  756, 
11.3  N.  W.  231  (1900) ;  The  Distilled  Spirits,  11  Wall.  .•}(;7,  20  L.  Kd.  167  (1870); 
post,  p.  783.  For  the  ;i},'ent  to  fail  to  cominui'ictite  the  facts  in  order  to  take 
advantaj^e  for  himself  is  a  fraud  upon  his  principal.  Snell  v.  Goodlander,  90 
Minn.  .533,  97  X.  W.  421  (1903). 

76  Followed  in  Moore  v.  Thompson,  9  Phila.  164,  .30  Leg.  Int.  4  (1873)  In 
which  the  aj^ent  was  held  liable  for  losses  due  to  the  agent's  failure  to  give 
the  principal  notice  of  attachment  proceedings. 

7  7  Part  of  the  opinion  is  omitted. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL  601 

the  principal  has  suffered  a  loss,  he  is  entitled  to  be  indemnified  by 
the  agent.  Brown  v.  Arrott,  6  Watts  &  S.  416.  In  a  case  of  this 
kind  Mr.  Justice  Kennedy  considers  it  just  and  reasonable  that  the 
agent  "should  be  held  responsible  for  any  loss  that  has  happened, 
ivhich  possibly  might  have  been  avoided,  had  he  only  performed  his 
duty  to  the  principal  as  his  agent."  And  where  goods  or  funds  are 
placed  by  the  agent  in  the  hands  of  a  sub-agent,  and  the  former  is 
guilty  of  gross  negligence  (in  withholding  information),  the  same  care- 
ful and  considerate  judge  was  of  opinion  that  it  "would  not  be  going 
too  far  to  hold  that  the  agent,  by  his  conduct,  had  impliedly  agreed 
to  be  answerable  for  any  loss  that  should  arise  from  the  default  of 
his  sub-agent."    Brown  v.  Arrott,  6  Watts  &  S.  421. 

If  these  principles  be  correct  in  the  case  of  an  ordinary  agent  for 
the  sale  of  goods,  their  application  to  an  agency  like  the  one  before 
us  (for  purchasing  and  remitting  drafts  on  Philadelphia  and  New 
York,  on  account  of  a  bank  in  the  interior)  is  demanded  by  the  true 
interests  of  trade,  and  the  urgent  necessities  of  financial  credit.  And 
if  a  measure  of  liability  so  stringent  as  that  just  indicated  be  appro- 
priate, where  there  is  only  a  nonfeasance,,  how  just  and  necessary  is 
its  application  to  an  act  of  positive  malfeasance.  In  the  use  of  that 
term,  as  applicable  to  the  conduct  of  the  defendants,  we  are  far  from 
imputing  to  them  an  intention  to  deceive  or  otherwise  to  wrong  the 
plaintiff.  But  it  was  their  duty  to  give  information  immediately  and 
accurately,,  of  the  destination  of  the  bill  of  exchange  which  had  been 
purchased  with  the  funds  of  the  plaintiff;  and  the  statement  that 
it  had  been  sent  to  E.  W.  Clark  &  Co.  of  Philadelphia  (when  in  fact 
it  had  been  forwarded  to  John  T.  Smith  &  Co.  of  New  York),  was 
such  a  misrepresentation  of  a  material  fact  as  fully  authorized  the 
plaintiff  to  consider  the  funds  still  in  the  hands  of  the  defendants; 
or  in  other  words,  to  hold  them  liable  for  all  loss  occasioned  by  the 
default  of  John  T.  Smith  &  Co.  Until  the  plaintiff  was  advised  of 
the  remittance  of  the  draft  to  Smith  &  Co.,  the  insolvency  and  de- 
fault of  the  latter  stood  at  the  risk  of  the  agent,  whose  gross  neglect 
and  positive  misstatement  of  the  facts  had  deprived  the  bank  of  all 
power  to  protect  its  own  interest.     ♦     *     * 

Judgment  affirmed. 

\ 

TEASLEY  V.  BRADLEY. 

(Suprpmo  Court  of  Georgia,  lliOO.     110  Gu.  497,  ;i5  S.  E.  782.  78  Am.  St.  Rep. 

li:{.) 

Laura  Sadler  sued  her  sister's  husband,  defendant  Teasley,  for  an 
accounting  of  moneys  from  time  to  time  put  in  his  hands  to  be  loaned 
and  rents  collected  from  land  of  the  estate  of  her  father  and  a  deceased 
sister.  She  had  for  44  years  lived  in  defendant's  home,  and  had  worked 
there,  calling   for  no  accounting  until  shortly  before  instituting  this 


liOL*  KFFIXTS    AND    CONSi;Qr  KM'KS    Ol'   TlllO    KIOLATION  (J'art    3 

suit,  which  rcsuUcd  in  a  jiulynicnt  in  her  favor.  A  new  trial  being 
denied,  defendant  sued  out  a  writ  of  error,  but  plaintiff  died  before 
the  case  was  called,  and  her  administrators  were  made  parties  to  the 
suit. 

CoRB,  J.'^^  *  *  *  1  ,\^  ion_<:^  as  a  person  who  is  in  possession 
of  the  property  of  another,  using  the  same  for  the  owner's  benefit,  rec- 
ognizes the  latter's  ownership,  no  lapse  of  time  will  bar  the  owner  from 
asserting  his  title  as  against  the  person  in  possession.  Before  any 
lapse  of  time  will  be  a  bar  to  the  owner,  it  must  appear  that  the  person 
in  possession  has  given  notice,  or  there  must  be  circumstances  shown 
which  would  be  equivalent  to  notice,  to  the  ow^ner  that  the  person  in 
possession  claims  adversely  to  him.  In  such  a  case  the  statute  will 
begin  to  run  from  the  date  of  such  notice.  Until  the  owner  has  such 
notice,  he  has  the  right  to  treat  the  possession  of  the  other  person  as 
his  own.  Keaton  v.  Greenwood,  8  Ga.  97.  This  is  the  principle  at  the 
foundation  of  that  familiar  rule  now  embodied  in  section  3198  of  the 
Civil  Code  that  "subsisting  trusts,  cognizable  only  in  a  court  of  equity, 
are  not  within  the  ordinary  statutes  of  limitation."  Chancellor  Kent,  in 
Kane  v.  Bloodgood,  7  Johns.  Ch.  90,  11  Am.  Dec.  417,  states  the  same 
rule  in  the  following  language :  "The  trusts  intended  by  the  courts  of 
equity  not  to  be  reached  or  affected  by  the  statute  of  limitations  are 
those  technical  and  continuing  trusts  which  are  not  at  all  cognizable  at 
law,  but  fall  within  the  proper,  peculiar,  and  exclusive  jurisdiction  of 
this  court." 

Although  the  rule  just  stated  is  applicable  in  terms  alone  to  cases  of 
technical  trusts  which  are  cognizable  only  in  a  court  of  equity,  the 
principle  upon  which  it  is  founded  is  applicable  in  some  cases  where  a 
technical  trust  had  not  been  created ;  the  principle  being,  as  above 
stated,  that,  as  long  as  one  recognizes  that  property  in  his  possession 
belongs  to  another,  the  latter  has  the  right  to  treat  the  possession  as 
his  own.  The  factor  in  possession  of  funds  belonging  to  his  principal, 
when  there  is  nothing  in  the  contract  or  the  custom  of  the  place  requir- 
ing that  the  funds  should  be  paid  over  at  any  particular  time,  cannot 
set  up  title  to  such  funds  without  notice  to  the  principal  that  he  no  lon- 
ger holds  the  same  for  his  benefit ;  and  the  statute  of  limitations  does 
not  begin  to  run  in  his  favor  until  such  notice,  or  there  are  circum- 
stances equivalent  to  notice,  or  until  there  has  been  a  demand  and  re- 
fusal to  pay,  or  there  has  been  an  account  rendered,  accompanied  by 
an  offer  to  settle.  In  England  a  similar  rule  has  been  applied  in  the 
case  of  bailiffs  and  stewards  who  collected  rents  and  held  the  same  sub- 
ject to  the  order  of  their  principals.  The  rule  was  also  applied  in  cas- 
es of  agents  having  possession  of  the  funds  of  the  principal,  when,  as 
in  the  case  of  factors,  neither  under  the  contract  nor  the  custom  of 
the  trade,  the  money  was  to  be  paid  over  at  any  particular  time.  In 
all  such  cases  the  property  in  the  hands  of  the  factor,  bailiff,  steward, 

78  Part  of  the  opinion  i.s  omitted. 


Ch.  1)  DUTIES  AND  LIABILITIES  OF  AGENT  TO  HIS  PRINCIPAL 


G03 


'^ 


or  agent,  as  the  case  might  be,  is  treated  as  the  property  of  the  princi- 
pal, and  the  possession  of  the  agent  is  the  possession  of  the  principal ; 
and  no  right  of  action  accrues  in  favor  of  the  principal  until  a  demand 
and  refusal,  or  a  notice,  or  what  is  equivalent  thereto,  that  the  agent 
is  holding  adversely ;  and  not  until  the  right  of  action  accrues  does  the 
statute  of  limitations  begin  to  run  in  favor  of  the  agent.  This  rule  is 
in  some  cases  subject  to  the  exception  that  after  the  lapse  of  a  reason- 
able time  a  demand  will  be  presumed,  and  the  statute  of  limitations 
will  begin  to  run  from  the  time  such  demand  would  be  presumed  to 
have  been  made.  See,  in  this  connection,  1  Wood,  Lim.  Act.  (2d  Ed.) 
§  123;  2  Perry,  Trusts  (5th  Ed.)  §  863;  i\Iechem,  Ag.  §  533;  Oliver 
v.  Hammond,  85  Ga.  323,  331,  11  S.  E.  655;  Patterson  v.  Blanchard, 
98  Ga.  518.  25  S.  E.  572;  27  Am.  &  Eng.  Enc.  Law  (1st  Ed.)  p.  100 
et  seq.;  Blount  v.  Beall,  95  Ga.  182,  22  S.  E.  52.  Where  one  receives 
money  from  another  from  time  to  time,  to  invest,  and  collect  the  prin- 

^tipahor  interest,  and  reinvest  the  same  from  time  to  time  for  the  ben-  j 

efit  of  another,  and  it  is  contemplated  by  the  agreement  betAveen  the  ^^ 

parties  that  the  person  receiving  the  money  shall  use  the  same  for  the  ^ 

beneH  of  the  otTier,  and  there  is  no  time  specified  when  the  money  is 

~B  "bereTurned,  such  person  would  hold  the  same  subject  to  the  de- 
mancf  of  the  other,  and  no  limitation  would  run  against  the  person 
owning  the  fund  in  favor  of  the  one  who  had  collected  it  until  there  ^    ^ 

had  been  a  demand  and  refusal,  or  there  had  been  such  a  lapse  of  time 
as  thejaw  would  presume  a  demand  and  refusal,  or  until  an  account 
had  been  rendered  accompanied  by  an  offer  to  settle,  or  the  one  in  pos- 
session notified  the  owner  that  he  no  longer  held  it  as  the  owner's  but 
claimed  title  to  it  himself. 

Applying  this  rule  to  the  allegations  of  the  present  petition,  there 
was  no  error  in  overruling  the  demurrer,  so  far  as  it  raised  the  point 
that  the  plaintiff's  cause  of  action  was  barred  by  the  statute  of  limita- 
tions, and  that  the  demand  of  the  plaintiff  had  become  stale.  The 
amendment  to  the  petition  merely  amplified  the  allegations  in  the  orig- 
inal petition,  and  was.  therefore,  not  subject  to  the  objection  raised  in 
the  demurrer  thereto  that  it  set  forth  a  new  and  distinct  cause  of  ac- 
tion. The  relation  existing  between  plaintiff  and  defendant  was  not 
such  that  a  technical,  subsisting  trust  cognizable  only  in  a  court  of 
equity  would  result  therefrom,  and  for  this  reason  the  provisions  of 
the  Code  (Civ.  Code,  §§  3149,  3153)  requiring  express  trusts  to  be  de- 
clared in  writing,  and  prohibiting  the  creation  of  such  a  trust  in  favor 
of  a  person  sui  juris  who  is  laboring  under  no  disability,  have  no  ap- 
plication in  the  present  case.  While  such  a  trust  was  not  created,  and 
not  intended  to  be  created,  between  the  parties,  the  same  principles 
which  arc  at  the  foundation  of  the  rule  which  i)rcvents  a  trustee  in  a 
technical  trust  from  pleading  the  statute  of  limitations  against  the  claim 
of  the  cestui  que  trust  would  prevent  an  agent,  of  the  character  that 
the  allegations  in  the  i)clilion  make  the  defendant,  from  relying  upon 


/ 


(iOl        EFFECTS  AND  CONSEQUENCES  OF  THE  KELATION    (Part  3 

tlie  statute  of  limitations  as  a  defense  until  there  IkuI  been  an  aeeount 
rendered,  aceompanied  by  an  olTer  to  settle,  a  refusal,  upon  demand,  to 
settle,  an  express  repudiation  of  the  ageney,  or  such  a  change  in  the 
relation  between  the  parties  as  would  be  sufficient  to  put  the  principal 
on  notice  that  the  agency  was  no  longer  recognized.  As  an  instance 
in  which  this  rule  was  applied,  where  no  express  trust  existed,  see 
Oliver  V.  Hammond,  supra.  Until  one  or  the  other  of  these  contingen- 
cies happened,  the  possession  of  the  defendant  was  the  possession  of 
the  plaintiff,  and  no  limitation  of  time  would  operate  to  debar  the  latter 
from  calling  the  former  to  account,  with  the  single  exception  that,  if 
the  nature  of  the  transactions  was  such  that  after  the  lapse  of  a  rea- 
sonable time  the  law  would  presume  a  demand  and  refusal,  then  the 
statute  would  begin  to  run  from  the  date  such  demand  would  be  pre- 
sumed. If  the  relation  which  the  defendant  bore  to  the  plaintiff  was 
that  of  a  confidential  continuing  agent,  no  such  presumption  would 
arise  until  such  relation  ceased.  The  evidence  introduced  in  behalf  of 
the  plaintiff  tended  to  establish  the  allegations  in  the  petition  as  to  the 
character  of  the  agency  under  which  the  defendant  managed  and  con- 
trolled the  funds  of  plaintiff,  and,  such  evidence,  as  a  whole,  being 
sutificient  to  authorize  a  recovery  by  the  plaintiff  of  at  least  a  portion 
of  the  amount  claimed  by  her,  there  was  no  error  in  overruling  a  mo- 
tion for  a  nonsuit.  Certain  portions  of  the  charge,  made  the  subject  of 
assignments  of  error  in  the  motion  for  a  new  trial,  were  substantially 
in  accord  with  what  is  now  ruled,  and  were,  therefore,  not  erroneous. 
2.  The  defendant  contended  that,  if  he  occupied  the  relation  of 
agent  at  all  to  the  plaintiff,  he  was  simply  her  agent  to  collect  h(T  mon- 
ey, and  that  in  such  a  case  the  statute  of  limitations  would  begin  to 
run  in  his  favor  certainly  from  the  time  that  the  principal  had  knowl- 
edge that  the  agent  had  made  the  collection.  When  an  agent  is  ap- 
pointed for  the  sole  purpose  of  collecting  and  paying  over  money,  the 
statute  of  limitations  begins  to  run  in  favor  of  the  agent  from  the  time 
that  the  fact  that  the  collection  had  been  made  came  to  the  knowledge 
of  the  principal.  Schofield  v.  Woolley,  98  Ga.  548,  25  S.  E.  769,  58 
Am.  St.  Rep.  315.  There  being  positive  evidence  introduced  in  behalf 
of  the  defendant  that  as  to  some  of  the  items  with  which  it  was  sought 
to  charge  him  the  sums  came  into  his  hands  under  authority  simply  to 
collect  and  pay  over,  it  was  error  to  refuse,  at  his  request,  to  give 
an  instruction  to  the   jury  embodying  the  principle  above  referred 

4.Q  7  9         *        *         * 

For  this  and  other  errors,  reversed. 


n 


79  Accord:  Burdick  v.  Garrick,  L.  R.  5  Ch.  App.  Cas.  233,  39  L.  J.  Cb. 
3G9,  18  W.  R.  387  (1870).  The  statute  does  not  bef?in  to  run  until  theie  is  a 
complete  present  cause  of  action.  This  requires  notice,  or  conditions  excus- 
ing notice,  by  the  agent,  and  demand  by  the  principal.  Tlie  principal  lannot, 
however,  by  failing  to  make  a  demand  within  a  reasonable  time,  delay  the  op- 
eration of  the  statute.  Jett  v.  Hempstead,  2.5  Ark.  462  (18(J9).  A  men;  right 
to  a  thing  does  not  constitute  a  cause  of  action.  There  must  also  be  a  wrong, 
in  this  case  a  failure  by  the  agent  to  account  after  demand  by  the  principal. 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  605 

CHAPTER  II 
DUTIES  AND  LIABILITIES  OF  PRINCIPAL  TO  AGENT 


SECTION  1.— COMPENSATION  TO  THE  AGENT 

I.  General  Rule 

Succession  of  KREKELER. 
(Supreme  Court  of  Louisiana,  1S92.    44  La.  Ann.  726,  11  South.  35.) 

Fenner,  J.  William  Krekeler,  the  husband  of  Mrs.  Lizette  Kreke- 
ler,  died  on  March  13,  1890,  leaving  an  estate  consisting  of  some  mov- 
ables and  several  houses  and  lots,  valued  altogether  at  $4,873.90,  be- 
longing jointly  to  his  succession  and  his  widow  as  partners  in  com- 
munity. He  left  no  forced  heirs.  Mrs.  Krekeler  was  nearly  70  years 
old,  in  infirm  health,  weighing  nearly  350  pounds,  unaccustomed  and 
unable  to  attend  to  business.  She  sent  fOr  an  acquaintance,  Charles 
Kummell,  and  asked  him  to  take  charge  of  her  interest,  and  attend  to 
her  affairs  and  property,  which  he  agreed  to  do.  He  attended  to  the 
opening  of  her  husband's  succession  in  her  behalf  as  surviving  wife, 
managed  the  property,  attended  to  repairs,  paid  the  taxes,  collected  the 
rents,  and  did  all  her  business  for  her.  As  indicated,  the  property  be- 
longed to  the  community,  and  Mrs.  Krekeler,  under  the  law,  would 
only  have  enjoyed  the  usufruct  of  the  husband's  half,  which,  at  her 
death,  would  have  passed  to  his  heirs.  But  Mrs.  Krekeler  informed 
Kummell  that  her  husband  had  made  a  notarial  will  in  1858.  Search 
in  his  house  and  papers  failed  to  find  the  copy.  Attention  was  turned 
to  notarial  records.  The  counsel  and  notary  of  the  succession  made 
diligent  search  without  avail.  Mr.  Kummell  himself  made  active 
efforts  to  find  it.  After  others  had  abandoned  the  search  as  fruitless, 
he  discovered  the  will  in  the  records  of  the  notary,  Coffey,  indexed  by 
mistake  under  the  letter  "C,"  instead  of  "K."  The  will  made  Mrs. 
Krekeler  sole  universal  legatee.  It  was  probated,  and  slie  went  into 
possession  of  the  entire  estate  as  sole  owner  on  the  4th  of  December, 
1890.  Very  shortly  afterwards — on  21st  December,  1890 — she  died 
suddenly  in  church.  Her  succession  was  opened,  and  is  under  admin- 
istration by  the  public  administrator,  to  whom  Kummell  i)resented  a 
bill  for  $500  for  services  and  $22  for  expenses.  The  administrator  ad- 
Only  then  will  th(;  statute  licRln  to  run.  Auld  v.  lUitcher,  '22  Knn.  400  (1S7!)). 
So  when  the  a^ent  lias  heen  Kuilty  of  fraud  tlie  statute  runs  from  thi'  time 
the  fraud  wa.s,  or  Ijy  the  use  of  reasonable  diUireme  mi^ht  have  heen.  diseov- 
ered.  Faust  v.  Ilosford.  110  Iowa,  97.  !).'5  N.  W.  5S  (IVM).'.);  McDowell  \.  Pot- 
ter, S   I'ji.   IM).    JI)  Am.  Dec.  T^iY.',   (1848). 


(>0G  EFFHCTS    AM)    CDNSKtJUKNCKS   OF  THE    UELATION  (Part   3 

niittcd  the  claim,  ami  plaood  it  on  his  account.  The  heirs  of  Mrs. 
Krekclcr  opposed  it,  and  from  a  judgment  maintaining  the  opposition 
and  rejecting  the  claim  for  services  Kummell  prosecutes  this  appeal. 

The  opposition  came  with  a  had  grace  from  the  heirs  who  profited  so 
ilirectly  by  KumnicH's  services,  and  we  think  the  judge  erred  in  main- 
taining it.  We  cannot  distinguish  the  case  from  Waterman  v.  Gibson, 
5  La.  Ann.  672.  where  we  said :  "It  is  said  that  a  contract  of  mandate 
is  presumed  to  be  gratuitous,  unless  there  have  been  a  contrary  agree- 
ment. Under  our  Code,  which  has  modified  the  principles  of  the  Ro- 
man law,  it  is  not  of  the  essence  of  mandate  that  it  be  gratuitous ;  and, 
in  our  opinion,  it  is  not  necessary  for  an  agent  to  establish  an  express 
agreement  that  he  should  have  a  pecuniary  remuneration  for  his  serv- 
ices. Courts  may  infer  such  an  agreement  from  the  nature  of  the  em- 
ployment and  the  relations  of  the  parties.  It  would  be  unreasonable 
to  look  upon  the  undertaking  of  the  defendant  as  a  mere  office  d'ami." 
See,  also.  Succession  of  Fowler,  7  La.  Ann.  207;  3  Baudry,  Lacan- 
tinerie  No.  908 ;  27  Laurent,  No.  346.^  This  record  exhibits  no  rela- 
tions between  Kummell  and  the  deceased  except  those  of  long  ac- 
quaintance. He  is  not  shown  to  have  been  a  relative,  or  even  a  very 
close  friend,  or  to  have  been  under  any  obligations  of  any  kind,  or  to 
have  derived  any  advantage  from  his  employment.  Aside  from  such 
relations,  the  services  are  certainly  of  a  character  which  no  person 
would  be  expected  to  render  gratuitously.  There  is  nothing  in  the  evi- 
dence intimating  that  either  party  expected  or  intended  that  they 
should  be  gratuitous.  The  sudden  death  of  Mrs.  Krekeler,  before  any 
occasion  for  a  settlement  had  arisen,  robs  of  significance  the  failure  to 
make  the  claim  during  her  lifetime.  We  see  no  reason  to  doubt  that, 
had  she  lived,  Mrs.  Krekeler  expected  to  pay,  and  would  have  paid,  a 
reasonable  compensation  for  these  services.  Considering,  however,  the 
value  of  the  estate,  and  that  its  entire  revenues  for  the  time  of  services 
did  not  exceed  $500,  we  are  disposed  to  think  the  charge  somewhat 

1  In  Martin  v.  Roberts  (C.  C.)  36  Fed.  217  (18S8),  Simonton,  J.,  thus  stated 
the  rule:  "In  the  transactions  of  commerce  time  is  money.  In  business  there 
is  no  place  for  sentiment.  No  services  are  gratuitous,  not  expressly  declared 
so.  'In  the  ordinary  course  of  commercial  agencies  a  compensation  is  always 
understood  to  belong  to  the  agent,  in  consideration  of  the  duties  and  respon- 
sibilities which  he  assumes,  and  the  labor  and  services  which  he  performs.' 
Story,  Ag.  §  .']2G:  Bish.  Cont.  §  219,  and  cases  quoted;  Id.  §  220,  and  cases 
quoted;  3  Add.  Cont.  §  1401.  In  the  case  of  liavenel  v.  Pinckney's  Assignee, 
'factors,  commission  merchants,  commercial  agents,  and  assignees  are  held 
entitled  to  compensation  from  the  usages  of  trade;'  tliat  is  to  .say,  by  im- 
memorial usage  it  is  distinctly  understood  that  all  persons  engaged  in  com- 
merce, called  upon  to  do  .services  in  the  due  course  of  business,  are  ex  nec- 
essitate entitled  to  compensation,  as  growing  out  of,  and  inseparably  connect- 
ed with,  the  contract  of  their  employment.  I  am  of  the  opinion  that  the  de- 
fendant is  entitled  to  comi»ensation  for  his  services,  and  that  this  was  in  con- 
templation, of  botli  parties  in  the  creation  and  ])rogress  of  the  agency.  He 
cannot  be  deprived  of  this,  unless  it  be  shown  l)y  tlie  testimony  that  he  has 
released,  waived,  or  surrendered  it  for  a  consideration.  Tliis  does  not  ap- 
pear." 

See,  also,  Weston  v.  Davis,  24  Me.  374  (1841). 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCirAL    TO    AGENT  607 

excessive,  and  that  an  allowance  of  $300,  in  addition  to  the  expenses, 
will  suffice.  We  have  considered  the  suggestion  as  to  our  jurisdiction, 
but  think  it  disposed  of  by  our  decision  in  Brierre  v.  Creditors,  43  La. 
Ann.  423,  9  South.  640. 

It  is  therefore  ordered  and  decreed  that  judgment  appealed  from 
be  amended  by  increasing  the  amount  allowed  Charles  Kummell  from 
$22  to  $322,  and  that,  as  thus  amended,  the  same  be  affirmed,  appellees 
to  pay  cost  of  appeal. 


LOCKWOOD  V.  ROBEINS. 
(Supreme  Court  of  Judicature  of  Indiana,  1890.    125  Ind.  398,  25  N.  E.  455.) 

Mitchell,  J.^  Leon  Robbins  filed  a  claim  for  three  years  and 
six  months'  work  and  labor  against  the  estate  of  Alonzo  Lockwood, 
deceased.     *     *     * 

The  material  facts  as  returned  in  a  special  verdict  were  that  the 
plaintifT,  a  minor  about  12  years  old,  without  father  or  other  guardian, 
entered  the  decedent's  service  in  1876,  and  continued  therein  until 
March,  1880,  during  which  time  he  performed  service  for  the  latter 
at  his  instance  and  request,  of  the  value,  after  deducting  board,  cloth- 
ing, washing,  and  mending  furnished  by  the  decedent  of  $80.  The 
services  were  not  performed  under  any  contract  between  the  plaintiff 
and  decedent,  nor  between  the  latter  and  any  other  person  authorized 
to  contract  for  the  plaintifif.  Upon  the  facts  found,  the  court  very 
properly  entered  judgment  for  the  plaintiff.  It  does  not  appear  that 
the  plaintiff  was  taken  into  the  decedent's  family  and  cared  for  and 
treated  as  a  member  thereof.  On  the  contrary,  he  entered  his  service 
and  performed  labor  at  the  decedent's  instance  and  request,  and,  al- 
though there  was  no  special  contract  for  remuneration,  the  law  raises 
an  implied  obligation  to  pay  what  the  services  were  reasonably  worth. 
"Gerard  V;  Dill,  96  Ind.  476.  Where  one  is  taken  into  the  family  of  an- 
other, and  is  regarded  and  treated  in  every  respect  as  a  member  of  the 
household,  then,  even  though  there  may  be  no  ties  of  blood,  there  is 
noirn|)licd_o1)ligation  to  pay  for  services  rendered  on  the  one  hand, 
npripr  board  furnished  on  the  other.  Brown  v.  Yaryan,  74  Ind.  305, 
and  cases  cTtecf;' Marquess  v.  La  Baw,  82  Ind.  550;  Wright  v.  Mc- 
Larinan,  92  Ind.  103.    The  present  is,  however,  not  such  a  case. 

The  judgment  is  affirmed,  with  costs. 

«  Pnrt  of  llio  opinion  Is  omlttod. 


1)08        EFFKCTS  AND  CONSEQUENCES  OF  TUE  UBLATION    (Part  3 

^^^\TJ.ACE  v.  floyd. 

(Supronio  Court  of  lV>mis\iviiiii!>,  1857.    29  Pa.  184,  72  Am.  Dec.  620.) 

Armstrong,  J.  Nathan  Floyd,  who  was  plaintifif  below,  brought 
suit  against  W.  W.  Wallace,  for  three  years  and  three  months'  serv- 
ices as  clerk  at  Iron  City  Furnace.  He  declared  in  assumpsit  in  the 
common  counts  and  on  a  quantum  meruit.  The  pleas  were  non  as- 
sumpsit, payment,  etc.  The  cause  was  arbitrated,  and  an  award  filed 
in  favour  of  plaintiff  for  1?209.14,  from  which  he  appealed,  and  on  a 
trial  in  court  obtained  a  verdict  for  $650.  The  defendant,  Wallace, 
moved  for  a  new  trial,  and  on  the  17th  of  March,  1854,  after  argu- 
ment, by  consent  of  counsel,  on  payment  of  the  amount  of  the  award, 
with  interest  and  costs,  the  verdict  was  set  aside  as  to  the  residue  of 
plaintiff's  claim,  and  defendant  let  into  a  defence  as  to  the  value  of 
plaintiff's  sennces. 

The  cause  again  came  on  for  trial,  and  in  the  course  of  it,  the  de- 
fendant, Wallace,  alleged  and  proved  a  special  contract  at  $300  per  an- 
num.    And  prayed  the  court  to  instruct  the  jury: 

1.  That  if  the  jury  believe  that  the  plaintiff  engaged  to  serve  the  de- 
fendant at  a  fixed  salary  per  year,  he  cannot  recover  more  than  the 
amount  agreed  upon. 

2.  That  if  defendant  made  a  bargain  at  a  fixed  sum,  and  continued 
till  he  left  without  a  special  bargain  to  raise  his  salary,  he  is  bound  by 
his  original  contract ;  the  presumption  being,  that  he  continued  under 
the  same  contract. 

To  these  points  the  court  answered : 

"We  decline  to  charge  as  requested  in  the  foregoing  points.  When 
the  verdict  was  set  aside,  it  was  on  terms  that  the  defendant  might 
take  defence  as  to  the  value  of  the  plaintiff's  services.  That  is  the  is- 
sue in  this  case.  The  jury  will  determine  from  the  whole  evidence 
what  was  the  value  of  the  plaintiff's  services." 

It  is  very  true,  as  contended  for,  that  courts  in  granting  new  trials, 
have  a  right  to  make  terms.  The  terms  usually  made  are  such  as  re- 
late to  the  payment  of  costs,  the  compliance  with  rules  of  court,  or 
with  some  stipulation  not  affecting  the  merits  of  the  controversy.  But 
to  make  terms  which  would  change  the  nature  of  a  contract,  or  shut 
out  the  evidence  necessary  to  support  it,  might  be  an  exercise  of  pow- 
er not  calculated  in  a  very  high  degree  to  promote  the  interests  of  the 
parties.  When,  however,  the  terms  on  which  a  new  trial  is  granted, 
are  spread  on  the  face  of  the  record,  their  meaning  is  not  to  be  gath- 
ered from  any  latent  intention  that  may  have  existed,  but  from  the  im- 
port of  the  language  used.  It  is  admitted  by  the  argument  of  the 
counsel  for  the  defendant  in  error,  that  the  points  submitted  on  the 
part  of  Wallace,  as  abstract  propositions,  are  correct,  but  it  denies  their 
application  to  this  case.  He  insists  that  according  to  the  terms  of  the 
order  granting  a  new  trial,  the  issue  was  "as  to  the  value  of  the  plain- 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  609 

tiff's  services."  That  the  question  was  not  how  much  Wallace  agreed 
to  give,  or  Floyd  proposed  to  take,  but  simply  how  much  the  services 
were  worth  independent  of  the  contract.  And  the  error  of  the  court 
was  in  thinking  with  the  claimant's  counsel.  The  terms  of  the  order 
did  not  restrict  or  prescribe  the  mode  or  kind  of  proof  by  which  the 
value  of  the  services  was  to  be  ascertained.  I  know  of  no  standard  of 
value  that  could  be  more  satisfactory  than  that  which  the  parties  fix 
for  themselves ;  and  where  there  is  a  special  contract,  fixing  the  terms 
and  conditions  on  which  one  party  shall  serve  another,  in  the  absence 
of  proof  rescinding  or  altering  it,  it  is  conclusive.  If  a  tenant  holds 
over  without  notice  to  quit,  or  a  new  contract,  the  terms  and  conditions 
of  his  old  lease  will  govern.  So,  if  a  man  agree  to  serve  another  for 
a  month  or  year,  at  a  stipulated  sum  per  month  or  year,  and  silently 
continues  longer  in  the  service,  it  will  be  on  the  old  terms.  If  there 
was  a  special  contract  existing,  it  was  the  duty  of  Floyd  to  give  notice 
to  his  employer  if  he  wished  to  alter  or  enlarge  its  terms  ;  and  it  would 
then  have  been  incumbent  on  Wallace  to  accede  to  the  demand  or  ter- 
minate the  service.  The  court  said  in  answer  to  the  defendant's  offer, 
"The  inquiry  is  as  to  the  value  of  plaintiff's  services,  and  not  as  to  the 
contract  price ;  and,  so  far  as  the  evidence  may  tend  to  show  their 
value,  it  is  admitted."  From  this  the  jury  might  very  readily  suppose 
that  the  "contract  price"  was  excluded,  and  that  it  was  only  the  other 
evidence  in  the  cause  from  which  they  could  fix  the  value,^  If  no  con- 
tract was  proved,  this  might  be  correct.  But  if  there  was  a_  special 
agreement,  as  is  alleged,  not  changed  or  rescinded,  it  would  control ; 
and  it  was  error  to  mingle  it  with  other  evidence  to  enhance  the  value. 
Judgment  reversed  and  venire  de  novo  awarded. 


MILLAR  V.  CUDDY. 

(Supreme  Court  of  MichiRan,  1880.    43  Mich.  27.3.  5  N.  W.  .316,  .38  Am.  Rep. 

181.) 

Marston,  C.  J.  We  have  been  unable  to  discover  any  error  in 
this  case.  The  conversation  that  took  place  between  Brace  and  one  of 
the  plaintiffs  was  clearly  admissible  in  evidence.  It  was  the  commence- 
ment and  a  part  of  the  conversation  or  negotiations  which  led  to  the 
employment  of  the  defendant  in  error.  It  had  a  tendency  to  show  that 
a  fixed  amount  was  to  be  paid,  and  was  admissible  in  any  view  of  the 

"  Wln-n  tlic  fontriU't  stliiulates  the  rompciisation  of  tli(>  agt'nt  it  is  error  to 
IiistriKt  11h!  jurv  that  tin;  apent  may  recover  what  lii.s  .servlees  are  reason- 
ably wortli,  MfCormlek  &  Rro.  v.  I'.usli,  47  Tex.  101  (1877);  or  to  admit  evi- 
dence as  to  tlu"  reasonable  value  of  the  services  rendered,  Hamilton  v.  I"'roth- 
Inuham,  .'»'.»  .Midi.  i,'.").'t,  -Iti  N.  W.  48(»  (ISSd).  Usage  and  custom  cannot  pre- 
vail auainst  the  srlpulations  of  the  agency  contract.  Bower  v.  Jones,  S  Hing. 
65,  21  E.  C.  L.  417  (is.'. I). 
GoDD.ra.&A.— 39 


(510  ErPKCTS   AND   CONSICQUENCES   OF  THE    KELATION  (Part   3 

case.  On  the  other  hand  the  defendants  helow  denied  that  any  sum 
was  agreed  upon,  hut  that  they  were  to  pay  him  what  they  thought  he 
was  worth  to  them.  This  could  not  mean  that  they  could,  after  the 
services  had  been  performed,  fix  the  comi)ensati()n  at  such  sum  as  they 
pleased.  Parties  may  make  such  an  agreement,  hul  wc  think  this  lan- 
guage does  not  warrant  any  such  view.  If  no  agreement  as  to  com- 
pensation was  made,  then  the  law  would  imply  that  they  should  pay 
what  his  services  were  reasonably  worth,*  and  the  court  so  instructed 
the  jury.  There  w^as  no  error  in  the  court  permitting  the  jury  to  take 
to  their  room  the  computation  made  by  the  plaintiff's  attorney.  It  was 
but  an  aid  to  the  jury  in  estimating  the  amount  due  the  plaintiff,  if 
they  found  his  theory  of  the  case  to  be  correct.  They  were  in  no  way 
bound  by  it,  and  they  could  not  consider  it  as  evidence  or  be  misled 
thereby.  To  permit  the  jury  to  take  such  a  paper  was  but  in  accord- 
ance with  long,  well  settled  practice,  and  was  unobjectionable. 

The  judgment  must  be  affirmed  with  costs. 

The  other  Justices  concurred. 


VILAS  V.  DOWNER. 

(Supreme  Court  of  Vermont,  1849.     21  Vt.  419.) 

Book  account  for  services  by  plaintiff  as  attorney  for  defendant  in 
sundry. suits.  Defendant  claimed  plaintiff's  charges  were  unreason- 
ably high. 

Poland,  jb  *  *  *  From  the  report  of  the  auditors  in  this 
case  we  think  it  is  apparent,  that  they  allowed  the  plaintiff's  charges, 
as  they  were  presented  before  them,  solely  upon  the  ground,  that  they 
were  charged  according  to  his  usual  and  customary  rule  of  charging 
for  his  professional  services,  without  reference  to  their  being  reason- 
able, or  that  they  had  been  acquiesced  in  or  assented  to  by  the  defend- 
ant. This,  then,  presents  the  question,  as  to  what  should  be  the  rule 
of  compensation  for  the  services  of  an  attorney,  who  is  employed  by  a 
client  to  manage  a  suit,  without  any  special  agreement  as  to  the  amount 
of  his  charges  for  such  service. 

In  England,  and  in  some  of  the  neighboring  states,  such  questions 
cannot  well  arise,  because  the  bills  of  attorneys  for  services  for  their 
clients  are  always  settled  by  a  taxation,  to  be  made  by  a  master,  or 
prothonotary,  of  the  court;  and,  in  actions  to  recover  for  their  serv- 
ices, the  amount  is  fixed  by  such  taxation.  But  in  this  state  we  have 
no  such  practice;  and  attorneys  are  left,  in  common  with  every  other 
class  of  citizens,  who  bring  suits  to  recover  the  price  of  their  labor,  to 
commence  their  suits  and  have  not  only  their  right  but  amount  of  re- 

*  Such  a  promise,  however,  is  Implied  only  when  there  is  no  express  agree- 
ment as  to  the  amount  of  the  compensation,  Weston  v.  Davis,  24  Me.  374 
(1841). 

5  Part  of  the  opinion  is  omitted. 


k 


Ch.  2)  DUTIES    AND    LIABILITIES    OP    PRINCirAL    TO    AGENT  611 

covery  determined  by  a  jury,  or  by  auditors,  according  to  their  choice 
of  actions.  What  rule,  then,  should  govern  the  triers,  in  fixing  the 
amount  of  damages  to  be  awarded  to  a  plaintiff  in  such  a  case?  In  all 
other  cases  of  employment,  or  hiring,  where  no  stipulation  is  made  as 
to  price,  the  law  implies  a  promise,  or  agreement,  on  the  part  of  the 
employer,  to  pay  the  person  employed  such  sum,  as  his  services  are  rea- 
sonably worth,  or  as  he  reasonably  deserves  to  have ;  and  on  the  pur- 
chase of  goods,  without  express  stipulation  as  to  price,  the  purchaser 
is  only  bound  to  pay  what  the  goods  are  reasonably  worth. 

\\'e  are  not  able  to  find  any  reason,  or  authority,  to  distinguish  the 
rule  in  relation  to  the  employment  of  lawyers  from  that  which  obtains 
in  every  other  employment  for  service.  It  must  of  course  be  more  dif- 
ficult, often,  to  determine  what  the  sum  should  be,  for  service,  the 
value  of  which  depends  much  upon  professional  skill  and  learning, 
than  in  the  case  of  mere  mechanical  or  physical  labor ;  but  after  all 
we  think  the  same  principles  must  govern  both,  and  that  in  this  case 
the  auditors  should  have  examined  the  plaintiff's  charges,  and  allowed 
him  what  he  reasonably  deserved,  with  a  proper  reference  to  the  na- 
ture of  the  business  performed  by  him  for  the  defendant,  and  his  own 
standing  in  his  profession  for  learning  and  skillfulness,  whereby  the 
value  of  his  services  was  enhanced  to  the  defendant. 

For  the  purpose  of  aiding  in  the  determination  of  the  value  of  the 
I)laiiitiff's  services,  we  think  it  was  proper  for  the  auditors  to  receive 
evidence  of  the  usual  prices  charged  and  received  for  similar  services 
to  those  rendered  by  the  plaintiff  for  the  defendant  by  other  men  of 
the  same  profession  with  the  plaintiff,  in  the  same  vicinity,  and  in  the 
same  courts ;  and  that  the  evidence  offered  by  the  defendant  for  that 
purpose,  and  which  was  rejected  by  the  auditors,  should  have  been  re- 
ceived. Such  evidence  could  not,  from  the  nature  of  the  case,  furnish 
an  exact  and  certain  rule  to  determine  the  amount  of  the  plaintiff's 
charges;  as  other  cases,  precisely  like  those  of  the  defendant,  might 
not  be  frequent,  and  other  attorneys  of  precisely  equal  professional 
reputation  and  skill  with  the  plaintiff'  might  not  be  found  in  the  vicin- 
ity ;  but  we  think  such  evidence  would  afford  an  approximation  to  the 
true  rule  to  govern  the  plaintiff's  charges.  In  all  ordinary  cases,  in  de- 
termining the  value  of  services,  evidence  is  received  of  what  is  com- 
monly and  usually  charged  by  other  persons  for  the  like  services;  and 
in  determining  the  value  of  goods,  evidence  is  received  of  what  sim- 
ilar articles  are  bought  and  sold  for,  in  order  to  ascertain  their  value  in 
market;"  and  in  our  opinion  the  price  of  a  lawyer's  professional  labor 
must  be  ascertained  and  determined  by  the  same  rule.  It  would  be 
wholly  unjust,  to  require  a  person  enii)loying  a  lawyer  to  manage  a 
suit,  (where  of  course  it  could  not  be  known  to  either  party,  how  long 
it  would  continue  in  court,  or  the  amount  of  professional  labor,  which 

•>  WlH-ncvfT  tlif  Jm«'n<y  coiitrint  fnlls  to  \\\  tlio  amount  of  (lie  jmcnt's  <-oni- 
IK'iisiitlfiii  cvidfiu'o  slioiiM  Ih'  adiiilltcd  to  sliow  Its  rciisoiiMltlc  viilut".  Tooiiiy 
V.  I»uiiiiliy,  sc,  c.ii.  (;:;!i.  lt,  v.w.   L'!0  (IS'.hm. 


612        EFFECTS  AND  CONSKQUENCES  OF  THE  RELATION    (Part  3 

would  be  required  to  carry  it  through,)  to  stipulate  as  to  the  amount  of 
his  charges,  or  else  be  compelled  to  pay  such  charges,  as  the  lawyer 
shoukl  see  fit  to  make  against  him.     *     *     * 
Judgment  reversed  and  case  recommitted. 


HARRISON  V.  GOTLEIB. 


/ 


(Circuit  Court  of  Ohio.  First  Circuit,  1888.     3  Oliio  Cir.  Ct.  191,  2  Oliio  Clr. 

Dec.  109.)       . 

Smith,  C.  j.t  *  *  *  The  action  was  brought  by  Gotleib  against 
Harrison  to  recover  what  he  claimed  was  the  value  of  services  ren- 
dered by  him  in  effecting  a  lease  by  Harrison  of  certain  real  estate  to 
Isaac  Failer  Sons ;  and  his  employment  was  denied  by  Harrison,  or 
that  any  services  were  rendered  for  which  the  latter  was  liable  to  pay. 

It  is  conceded  that  the  evidence  tends  to  show  this  state  of  facts, 
there  being  no  great  controversy  as  to  any  one  point.  Gotleib  was 
not  a  real  estate  broker,  and  had  never  been  engaged  in  that  busi- 
ness. He  was  on  intimate  terms  with  Isaac  Failer  Sons,  a  firm  doing 
business  at  the  foot  of  Main  street,  and  made  his  headquarters  at 
their  store.  He  knew  of  their  desire  to  purchase  or  lease  property 
for  their  business  higher  up  in  the  city,  and  on  a  casual  walk  with 
some  of  the  members  of  the  firm,  he  noticed  a  piece  of  property  on 
Vine  street,  owned  by  Mr.  Harrison.  After  this,  apparently  of  his 
own  motion,  he  sought  the  acquaintance  of  Mr.  Harrison  (they  being 
strangers  to  each  other),  and  spoke  to  him  of  this  property,  and  told 
him  he  had  friends  who  were  looking  for  a  location,  and  that  this 
might  suit  them.  Harrison  asked  who  they  were,  and  on  b^ing  told, 
said :  "Bring  your  friends  to  see  me."  No  price  for  the  property  was 
spoken  of,  and  no  terms  as  to  rental  or  purchase. 

Gotleib  does  not  claim  that  anything  else  of  a  material  character 
took  place  at  that  time,  or  that  he  told  Harrison  that  he  was  a  broker, 
or  that  he  would  expect  any  commission  or  compensation  if  an  ar- 
rangement was  entered  into  between  the  parties,  or  that  anything 
else  was  said  or  done  to  advise  Harrison  thereof,  or  to  show  that  he 
had  any  idea  that  he  (Gotleib)  expected  compensation. 

Gotleib  told  Failer  Sons  what  he  had  done,  and  they  called  upon 
Harrison,  and  their  negotiations  resulted  after  some  time,  in  the  erec- 
tion by  the  latter  of  a  storehouse  upon  this  lot,  and  a  lease  of  it  to 
them  for  several  years  at  a  large  rent.  Gotleib,  so  far  as  Harrison 
knew,  had  nothing  whatever  to  do  with  the  negotiations,  and  nothing 
further  passed  between  them  on  the  subject  till,  as  Gotleib  says,  just 
before  the  completion  of  the  arrangement  (Harrison  says  after  it),  he 
notified  the  latter  that  he  would  expect  pay.  Gotleib  seems  to  have 
encouraged  Failer  Sons  to  make  the  lease,  but  was  not  employed  by 

7  Part  of  the  opinion  is  omitted. 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL   TO   AGENT  613 

them  to  aid  in  the  matter,  and  received  no  compensation  therefor 
from  them. 

There  being  no  claim  of  an  express  employment  of  Gotleib,  was 
there  an  implied  contract  that  he  was  to  be  paid  for  his  services  by 
Harrison  ? 

Blackstone,  in  vol.  2,  443,  says :  "Implied  contracts  are  such  as  rea- 
son and  justice  dictate,  and  which  therefore  the  law  presumes  that 
every  man  undertakes  to  perform;"  and  the  question  whether  a  lia- 
bility is  incurred  by  one  person  to  compensate  another  for  services  ren- 
dered to  him,  in  the  absence  of  an  express  contract,  is,  in  a  multitude 
of  cases,  to  be  determined  solely  by  the  acts  of  the  parties  themselves, 
their  relations  to  each  other,  and  the  peculiar  circumstances  which 
surrounded  them  at  the  time.  For  there  can  be  no  question,  but  that 
one  person  may  render  valuable  services  to  another,  with  his  knowl- 
edge and  consent,  and  yet  no  obligation  to  pay  therefor  will  arise,  for 
the  reason  that  neither  of  the  parties  intended  it,  or  if  the  person  ren- 
dering the  service  did  intend  to  make  a  charge  therefor,  yet  the  cir- 
cumstances may  have  been  such  that  a  person  of  ordinary  judgment 
would  not  suppose  that  such  a  charge  would  be  made,  and  the  party 
receiving  the  service  did  not,  in  fact,  so  believe. 

The  authorities  cited  and  relied  upon  by  the  defendant  in  error, 
we  think,  sustain  this  doctrine. 

The  case  of  Day  v.  Caton,  119  Mass.  513,  20  Am.  Rep.  347,  is  one, 
the  syllabus  of  which  is  this:  "In  an  action  to  recover  the  value  of 
one-half  of  a  party  wall  erected  by  plaintiff,  partly  on  his  estate,  and 
partly  on  that  of  the  defendant,  the  jury  may,  in  the  absence  of  an 
express  agreement  as  to  payment  on  the  defendant's  part,  infer  a 
promise  to  pay,  if  the  plaintiff  undertook  and  completed  the  wall  with 
the  expectation  that  the  defendant  would  pay  him  for  it,  and  the 
defendant  had  reason  to  know,  that  the  plaintiff  was  so  acting  with 
that  expectation,  and  allowed  him  so  to  act  without  objection."  And 
in  the  decision  it  is  said,  "that  it  is  conceded  to  be  the  law,  that  a 
promise  to  pay  for  the  party  wall,  would  not  be  inferred  from  the 
fact  (alone)  that  the  plaintiff,  with  the  defendant's  knowledge,  built  it, 
and  that  the  defendant  used  it. 

And  in  Wald's  Pollock  on  Contracts,  page  11,  the  law  is  stated  con- 
cisely thus:  "If  A.,  with  R.'s  knowledge,  but  without  any  express 
request,  does  work  for  B.  such  as  people  as  a  rule  exi)ect  to  be  paid 
for,  if  B.  accepts  the  work  or  its  result,  and  if  there  arc  no  special 
circumstances  to  show  that  A.  meant  to  do  the  work  for  nothing, 
or  that  B.  honestly  believed  that  such  was  his  intention,  there  is  no 
difficulty  in  inferring  a  promise  by  B.  to  pay  what  A.'s  labor  is  worth. 
And  this  is  a  pure  inference  of  fact,  the  question  being,  whether  B.'s 
conrluct  has  been  such  that  a  reasonable  man  in  A.'s  position  would 
understand  from  it  that  A.  meant  to  treat  the  work  as  if  done  to 
his  express  order.     The  doing  of  the  work  with   B.'s  knowledge,  is 


oil  EFKKOTS    AND   CONSKQUENCKS   OF  TIIK    UELATION  (Part   3 

the  proposal  of  a  contract,  and  B.'s  conduct  is  the  acceptance."  Ac- 
ceptinj;  this  as  the  law,  the  (piestion  is,  was  it  given  suljstantially  to 
the  jury  by  the  court? 

An  examination  of  the  charge  of  the  court  leads  us  to  the  conclu- 
sion that  it  was  not.  ^^'hile  in  one  part  of  it  there  is  a  statement  that 
if  the  services  were  rendered  by  Gotleib  voluntarily,  as  a  matter  of 
acconnnodation,  or  a  matter  of  kindness,  to  any  person,  or  for  Kailer 
Sons,  he  could  not  recover,  yet  no  stress  is  laid  upon  this,  and  in  sev- 
eral places  where  the  court  seems  to  recapitulate,  and  to  give  the  law 
which  is  to  govern  the  jury,  in  substance  it  is  charged  that  all  that 
was  necessary  to  entitle  the  plaintiff  to  recover,  was  that  service  should 
have  been  rendered  to  Harrison,  and  that  he  had  the  benefit  of  it, 
and  knew  that  the  service  was  rendered  for  him.  All  this  might  have 
been  so.  and  Harrison  not  be  liable  at  all.  There  are  cases  occurring 
continually,  where  one  person  renders  valuable  service  for  another, 
and  the  latter  knows  it  and  avails  himself  of  it,  and  yet  is  not  bound 
to  pay  for  it.  H  the  services  are  such  as  people  ordinarily  expect 
to  be  paid  for,  and  there  are  no  special  circumstances  to  show  that 
they  were  not  in  a  particular  instance,  a  promise  to  pay  may  fairly 
be  inferred. 

But  we  think,  that  under  the  circumstances  disclosed  in  this  case, 
where  there  was  so  little  evidence  on  which  a  jury  could  properly  find 
that  services  had  been  rendered  by  Gotleib  to  Harrison,  the  former  in- 
tending to  charge,  and  the  latter  to  pay  therefor,  or  to  show  a  state 
of  fact  that  would  give  rise  to  such  a  presumption,  or  that  the  service 
was  really  rendered  for  Harrison's  benefit  and  not  for  the  benefit  of 
his  own  friends,  that  the  defendant  was  entitled,  on  proper  request 
therefor,  to  have  the  rule  with  the  proper  limitations  which  we  have 
tried  to  state,  given  to  the  jury.  This  was  attempted  by  the  counsel 
for  the  defendant,  but  it  was,  as  appears  by  the  bill  of  exceptions, 
by  asking  a  series  of  charges  to  be  given  as  a  whole,  and  it  contained 
the  statement  that  to  entitle  the  plaintifif  to  a  recovery  he  should  have 
shown  that  he  was  a  real  estate  broker,  and  that  Harrison  knew  it. 
This  was  not  good  law — for  others  than  professional  brokers  may,  in 
proper  cases,  be  entitled  to  compensation  for  services  rendered  in 
matters  of  this  kind,  and  that  without  an  express  contract.  In  strict- 
ness, therefore,  the  court  was  justified  in  refusing  to  give  the  charge 
as  a  whole,  though  the  other  parts  of  it  may  have  been  entirely  sound. 

But  we  think  the  statement  of  the  law  as  given  by  the  court  to  the 
jury,  was,  under  the  circumstances  shown,  misleading  and  erroneous, 
in  making  the  right  of  Gotleib  to  recover,  to  depend  alone  upon  the 
question  vv'hether  he  rendered  the  services  for  Harrison  and  that  the 
latter  knew  it.  They  should  further  have  been  instructed,  that  if  the 
service  rendered  by  Gotleib  was  such  as  people  usually  charge  for  (in 
this  case  a  question  of  fact  and  not  of  law)  and  there  was  nothing  dis- 
closed which  H'ould  show  that  Gotleib  had  not  the  intention  of  charg- 


i 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  G15 

ing  for  it,  or  that  Harrison  might  well  believe  that  he  was  not  to. 
pay  for  such  service,  that  they  might  properly  infer  a  promise  on  the 
part  of  Harrison  to  pay.^  This  was  not  done,  and  for  this  reason  we 
think  the  judgment  should  be  reversed. 


II.  When  the  Agent  Abandons  the  Agency 
TIMBERLAKE  v.  THAYER. 

(Supreme  Court  of  Mississippi,  1S93.     71  Miss.  279,  14  South.  44G,  24  L.  R.  A. 

231.) 

Attachment  against  Vandiver  and  Trotter,  makers,  and  Timber- 
lake,  indorser,  of  a  promissory  note.  Case  dismissed  by  plaintiff  as 
to  Vandiver  and  Trotter.  Defendant  claimed  release  by  reason  of  a 
contract  that  plaintiff  was  to  accept  services  from  Vandiver  in  pay- 
ment of  the  note.  The  trial  court  instructed  the  jury  that  if  Vandiver 
made  an  entire  contract  for  services,  but  abandoned  the  service  with- 
out the  fault  or  consent  of  Thayer  before  the  expiration  of  a  year, 
then  \'andiver  was  entitled  to  nothing  for  the  service  actually  ren- 
dered.    From  judgment  for  plaintiff  defendant  appeals. 

Cooper,  ].°  If  we  were  authorized  to  make  the  law,  instead  of 
announcing  it  as  it  is  already  made,  we  would  unhesitatingly  hold 
that  one  contracting  to  render  personal  service  to  another  for  a  speci- 
fied time  could,  upon  breach  of  the  contract  by  himself,  recover  from 
that  other  for  the  value  of  the  service  rendered  by  him,  and  received 
by  that  other,  subject  to  a  diminution  of  his  demand  to  the  extent 
of  the  damage  flowing  from  his  l)reach  of  contract.  In  Britton  v. 
Turner,  6  N.  H.  481,  26  Am.  Dec.  713,  Judge  Parker  demonstrates, 
in  an  admirable  and  powerful  opinion,  the  equity  of  such  a  rule ;  and 
it  was  held  in  that  case  that  such  was  the  rule  of  the  common  law. 
The  courts  of  some  of  the  states  have  followed  or  been  influenced  by 
that  opinion,  and  have  overturned  or  mitigated  the  vigorous  rule  of 
the  common  law.  Pixler  v.  Nichols,  8  Iowa,  106,  74  Am.  Dec.  298 ; 
Coe  V.  Smith,  4  Ind.  79,  58  Am.  Dec.  618;  Riggs  v.  Horde,  25  Tex. 
Supp.  456,  78  Am.  Dec.  584;  Chamblee  v.  Baker,  95  N.  C.  98;  Par- 
cell  V.  McComber,  11  Neb.  209,  7  N.  W.  529,  38  Am.  Rep.  366. 
But  the  decided  weight  of  authority  is  to  the  contrary.^"  Lawson, 
Cont.  Carr.  §  470,  note  4,  and  authorities  there  cited.     And  it  was 

"Accord:  McLliicy  v.  Goiiipi-<jrlit,  7  Misc.  Rep.  1C9,  27  N.  Y.  Supp.  2."J.'J 
(1894 ». 

»  Part  of  the  or»iiiion  Is  ouiitfcd. 

ioAccf.nl:  Sliirk  v.  Rjirkcr,.2  I'iik.  2r,7.  IP,  Am.  Doc.  42.'  (]S2f\  a  Ic.-idiiif,' 
casf  ff.r  the  jtrcviiiliiij;  ruh*;  Olmstoid  v.  Reale,  19  l'i<-k.  r>2S  (is;;7):  Miller  v. 
Oodd.ird.  .",4  Mc.  1(»2.  r.f5  Am.  Dec.  O-'iS  (IS.VJ)  ;  NVllchkn  v.  Kstcrly,  29  Minn, 
no,  12  N.  W.  4r)7  (IssL'i.  The  rule  has  hecii  vi>;<ir(iusly  assailed.  esiu'ii;ill,v 
In  the  leadiiiu  case  of  I'.ritton  v.  Turner,  0  N.  H.  4X1,  2(1  .\m.  Dec.  7I."{  (1S.!4). 


(516        EFFErXS  AND  CONSEQUENCES  OF  THE  RELATION    (Part  3 

dociilod  at  any  early  day  in  this  state  that  an  entire  contract  of  this 
character  could  not  be  apportioned,  and  that,  under  the  circum- 
stances named,  no  recovery  could  be  had  by  the  party  guilty  of  the 
breach  of  contract ;  that  he  could  not  recover  on  the  special  contract, 
because  he  himself  had  not  performed  it,  nor  upon  a  quantum  meruit, 
because  of  the  existence  of  the  special  contract.  Wooten  v.  Read,  2 
Smedes  &  M.  585.  In  Ilariston  v.  Sale,  6  Smedcs  &  M.  634,  and 
Robinson  v.  Sanders,  24  Miss.  391,  it  was  held  that  an  overseer's 
contract  with  his  employer,  though  made  for  a  definite  time,  was  not 
an  entire  contract,  and  recoveries  were  allowed  on  the  common 
counts.  The  cases  relied  on  to  support  the  rule  announced  in  these 
decisions  were  Byrd  v.  Boyd,  4  McCord,  246,   17  Am.   Dec.  740; 

In  approving  this  case,  Cobb,  J.,  in  Parcell  v.  McComber,  11  Neb.  209,  7  N.  W. 
629,  oS  Am.  Rep.  3UG  (1881)  says: 

•  i here  is  an  luiportant  (luestion  presented  in  this  case,  one  upon  which  it 
cannot  be  claimed  that  the  authorities,  either  as  expressed  in  the  opinions  of 
courts  or  the  treatises  of  text  writers,  are  agreed.  Until  the  last  fifty  years  it 
was  quite  generally  held  to  be  the  law,  both  in  England  and  in  America,  that 
where  a  person,  having  agreed  to  work  for  another  for  a  definite  period  of 
time,  voluntarily  leaves  such  service  without  any  fault  on  the  part  of  the  em- 
ployer, and  without  his  consent,  before  the  expiration  of  the  term,  he  cannot 
recover  in  any  form  of  action  for  the  services  actually  rendered.  The  rea- 
soning upon  which  the  decisions  holding  this  view  were  generally  sustained 
is  well  expressed  by  Morton,  J.,  in  delivering  the  opinion  of  the  court  in  01m- 
stead  V.  Beale,  19  Pick.  528,  in  the  following  language:  'The  plaintiff  cannot 
recover  on  his  express  contract,  because  he  has  not  executed  it  on  his  part, 
and  the  performance  is  a  condition  precedent  to  the  payment.  He  cannot  re- 
cover on  a  quantum  meruit  for  the  labor  performed,  because  an  express  con- 
tract alwavs  excludes  an  implied  one  in  relation  to  the  same  matter.' 

"But  in  \he  case  of  Britton  v.  Turner,  G  N.  II.  481,  26  Am.  Dec.  713,  de- 
cided in  18.34.  a  marked  departure  was  taken  from  the  former  line  of  deci- 
sions. In  that  case,  one  quite  parallel  to  the  case  at  bar,  it  was  held  that 
•where  a  contract  is  made  of  such  a  character  a  party  actually  receives  labor 
or  materials,  and  thereby  derives  a  benefit  and  advantage  over  and  above  the 
damage  which  has  resulted  from  the  breach  of  the  contract  by  the  other  par- 
ty, the  labor  actually  done,  and  the  value  received,  furnish  a  new  considera- 
tion, and  the  law  thereupon  raises  a  promise  to  pay  to  the  extent  of  the  rea- 
sonable worth  of  such  excess.'  And  again:  'In  fact  we  think  the  technical 
reasoning,  that  the  performance  of  the  whole  labor  is  a  condition  precedent, 
and  the  right  to  recover  anything  dependent  ui)on  it,  that  the  contract  being 
entire  there  can  be  no  apportionment,  and  there  being  an  express  contract, 
no  other  can  be  implied,  even  upon  the  subsetiuent  performance  of  service, 
is  not  properly  applicable  to  this  species  of  contract,  where  a  beneficial  serv- 
ice has  been  actually  performed;  for  we  have  abundant  reason  to  believe 
that  the  general  understanding  of  the  community  is  that  the  hired  laborer 
shall  be  entitled  to  compensation  for  the  service  actually  performed,  though 
he  do  not  continue  the  entire  term  contracted  for,  and  such  contracts  must  be 
presumed  to  be  made  with  reference  to  that  understanding,  unless  an  express 
stipulation  shows  the  contrary,  \\liere  a  beneficial  service  has  been  perform- 
ed and  received,  therefore,  under  contracts  of  this  kind,  the  mutual  agree- 
ments cannot  be  considered  as  going  to  the  whole  of  the  consideration,  so 
as  to  make  them  mutual  conditions,  the  one  precedent  to  the  other,  without 
a  specific  proviso  to  that  effect.'  " 

See,  also,  Allen  v.  McKibben,  5  Mich.  449  (1858);  Duncan  v.  Baker,  21  Kan. 
99  (1878). 

No  recovery  can  be  had  if  the  contract  of  employment  expressly  stipulates 
a  forfeiture  for  wrongful  abandonment  by   the  agent.     Harmon  v.   Salmon 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  617 

Eaken  v.  Harrison,  4  McCord,  249;  McClure  v.  Pyatt,  4  McCord, 
26.  Of  these  the  leading  case  is  Byrd  v.  Boyd;  the  others  simply 
follow  it.  In  Byrd  v.  Boyd  the  court  evidently  legislates  the  excep- 
tion into  the  law,  and  so,  in  effect,  declared ;  for,  after  referring 
to  the  rule  of  the  common  law,  the  court  proceeds  to  say,  "There  is, 
however,  a  third  class  of  cases  for  which  it  is  necessary  to  provide," 
and  then  declares  that  these  cases  for  which  it  is  necessary  for  the 
court  "to  provide"  are  "those  where  the  employer  reaps  the  full  bene- 
fit of  the  services  which  have  been  rendered,  but  some  circumstance 
occurs  which  renders  his  discharging  the  overseer  necessary  and 
justifiable;  and  that,  perhaps,  not  immediately  connected  with  the 
contract,  as  in  the  present  case." 
Judgment  reversed. 

Falls  Mfg.  Co.,  35  Me.  447,  58  Am.  Dec.  718  (1853) ;    Richardson  v.  Woehler, 
26  Mich.  90  (1872). 

If  an  agent  abandons  his  undertaking  lie  will  not  be  entitled  to  commis- 
sions, if  his  principal  afterwards  contracts  with  the  third  party.  Scoville  v. 
Trustees  of  Schools,  65  111.  523  (1872) ;  Warren  v.  Rendrock  Powder  Co.,  56 
Hun,  849,  9  N.  Y.  Supp.  842  (1890).  On  the  other  hand,  if  the  contract  pro- 
vides for  payment  in  installments,  the  agent  may  recover  the  iustalhiicnts 
already  earned,  notwithstanding  his  refusal  to  complete  the  service.  Taylor 
V.  Laird,  1  H.  &  N.  266;  Cunningham  v.  Morrell,  10  Johns.  203,  6  Am.  Dec. 
332  (1813).  And  by  the  better  rule,  if  the  agent  have  a  sufficient  excuse  for 
failure  to  complete  the  service,  as  sickness,  he  can  recover  what  his  services 
are  worth  to  the  principal,  deducting  any  damages  sustained  by  the  termina- 
tion of  the  relation.  Wolfe  v.  Howes,  20  N.  Y.  197,  75  Am.  Dec.  388  (1859); 
Patrick  v.  Putnam,  27  Vt.  759  (1855) ;  Patterson  v.  Gage,  23  Vt.  558,  56  Am. 
Dec.  96  (1851).  A  mere  temporary  absence,  particularly  for  cause,  may  not 
amount  to  an  abandonment.  Thrift  v.  Payne,  71  111.  408  (1874).  The  death 
of  the  agent  before  the  completion  of  the  services  is  regarded  as  an  act  of 
Cod  which  it  is  fair  to  assume,  as  an  implied  term  of  the  contract,  the  par- 
ties intended  should  excuse  nonperformance.  The  contract  is  broken  and 
recovery  may  be  had  in  quantum  meruit,  not  in  excess  of  the  contract  price, 
for  the  work  performed,  sul).j<'ct  to  deductions  from  any  damage  the  princi- 
pal suffered  because  the  agent  was  unable  to  complete  the  service.  Clark  v. 
Gilbert,  26  N.  Y.  279,  S4  Am.  Dec.  189  (1863) ;  WTolfe  v.  Howes,  20  N.  Y.  197, 
75  Am.  Dec.  388  (1859). 


i)iS  KFFKCTS   AND   CONSlCgUKM'KS   OF   TIIH    UKLATION  (i'urt   3 


IIAITL  V.  Kiaj.OGG.^i 

(Court  of  Civil   Apporils  of  Texas.  Fourth  District,   1000.     42  Tox.  Civ.  App. 

(•.;'.(;,  t)4  S.  W.  .'{SO.) 

llahl  sold  1,000  acres  of  land  for  Kclloo-.<v  at  $29,500.  Ik-  tcle- 
graiihci.l,  "Sold  your  land  twenty-two  thousand  to  you."  Kellogg 
understood  this  to  mean  $22,000,  plus  the  agent's  commission  of 
$1,000,  and  accepted.  When  he  learned  the  true  price  he  sued  Hahl 
for  $7,500. 

Xeill,  J.^-  *  *  *  jt  js  hardly  necessary  to  state  the  law  ap- 
plicable to  the  facts  disclosed  by  this  record.  It  has  been  known  and 
recognized  by  mankind  throughout  all  the  ages.  It  is  written  in  the 
Ten  Commandments,  on  the  Twelve  Tables,  in  the  laws  of  every 
nation,  and  in  the  heart  of  every  man.  Nor  is  it  necessary  to  state 
that  the  relation  of  principal  and  agent  is  fiduciary,  requiring  the 
most  perfect  loyalty  and  the  utmost  good  faith,  the  strictest  integrity, 
and  the  fairest  dealing  on  the  part  of  the  agent  to  his  principal.  Per- 
ry on  Trusts,  §  206;  Bigel.  on  Fraud,  295;  Kerr  on  Fraud,  152,  182; 
Whart.  Ag.  244.  245 ;  Mech.  Ag.  §§  465,  469,  470,  643.  Therefore, 
from  the  principles  of  law  and  equity  applicable  to  the  facts  in  this 
case,  it  follows  that  the  court  did  not  err,  as  is  urged  in  plaintifT  in 
error's  assignments,  in  rendering  judgment  in  favor  of  plaintiff 
against  Hahl  for  $6,500.  This  disposes  of  the  assignments  of  error 
of  the  plaintifif  in  error. 

By  defendant  in  error's  cross-assignments  it  is  contended  that  the 
court  erred  in  not  rendering  judgment  in  his  favor  of  $7,500,  for  the 
reason  that  Hahl,  as  an  agent,  was  guilty  of  such  fraud,  gross  mis- 
conduct, and  bad  faith  to  his  principal  as  to  deprive  him  of  the  right 
to  compensation  for  his  services.  Upon  the  question  presented  by 
this  assignment,  the  trial  judge  expressed  doubt,  not  as  to  the  facts, 
but  as  to  the  law,  upon  which  he  deemed  the  authorities  conflicting 
and  resolved  the  doubt  in  favor  of  the  defendant.  The  rule  upon  this 
question,  as  we  understand  it,  is  that,  where  an  agent  is  guilty  of  such 
misconduct  as  amounts  to  treachery,  or  has  wholly  failed  to  recognize 
the  duties  and  responsibilities  imposed  upon  him  by  his  situation,  he 
should  receive  no  compensation  whatever.  Mechem  on  Agency,  § 
619;  Story  on  Agency,  §§  333,  334;  Brannan  v.  Strauss,  75  111.  234; 
Myers  v.  Walker,  31  111.  354;    Sumner  v.  Reicheniker,  9  Kan.  320; 

11  Accord:  ITumphroy  v.  Eddy  Traiisp.  Co.,  107  Mich.  163,  65  N.  W.  13 
(1895).  For  gross  neffligcnce  or  inisconduct  the  a{,'ent  may  not  merely  lose 
his  commissions,  but  be  liable  to  his  principal  for  daniaKcs  sustained  thereby, 
or  for  interest  on  money  in  the  aj,'ent's  hands  and  not  reported  to  the  princi- 
pal. Sidway  v.  Am.  Mtj;.  Co.,  2L'2  III.  270,  78  N.  K.  ,^)(;i  (V.)(\v>).  allinniiiK  110 
111.  App.  502  n005);  I'orter  v.  Silvers.  35  Ind.  295  (1871);  Schleifenbaum  v. 
liundbaken,  81  Conn.  623,  71  Atl.  899  (1909).  Illegal  agencies,  see  ante, 
pp.  40,  43. 

12  Part  of  the  opinion  is  omitted. 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  G19 

Cleveland  &  St.  L-  R.  Co.  v.  Pattison,  15  Ind.  70;  Vennum  v.  Greg- 
ory, 21  Iowa,  328;  Sea  v.  Carpenter,  16  Ohio,  412;  Libhart  v.  Wood, 
1  \\'atts  &  S.  265,  37  Am.  Dec.  461;  Segar  v.  Parrish,  20  Grat.  672; 
Xeilson  v.  Bowman,  29  Grat.  732;  Jackson  v.  Pleasanton,  101  Va. 
2S2,  43  S.  E.  574;  Jansen  v.  Williams,  36  Neb.  869,  55  N.  W.  279, 
20  L.  R.  A.  207;  Peterson  v.  Mayer,  46  I^Iinn.  468,  49  N.  W.  245, 
13  L.  R.  A.  72;  Lahr  v.  Kraemer,  91  Minn.  26,  97  N.  W.  419.  "To 
this  extent,"  says  Mechem  on  Agency,  "the  law  is  well  settled."  And, 
after  an  extensive  examination  of  the  authorities,  the  writer  has 
been  unable  to  find  or  recall  an  exception  to  the  principle  as  stated. 
Wherefore,  we  conclude  that  the  defendant  was  not,  under  the  facts 
in  this  case,  entitled  to  retain  $1,000  as  commission  for  the  sale;  and 
that  the  judgment  should  have  been  for  that  sum  in  addition  to  the 
$6,500.  Therefore,  the  judgment  will  be  amended  by  adding  that  sum 
to  the  amount  rendered  by  the  trial  court,  thus  making  the  judgment 
in  favor  of  plaintiff  against  the  defendant  Hahl  $7,500,  and  as  so 
amended  the  judgment  is  afifirmed.^^ 


III.  When  the  Agent  is  Discharged 


MACFARREN  v.  GALLINGER. 

(Supreme  Court  of  Pennsylvania,  1904.     210  Pa.  74,   59  Atl.  435,  affirming 
.31  Pittsb.  Leg.  J.  [N.  S.]  390.) 

Bill  in  equity  for  an  account.  Plaintiffs  were  employed  by  defend- 
ant to  sell  lots. 

Per  Curiam.  The  contract  was  one  of  agency  only,  and  therefore 
revocable  at  any  time  for  good  cause.  A  very  material  stipulation 
""oniie'contract  was  that  plaintiffs  should  "deposit  daily  all  money 
received"  to  the  order  of  defendant,  and,  this  not  being  done,  de- 
fendant terminated  the  agreement  and  took  charge  of  the  business 
himself.  The  finding  of  the  court  below  on  this  point  is  that,  "while 
the  terminating  of  the  contract  may  have  resulted  in  loss  to  plaintiffs, 
"fliey'alone  are  responsible  for  this  loss.  The  agreement  does  not 
provide  for  a  commission  upon  all  lots  sold  by  plaintiffs;  it  provides 
for  the  payment  to  them  by  defendant  of  25  per  cent,  of  moneys  col- 
lected and  paid  over  flaily,  which  25  per  cent,  is  to  be  in  full  of  all 
demands  for  compensation.  This  agreement,  at  least  to  the  extent 
that  it  requires  daily  payments,  was  almost  continuously  violated  by 
plaintiffs  from  the  time  the  first  payments  were  made  to  them  under 
its  terms  until  its  termination." 

isTlic  oi»iiii(in  on  ictii-Mrin;:  is  ninittrd. 


Gl!U  EFFECTS   AND   CONSHQUKNCKS   OF  THE    llELATION  (Part   3 

An  account  having;  been  stated,  it  appeared  that  plaintiffs  were 
indebted  to  defendant  in  a  greater  am  i-it  tlian  the  commissions  re- 
tained by  the  latter.    The  bill,  thereftn-c,  was  properly  dismissed. 

Decree  affirmed,  at  costs  of  appellants. 


HILDEBRAND  v.  AMERICAN  FINE  ARTS  CO. 

(Supreme  Court  of  Wisconsin,  1901.    109  Wis.  171,  85  N.  W.  268,  53  U  R.  A. 

82G.) 

Suit  by  plaintiff,  as  administratrix  of  the  estate  of  Alfred  L.  Hil- 
debrand,  deceased,  for  damages  for  breach  of  a  contract  whereby 
defendant  agreed  to  employ  deceased  as  salesman  for  defendant  for 
one  year  from  January  1,  1897.  June  9,  1897,  deceased  was  dis- 
charged without  his  consent.  Defendant  alleged  that  the  discharge 
was  for  disobedience,  negligence  and  because  of  the  dissolute  habits 
of  deceased. 

Marshall,  J.^*  *  *  *  'pj^g  ^q]q  defense  to  plaintiff's  claim 
pleaded  in  the  answer,  that  was  supported  by  evidence  on  the  trial, 
and  was  then  and  is  now  insisted  upon,  is  that  the  contract  of  em- 
ployment was  entire  and  was  terminated  for  cause. ^^  It  is  claimed  that 
the  rule,  that  where  an  employe  wrongfully  lierminates  such  a  con- 
tract he  cannot  recover  upon  it  for  services  rendered,  applies  to  a  case 

1*  Part  of  the  opinion  is  omitted. 

15  As  to  tlie  riirlit  of  the  asjent  to  compensation  when  he  is  discharged,  see 
(.'.lover  V.  Ileuder.son,  120  Mo.  3U7,  25  S.  W.  175,  41  Am.  St.  Rep.  095  (1894) 
ante.  p.  229 ;  Sheahan  v.  National  S.  S.  Co.,  87  Fed.  1G7,  30  C.  C.  A.  593,  ante, 
p.  227. 

Accord:  Royal  Remedy  Co.  v.  Gregory  Grocer  Co.,  90  Mo.  App.  53  (1901); 
Strong  V.  West,  110  Ga.  382,  35  S.  E.  cm  (1900),  in  wliicli  the  court  says: 
"Where  an  agency  is  prematurely  terminated  by  the  act  of  the  principal,  the 
agenfs  right  of  recovery  is  measured  by  the  terms  of  the  agreement.  See  1 
Am.  &  Eng.  Enc.  Law  (1st  Ed.)  p.  :^.n9.  and  authorities  cited  in  note  3.  It  ap- 
pears in  this  case  that  the  work  of  getting  possession  of  the  property  as  to 
which  Mrs.  Strong  was  equital)ly  entitled  to  be  subrogated  to  the  rights  of  the 
Lombard  Company  was  rendered  very  difticidt  on  account  of  the  failure  of 
the  Lombard  CouKijany  to  pass  to  her  the  legal  title,  but  this  was  tinully  acc-om- 
plished  by  West,  who,  after  recovei-y,  was  in  possession  with  the  right  to  make 
a  sale.  It  does  not  appear  that  lie  was  mismanaging  the  propt'rty  in  any  re- 
spect, nor,  with  any  degree  of  certainty,  that  he  could  not  have  inade  a'sale 
for  a  sufficient  amount  to  have  paid  the  debt  and  reimbursed  himself.  Under 
tlie  terms  of  his  contract  he  was  entitled  to  a  full  opportunity  to  luMng  about 
this  result,  and  when  he  was  deprived  of  this  right  by  the  explicit  directions 
of  Mrs.  Stnmg  that  the  jiroperty  should  be  taken  from  bis  liands  and  turned 
over  to  a  real-estate  agent  of  her  own  .seleclion  she  tbiTclty  deiirived  West 
of  the  means  to  which  be  had  agreed  to  look  for  reinil)urs'emcnl  under  tbe 
terms  of  the  original  contract,  and,  having  done  so,  she  became  liable  to  pay 
him  for  his  services." 

Cf.  MilUgan  v.  Owen,  123  Iowa,  285,  98  N.  W.  792  (1904)  in  which  the  prin- 
cipal gave  the  agent  no  definite  assurance  for  the  continuance  of  the  agency. 

The  burden  of  showing  that  the  agency  was  revoked  before  the  expiration 
of  a  reasonable  time  rests  on  the  defendant.  HoUingsworth  v.  Young  Coun- 
ty, 40  Tex.  Civ.  App.  r/j(),  91  S.  W.  1094  (1905). 


Ch.  2)  DUTIES    AND    LIABILITIES    OP    PRINCIPAL    TO    AGENT  621 

where  such  a  contract  has  been  terminated  by  the  employer  for  cause. 
Counsel  for  respondent  seems  to  concede  that  such  is  the  law.  In 
that  view  it  is  insisted  upon  one  side  that  the  evidence  shows  con- 
clusively that  the  contract  was  entire,  and  therefore  that  plaintiff 
cannot  recover ;  and  upon  the  other  that  it  was  not  entire,  and  there- 
fore that  the  judgment  is  right.  Whether  the  trial  court  considered 
the  turning  point  in  the  case  to  be  the  one  in  controversy  between 
counsel  and  decided  it  in  respondent's  favor,  and  in  that  way  reached 
the  conclusion  embodied  in  the  judgment,  does  not  definitely  appear. 
Both  counsel  have  misconceived  the  principles  governing  the  facts 
of  this  case.  The  rule  that  an  action  cannot  be  maintained  by  an 
employe  upon  an  entire  contract  without  first  fully  performing  on 
his  part,  does  not  apply  where  such  performance  is  prevented  by  the 
employer,  though  such  prevention  be  for  cause.  In  the  leading  case 
in  this'  court  on  the  scope  of  the  rule  contended  for,  Diefenback  v. 
Stark,  56  Wis.  462,  468.  14  N.  W.  621,  43  Am.  Rep.  719,  it  was  rec- 
ognized that  the  rule  does  not  apply  where  performance  is  prevented 

"^y  act  of  God  or  the  conduct  of  the  party  charged  with  the  liability. 

^TrTMechem,  Ag.  §  435,  it  is  said  that  the  rule  that  no  recovery  can 
be  had  on  an  entire  contract,  without  full  performance,  does  not  ex- 

""tend  to  those  cases  where  the  contract  between  the  employer  and 
employe  is  terminated  by  consent  of  the  employer. 

In  England  it  appears  that  if  an  employe  is  prevented  from  carry- 
ing out  his  contract  to  the  end,  because  of  the  conduct  of  his  em- 
ployer in  discharging  him  for  cause,  he  cannot  recover  for  services 
rendered  up  to  the  time  of  the  discharge.  Smith,  Mast.  &  S.  (Ed. 
1895)  pp.  220-222 ;  Wood,  Mast.  &  S.  §  129.  But,  generally  speak- 
ing, such  is  not  the  law  in  this  country.  Id.  §  130;  14  Am.  &  Eng. 
Enc.  Law,  p.  793,  and  cases  cited;  2  Suth.  Dam.  (2d  Ed.)  p.  1546; 
Taylor  v.  Paterson,  9  La.  Ann.  251 ;  Lawrence  v.  Gullifer,  38  Me. 
532.  The  rule  in  England  and  this  country  is  thus  stated  by  Wood 
on  Master  &  Servant,  at  section  84:  "If  the  contract  is  for  a  term, 
although  the  rate  of  compensation  is  at  so  much  a  day,  week  or 
month,  yet  if  the  contract  is  silent  as  to  the  time  of  payment,  it  is 
entire  and  indivisible,  and  full  performance  must  precede  a  right  of 
recovery,"  in  the  absence  of  circumstances  showing  that  the  contract 

"^waTnot  understood  by  the  parties  as  entire.  "So  inexorable  has 
thi.s  rule  been  regarded  in  England  that  it  has  been  held  that  where 
a  servant  hired  for  a  term  dies  before  full  performance,  no  recovery 
could  be  had  by  his  executors  for  the  wages  earned  at  the  time  of 
his  death,  and  the  same  rule  is  held  in  the  case  of  a  servant  dismissed 
for  cause.  Rut  such  is  not  now  the  rule  in  this  country,  but  in  all 
cases  wluTc  the  servant  is  preventcfl  from  performing  his  contract, 
either  by  sickness  or  death,  or  by  reason  of  being  discharged  from 
the  service,  whether  rightfully  or  not,  he  is  entitled  to  recover  for 
the  services  actually  rendered." 


(»22  EFFKCTS    AND    CONSKQl  KNCKS    OF   TUF    UKr..VriON  (Part    3 

Circunistaiiccs  may  exist  that  will  enable  an  cniploycr,  who  has 
disohar^^wl  an  t-niploye  for  cause,  lo  ileleat,  in  whole  or  in  part,  any 
elaini  for  waives  up  to  the  time  of  the  disohar.ue,  but  the  mere  fact 
that  the  contract  is  entire  will  not  give  him  that  power.  He  may 
recoup  sucli  damages  as  are  allowable  to  him  in  such  a  case  uricter 
the  rules  of  law,  because  of  the  conduct  of  the  employe  rendering 
his  discharge  necessary.  Thit  they  must  be  claimed  in  the  pleading 
and  established  on  the' trial.  Mechem,  Ag.  §  619;  Suth.  Dam.,  su- 
pra; Newman  v.  Reagan,  63  Ga.  755.  The  text  in  Sutherland  is  well 
supported  by  the  notes  and  is  as  follows :  "The  general  rule,  when  a 
servant  is  discharged  for  cause,  is  to  allow  him  his  wages  to  the  time 
of  discharge,  subject  to  deductions  for  his  torts  and  deficiencies." 
No  such  damages  were  claimed  here.  On  the  contrary,  as  we  have 
seen,  it  w-as  conceded  on  the  trial  that  plaintiff  was  entitled  to  the 
judgment  rendered,  unless  precluded  therefrom  by  reason  of  the  con- 
tract of  employment  being  entire. 

There  is  danger,  as  is  evidenced  by  this  case,  of  confusing  the  law 
applicable  to  a  case  where  an  employe  under  an  entire  contract  vol- 
untarily abandons  it,  and  that  applicable  where  such  an  employe  is 
prevented  from  carrying  out  his  contract  by  the  justifiable  conduct 
of  his  employer  in  discharging  hiin.  In  the  former  case  he  cannot 
maintain  an  action  upon  the  contract  at  all ;  in  the  latter  he  can  main- 
tain such  an  action  for  wages  up  to  the  time  of  the  discharge,  sub- 
ject, however,  to  the  right  of  the  employer  to  recoup  damages. 

What  has  been  said  does  not  militate  at  all  against  the  general 
rule  laid  down  in  Diefenback  v.  Stark,  supra,  to  the  effect  that  when 
a  contract  is  entire,  the  consideration  moving  from  each  party  to 
the  other  is  entire,  and  their  rights  are  reciprocal,  full  performance 
by  one  being  requisite  to  his  claiming  any  benefit  under  the  contract 
from  the  other.  However,  like  most  general  rules,  it  admits  of  ex- 
ceptions, and  there  are  several  of  them,  one  being  that  which  is  the 
key  to  plaintiff's  right  of  recovery  here,  viz. :  The  condition  prece- 
dent, of  full  performance  by  one  party,  is  waived  if  the  contract  be 
terminated  by  the  other  party,  regardless  of  whether  it  is  by  his 
mere  consent  or  by  his  rightfully  or  wrongfully  preventing  such  per- 
formance. The  only  bearing  the  cause  for  terminating  an  entire 
contract  by  one  party  has  on  the  rights  of  the  other  seeking  com- 
pensation for  what  he  has  done  under  it,  may  be  stated  as  follow^s : 
If  one  party  to  a  contract  withdraws  from  it  by  consent  of  the  other 
after  part  performance  thereof,  he  can  recover  for  what  he  has  done 
at  the  contract  rate.  If  a  party  to  an  entire  contract,  after  part  per- 
formance thereof  by  him,  be  prevented  by  the  wrongful  conduct  of 
the  other  from  rendering  to  such  other  complete  performance,  he 
can  recover  upon  the  contract  for  what  he  has  done,  at  the  contract 
rate,  and  his  damages  for  not  being  allowed  to  fully  perform,  not 
exceeding  the  full  amount  he  could  have  earned  by  such  perform- 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  G23 

ance.  If,  after  part  performance  of  such  a  contract  by  one  party, 
he  is  rightfully  prevented  by  the  other  from  further  performance,  he 
can  recover  on  the  contract  for  the  part  performance,  not  exceeding 
the  contract  rate,  being  liable  to  respond  in  damages  to  the  adverse 
party  to  the  amount  of  the  latter's  legal  damages  caused  by  the  acts 
that  justified  the  termination  of  the  contract. 

The  foregoing  is  in  harmony  with  Walsh  v.  Fisher,  102  Wis.  172, 
78  N.  W.  437,  43  L.  R.  A.  810,  72  Am.  St.  Rep.  865 ;  Winkler  v. 
Carriage  Co.,  99  Wis.  184,  74  N.  W.  793 ;  Dickinson  v.  Plow  Co., 
101  Wis.  157,  76  N.  W.  1108;  and  other  cases  decided  by  this  court. 
In  this  class  of  cases  it  is  said  the  basis  of  recovery  is  the  contract, 
though  the  amount  recoverable  is  by  no  means  absolutely  fixed  there- 
by. It  prima  facie  furnishes  the  standard  from  which  to  compute  the 
value  of  the  claimant's  services,  and  while  the  recovery  cannot  ex- 
ceed the  amount  computable  by  such  standard  it  may  be  reduced  by 
damages  suffered.  The  rule  is  laid  down  in  Wood,  INIast.  &  S.,  at 
section  130,  thus:  "A  dismissal  for  cause  before  the  expiration  of 
the  term  does  not  operate  as  a  rescission  of  the  contract  so  as  to  ena- 
ble the  servant  to  sue  upon  quantum  meruit.  He  must  either  sue 
upon  the  contract  or  for  damages  for  its  breach,  and  in  cither  event 
the  result  of  his  recovery  is  the  contract  price,  subject  to  such  de- 
ductions as  the  master  is  legally  entitled  to."  That  is  to  say,  while 
the  person  dismissed  from  service  for  cause  cannot  sue  upon  a  quan- 
tum meruit,  his  recovery  must  be  upon  a  quantum  meruit  on  the  con- 
tract basis,  it  being  presumed  that  he  earned  and  deserves  the  con- 
tract price  for  the  time  his  services  continued,  till  the  contrary  be 
shown  by  evidence  establishing  a  riglit  to  deductions  therefrom  as 
recoverable  damages.  In  short,  as  said  by  one  of  the  authorities 
above  quoted,  the  discharged  servant  is  entitled  in  any  event  "to  his 
wages  to  the  time  of  his  discharge,  but  subject  to  deductions  for  his 
torts  and  deficiencies."  ^® 

It  follows  from  the  principles  stated  that  the  judgment  appealed 
from  is  right,  regardless  of  any  question  presented  in  the  briefs  of 
counsel  for  either  side.  Plaintifif's  intestate,  after  part  performance 
of  his  contract  with  appellant,  was  for  good  cause  prevented  from 
completing  his  term.  Such  performance,  at  the  contract  rate,  with 
interest,  amounted  to  the  sum  for  which  judgment  was  rendered. 
No  damages  were  claimed  for  the  acts,  of  which  the  intestate  was 
"jiTfrtTrv,  "flia't  necessitated  his  discharge.  That  being  the  situation  at 
TlTC^tttiic  the  judgment  was  ordered,  there  was  nothing  before  the 
conrt  entitling  appellant  to  any  diminution  of  the  amount  earned 
by  the  intestate  at  the  contract  rate. 

The  judgment  of  the  circuit  court  is  affirmed. 

in  .\<<(,r(l:     Slmt.'  v.   McVitli;  (Tox.  Civ.  App.)   71i  S.  W.  A'.)?,  (100.'}). 


tl2:t  EFFECTS  AND   CONSEQUENCES   OP  THE    RELATION  (Part  3 


McMULLAN  v.  DICKINSON  CO. 

(Supronio  Court  of  Miiinosota,  isn5.    60  Minn.  15(!,  Cli  N.  W.  120,  27  L.  R,  A. 
409,  51  Am.  St.  R«m».  511.) 

C.vxTY,  J.  On  the  25th  of  February,  1892,  the  plaintiff  entered  into 
a  written  agreement  with  the  defendant  corporation,  whereby  it  agreed 
to  employ  him  as  its  assistant  manager,  from  and  after  that  date,  as 
long  as  he  should  own  in  his  own  name  50  shares  of  the  capital  stock 
of  said  corporation,  fully  paid  up,  and  the  business  of  said  corporation 
shall  be  continued,  not  exceeding  the  term  of  the  existence  of  said  cor- 
poration, and  pay  him  for  such  services  the  sum  of  $1,500  per  annum, 
payable  monthly  during  that  time,  and  whereby  he  agreed  to  perform 
said  services  during  that  time.  He  has  ever  since  owned,  as  provided, 
the  50  shares  of  said  stock,  and  performed  said  services  ever  since  that 
time  until  the  28th  of  October,  1893,  when  he  was  discharged  and  dis- 
missed by  the  defendant  without  cause.  He  alleges  these  facts  in  his 
complaint  in  this  action,  and  also  alleges  that  he  has  been  ever  since  he 
was  so  dismissed,  and  is  now,  ready  and  willing  to  perform  said  serv- 
ices as  so  agreed  upon,  and  that  there  is  now  due  him  the  sum  of  $125 
for  each  of  the  months  of  March  and  April,  1894,  and  prays  judgment 
for  the  sum  of  $250.  The  defendant  in  its  answer,  for  a  second  de- 
fense, alleges  that  on  March  2,  1894,  plaintiff  commenced  a  similar  ac- 
tion to  this  for  the  recovery  of  the  sum  of  $512,  for  the  period  of  time 
from  his  said  discharge  to  the  1st  of  March,  1894,  alleging  the  same 
facts  and  the  same  breach,  and  that  on  April  16,  1894,  he  recovered 
judgment  in  that  action  against  this  defendant  for  that  sum  and  costs, 
and  this  is  pleaded  in  bar  of  the  present  action.  The  plaintiff  demurred 
to  this  defense,  and  from  an  order  sustaining  the  demurrer  the  defend- 
ant appeals. 

The  plaintiff  brought  each  action  for  installments  of  wages  claimed 
to  be  due,  on  the  theory  of  constructive  service.  The  doctrine  of  con- 
structive service  was  first  laid  down  by  Lord  Ellenborough  in  Gandell 
v.  Pontigny,  4  Camp.  375,  and  this  case  was  followed  in  England  and 
this  country  for  a  long  time  (Wood,  Mast.  &  Serv.  254),  and  is  still 
upheld  by  several  courts  (Isaacs  v.  Davies,  68  Ga.  169;  Armfield  v. 
Nash,  31  Miss.  361 ;  Strauss  v.  Meertief,  64  Ala.  299,  38  Am.  Rep.  8). 
It  has  been  repudiated  by  the  courts  of  England  (Goodman  v.  Pocock, 
15  Adol.  &  E.  [N.  S.]  574;  Wood,  Mast.  &  Serv.  254),  and  by  many  of 
the  courts  in  this  country  (Id.;  and  notes  to  Decamp  v.  Hewitt,  11 
Rob.  [La.]  290,  43  Am.  Dec.  204),  as  unsound  and  inconsistent  with 
itself,  as  it  assumes  that  the  discharged  servant  has  since  his  discharge 
remained  ready,  willing,  and  able  to  perform  the  services  for  which 
he  was  hired,  while  sound  principles  require  him  to  seek  employment 
elsewhere,  and  thereby  mitigate  the  damages  caused  by  his  discharge. 
His  remedy  is  for  damages  for  breach  of  the  contract,  and  not  for 


^^yjU/^nr- 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  625 

wages  for  its  performance.  But  the  courts,  which  deny  his  right  to  re- 
cover wages  as  for  constructive  service,  have  denied  him  any  remedy 
except  one  for  damages,  which,  if  seemingly  more  logical  in  theory,  is 
most  absurd  in  its  practical  results.  These  courts  give  him  no  remedy 
except  the  one  which  is  given  for  the  recovery  of  loss  of  profits  for 
the  breach  of  other  contracts,  and  hold  that  the  contract  is  entire, 
even  though  the  wages  are  payable  in  installments,  and  that  he  ex- 
hausts his  remedy  by  an  action  for  a  part  of  such  damages,  no  matter 
how  long  the  contract  would  have  run  if  it  had  not  been  broken.  See 
James  v.  Allen  Co.,  44  Ohio  St.  226,  6  N.  E.  246,  58  Am.  Rep.  821 ; 
Moodv  V.  Leverich,  4  Dalv,  401 ;  Colburn  v.  Woodworth,  31  Barb. 
381 ;  Booge  v.  Railroad  Co.,  33  Mo.  212,  82  Am.  Dec.  160. 

No  one  action  to  recover  all  the  damages  for  such  a  breach  of  such 
a  contract  can  furnish  any  adequate  remedy,  or  do  anything  like  sub- 
stantial justice  between  the  parties.  By  its  charter  the  life  of  this  cor- 
poration is  thirty  years.  If  the  action  is  commenced  immediately  aft- 
er the  breach,  how  can  prospective  damages  be  assessed  for  this  thirty 
years,  or  for  even  one  year?  To  presume  that  the  discharged  servant 
will  not  be  able  for  a  large  part  of  that  time  to  obtain  other  employ- 
ment, and  award  him  large  damages,  might  be  grossly  unjust  to  the 
defendant.  Again,  the  servant  is  entitled  to  actual  indemnity,  not  to 
such  speculative  indemnity  as  must  necessarily  be  given  by  awarding 
him  prospective  damages.  His  contract  was  not  a  speculative  one,  and 
the  law  should  not  make  it  such.  That  men  can  and  do  find  employ- 
ment is  the  general  rule,  and  enforced  idleness  the  exception.  It 
should  not  be  presumed  in  advance  that  the  exceptional  will  occur. 
This  is  not  in  conflict  with  the  rule  that,  in  an  action  for  retrospective 
damages  for  such  a  breach,  the  burden  is  on  the  defendant  to  show 
that  the  discharged  servant  could  have  found  employment.  In  that 
case,  as  in  others,  reasonable  diligence  will  be  presumed.  When  it  ap- 
pears that  he  has  not  found  employment  or  been  employed,  there  is  no 
presumption  that  it  was  his  fault,  and,  under  such  circumstances,  it 
will  be  presumed  that  the  exceptional  has  happened.  But  to  presume 
that  the  exceptional  will  happen  is  very  different.  In  an  action  for 
such  a  breach  of  a  contract  for  services,  prospective  damages  beyond 
the  day  of  trial  are  too  contingent  and  uncertain,  and  caimot  be  as- 
sessed. 2  Suth.  Dam.  471;  Gordon  v.  lircwstcr,  7  Wis.  355;  Fowler 
&  Proutt  V.  Armour,  24  Ala.  194;  Wright  v.  Falkncr,  37  Ala.  274; 
Colburn  v.  Woodworth,  31  Barb.  385. 

Then,  if  the  discharged  servant  can  have  but  one  action,  it  is  neces- 
sary for  him  to  starve  and  wait  as  long  as  possible  before  commencing 
it.  If  he  waits  longer  than  six  years  after  the  breach,  the  statute  of 
limitations  will  have  run,  and  he  will  lose  his  whole  claim.  If  he 
brings  his  action  within  the  six  years,  he  will  lose  his  claim  for  the 
balance  of  the  time  after  the  day  of  trial.  Under  this  rule,  the  measure 
Gor»i).rK.&  \. — 40 


<>:!(»  i:ri-i:(TS  and  ii)nsih.hi:mi:s  ok  tuk  kki-ation        (Tart  M 

of  (lainaijes  for  the  breach  of  a  30  year  conlract  is  no  greater  llian  for 
the  broach  of  a  6  or  7  year  contract.  Such  a  rcnuMly  is  a  travesty  on 
justice.  Ahhoucjh  the  servant  has  stipuhitcd  for  a  weekly,  monthly, 
or  quarterly  income,  it  assnmes  that  he  can  live  for  years  without  any 
income,  after  wiiich  time  he  will  cease  to  live  or  need  income.  The  fal- 
lacy lies  in  assuming:  that,  on  the  breach  of  the  contract,  loss  of  wages 
is  analogous  to  loss  of  profits,  and  that  the  same  rule  of  damages  ap- 
plies, while  in  fact  the  cases  are  wholly  dissimilar,  and  there  is  scarcely 
a  parallel  between  them.  In  the  one  case  the  liability  is  absolute ;  in 
the  other  it  is  contingent.  If  the  rule  of  damages  were  the  same,  then, 
in  the  case  of  the  breach  of  the  contract  for  service,  the  discharged 
servant  should  be  allowed  only  the  amount  which  the  stipulated  wages 
exceed  the  market  value  of  the  service  to  be  performed,  without  regard 
to  whether  he  could  obtain  other  employment  or  not.  If  the  stipulated 
wages  did  not  exceed  the  market  value  of  the  service,  he  would  be  en- 
titled to  only  nominal  damages;  and  in  no  case  could  his  failure  to 
find  other  employment  vary  the  measure  of  damages.  Clearly,  this  is 
not  the  rule.  In  the  one  case  the  liability  is  a  contingent  liability  for 
loss  of  wages ;  in  the  other  case  it  is  an  absolute  liability  for  loss  of 
profits.  Such  contingent  liability  cannot  be  ascertained  in  advance  of 
the  happening  of  the  contingency,  and  that  is  why  prospective  damages 
for  loss  of  wages  are  too  contingent  and  are  too  speculative  and  un- 
certain to  be  allowed,  while  retrospective  damages  for  such  loss  are  of 
the  most  certain  character.  On  the  other  hand,  if  damages  for  loss  of 
profits  are  too  speculative  and  uncertain  to  be  allowed,  they  are  equal- 
ly so,  whether  prospective  or  retrospective.  "The  pecuniary  advan- 
tages which  would  have  been  realized  but  for  the  defendant's  act  must 
be  ascertained  without  the  aid  which  their  actual  existence  would 
afiford.  The  plaintiff's  right  to  recover  for  such  a  loss  depends  on  his 
proving  with  sufificient  certainty  that  such  advantages  would  have  re- 
sulted, and,  therefore,  that  the  act  complained  of  prevented  them."  1 
Suth.  Dam.  (1st  Ed.)  107. 

It  is  our  opinion  that  the  servant  wrongfully  discharged  is  entitled  to 
indemnity  for  loss  of  wages,  and  for  the  full  measure  of  this  indemnity 
the  master  is  clearly  liable.  This  liability  accrues  by  installments  on 
successive  contingencies.  Each  contingency  consists  in  the  failure  of 
the  servant  without  his  fault  to  earn,  during  the  installment  period 
named  in  the  contract,  the  amount  of  wages  which  he  would  have 
earned  if  the  contract  had  been  performed,  and  the  master  is  liable  for 
the  deficiency.  This  rule  of  damages  is  not  consistent  with  the  doc- 
trine of  constructive  service,  but  it  is  the  rule  which  has  usually  been 
applied  by  the  courts  which  adopted  that  doctrine.  Under  that  doc- 
trine the  master  should  be  held  liable  to  the  discharged  servant  for 
wages  as  if  earned,  while  in  fact  he  is  held  only  for  indemnity  for  loss 
of  wages.  The  fiction  of  constructive  service  is  false  and  illogical,  but 
the  measure  of  damages  given  under  that  fiction  is  correct  and  logi- 


Ch.  2)  DUTIRS    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  0l!7 

cal.^'  It  is  simply  a  case  of  a  wrong:  reason  oiven  for  a  correct  rule. 
Instead  of  rejecting  the  false  reason  and  retaining  the  correct  rule, 
many  courts  have  rejected  both  the  rule  and  the  reason.  In  our  opin- 
ion, this  rule  of  damages  should  be  retained ;  but  the  true  ground  on 
which  it  is  based  is  not  that  of  constructive  service,  but  the  liability  oi 
the  master  to  indemnify  the  discharged  servant,  not  to  pay  him  wage?, 
and  this  indemnity  accrues  by  installments.  The  original  breach  is  not 
total,  but  the  failure  to  pay  the  successive  installments  constitutes  suc- 
cessive breaches.  Since  the  days  of  Lord  EUenborough  this  class  o£ 
cases  has  been  in  some  courts  an  exception  to  the  rule  that  there  can 
be  but  one  action  for  damages  for  the  breach  of  a  contract,  and  there 
are  strong  reasons  why  it  should  be  an  exception.  Because  the  dis- 
charged servant  may,  if  he  so  elects,  bring  successive  actions  for  the 
installments  of  indemnity  as  they  accrue,  it  does  not  follow  that  ho 
cannot  elect  to  consider  the  breach  total,  and  bring  one  action  for  all 
his  damages,  and  recover  all  of  the  same  accruing  up  to  the  time  of 
trial.  Fowler  &  Proutt  v.  Armour,  24  Ala.  194;  Strauss  v.  Meertief, 
64  Ala.  299,  38  Am.  Rep.  8.  Rut  the  wrongdoer  can  have  no  such 
election.  He  should  not  be  allowed  to  take  advantage  of  his  own 
wrong,  and,  for  the  purpose  of  preventing  the  use  of  any  ade(|uattf 
remedy  and  defeating  any  ade(|uate  recovery,  to  insist  that  his  own 
breach  is  total. 

The  order  appealed  from  should  be  aftirnied.    So  onlered. 


wi«ii,i\.i|,     (lull      \y'     yi\. 

After  taking  twenty-  J 
(intract  was  annullc<l.  / 
There  was  no  wry 


MERRIMAX  V.  McCORMICK  II.\RVKSTIXC  MACIT.  CO. 

(Supreme  Court  of  Wisconsin,  IS'iT.    J>t!  Wis.  (HU).  71  .\.  W.  KCdj 

Action  to  recover  an  agent's  connnissions,  and  <laniages  for  fail- 
ure to  perform  contracts.  PlaintilTs  were  employed  to  sell  harvesiing 
machines  and  supplies,  to  house  the  machines  ordered,  and  to  <Ie 
liver,  set  up  and  fairly  start  every  machine  sold.  After  taking  twenty 
nine  orders,  plaintifTs  were  discharged,  and  the  cont 

WiNSLow,  J."*     [After  stating  the  facts:) 
serious  dispute  as  to  the  facts  of  llie  case,  nor  is  there  any  very  ma 
terial  difference  between  the  findings  of  fact  made  by  the  referee  an<l 
those  made  by  the  circuit  judge,  except  with  regard  to  the  failure  to 
fill  the  order  for  binding  twine,  which  will  be  considered  later;    bvii 

iTTlic  injustice  of  tlic  rule  pMicniily  folliiwcd,  ntul  tlif  inronslstcnfy  of  (In- 
(Irx'trino  <>f  constrnctivf  .Kcrvlcc  as  st-f  forlli  in  tin-  |irlncipiil  niso.  nrc  j:i>n<'nilly 
rorounizf'd.  Ncvrrfiu'less  tlu'  wi-l^lit  of  initliorlty  Is  airiilnsl  any  riM  oKnltlon 
of  <oiisfin<tiv»'  soivico,  «'Vt>n  as  a  inrasnio  of  (laMi.-iiros.  So*-  Ilic  full  ili-<  ii>» 
sions  in  OInistcad  v.  I'.a<li.  7S  Md.  l.'t'J.  UT  All.  .'.ol,  'S>  \..  H.  A.  71.  I»  Am 
St.  Hfp.  l.'7w  (is!»:;i;  Howard  v.  haly.  «il  .N.  Y.  :'.<1'_'.  1!»  Am.  Hep.  l.'.s.'i  (l>-7.'ii, 
and  especially  in  .lames  v.  Allen  Cnunly.  It  Oldo  St.  'l'H\.  ti  N.  K.  210,  5b  Auj. 
Kep.  S2\  (|ss7).     See.  also,  extended  note  in  r»l  Am.  St.  Kep-  •''I''». 

'"  I'art  of  the  oi)inlon  J.h  omitted. 


628  EFFECTS   AND   CONSKQI'KNtM'S   OF  TTllO    UKLATION  (Part   3 

there  was  a  radical  dilTcrcnce  between  llie  lei;al  conclusions  resulting 
from  the  facts.  The  referee  was  of  opinion  that  the  plaintiffs  were 
entitled  to  recover  their  full  commissions  upon  all  machines  for  which 
they  had  taken  orders,  except  when  they  afterwards  furnished  a  dif- 
ferent machine;  while  the  circuit  judi;e  concluded  that  they  were  en- 
titled to  no  compensation  for  their  services  in  obtaining  the  orders, 
save  for  the  one  machine  delivered  before  the  cancellation  of  the  con- 
tract. 

We  find  ourselves  unable  to  agree  with  either  conclusion.  We 
think,  under  the  provisions  of  the  contract,  the  plaintiffs  were  en- 
titled to  recover  the  reasonable  value  of  their  services  in  obtaining 
the  orders  for  machines  which  were  afterwards  actually  filled  with 
McCormick  machines,  and  no  more.  The  reason  for  this  conclu- 
sion we  will  briefly  state.  The  contract  provides  for  a  certain  com- 
mission upon  the  sale  of  each  machine,  which  is  to  be  earned,  not 
by  obtaining  the  order  alone,  but  by  receiving  and  housing  the  ma- 
chine, setting  it  up,  and  running  it,  instructing  the  purchaser,  receiv- 
ing and  transmitting  the  money  or  notes  therefor,  and  by  rendering 
other  services  connected  with  the  sale.  Manifestly  the  contract  is 
entire  as  to  each  commission,  and  is  not  earned  except  by  the  per- 
formance of  all  the  requirements.  Furthermore,  there  is  a  special 
provision  that  commissions  shall  only  be  paid  on  machines  sold  and 
settled  for,  and  none  shall  be  paid  on  orders  not  filled.  Had  the 
plaintiffs  brought  action  for  their  commissions  after  taking  the  or- 
ders, and  prior  to  the  cancellation  of  the  contract,  it  is  very  certain 
that  they  could  not  recover  them,  because  they  had  not  been  earned, 
nor  could  they  have  recovered  upon  quantum  meruit,  because  the 
contract  is  an  entire  contract  as  to  each  commission.  Now  the  the- 
ory upon  which  the  referee  allowed  the  entire  commission  was  that 
by  the  cancellation  of  the  contract  the  defendant  had  rendered  it  im- 
possible for  the  plaintiffs  to  carry  it  out,  and  hence  that  they  ought 
to  recover  the  full  commission,  because  they  were  ready  to  carry  it 
out,  but  were  prevented  by  the  defendant  from  doing  so. 

The  well-settled  rule  is  that  when  a  contractor's  performance  is 
stopped  by  the  fault  of  the  employer,  he  may  recover  upon  quantum 
meruit  for  what  he  has  done,  and  also  may  recover  damages  for 
being  prevented  from  completing  the  work.  2  Suth.  Dam.  (2d  Ed.) 
§  713.  But  this  second  element  of  damages,  i.  e.,  the  damages  re- 
sulting from  being  prevented  from  completing  the  work,  are  plainly 
given  because  of  the  wrongful  stoppage  of  the  work.  Where  the 
stoppage  is  absolutely  rightful,  and  in  strict  accord  with  contract 
provisions,  there  can  be  no  damages,  because  damages  do  not  arise 
from  the  proper  exercise  of  a  legal  right.  Now  in  the  present  case 
the  parties  had  agreed  that  the  defendant  might~at  any  time  end  the, 
contract,  and  take  into  its  possession  all  orders,  notes,  accounts,  mon^;;^ 
eys,  machines,  or  other  property  of  the  defenrlant  in  the  hands  of 


'  7 


Ch.  2)  DUTIES    AND    LIABILITIES    OP    PRINCIPAL    TO    AGENT  (J29 

the  plaintiffs.  The  provision  is  certainly  very  drastic,  but  it  is  ad- 
mittedly a  part  of  the  contract,  and  no  claim  of  fraud  or  mistake 
is  made  with  reference  to  it.  Under  these  circumstances,  the  court's 
duty  is  simply  to  construe  it.  It  was  put  in  the  contract  with  a  defi- 
nite purpose,  and  that  purpose  plainly  was  to  give  the  defendant 
power  to  end  the  agency  at  any  time,  and  place  the  entire  business 
in  other  hands.  This  power  must  be  reasonably  construed.  It 
should  not  be  construed  as  depriving  the  plaintiffs  of  reasonable  re- 
muneration for  their  services  already  rendered  in  obtaining  orders 
which  are  afterwards  filled  with  McCormick  machines,^®  but  it  cer- 
tainly must  be  construed  as  authorizing  the  defendant  lawfully  to  end 
the  agency  at  any  time,  and  thus  rightfully  to  prevent  the  earning 
of  the  full  commissions.  It  was  certainly  the  duty  of  the  plaintiffs 
to  surrender  up  the  orders  they  had  taken  to  the  defendant  when  the 
contract  was  canceled.  Not  only  does  the  contract  provide  that  they 
shall  do  so,  but  it  further  provides  that  they  shall  not  retain  any  of 
defendant's  property  in  their  hands  as  security  for  commissions.  We 
do  not  think,  however,  that,  where  it  can  be  shown  that  any  such 
order  was  afterwards  actually  filled  with  a  McCormick  machine,  this 
failure  of  duty  should  prevent  the  plaintiffs  from  recovering  the  rea- 
sonable value  of  their  services  in  obtaining  the  order.  As  it  cannot 
be  ascertained  from  the  evidence  just  how  many  of  the  orders  taken 
were  afterwards  filled  with  McCormick  machines,  nor  what  the  rea- 
sonable value  of  the  preliminary  canvassing  and  procuring  of  such 
orders  was,  further  testimony  must  needs  be  taken  upon  these  ques- 
tions.    *     *     * 

Reversed  and  remanded 


IV.  Commissions  to  rut  Agent 
GILLETT  V.  CORUM. 

(Supreme  Court  of  Kansas,  1871.     7  Kan.  156.) 

Brewer,  J.^"  This  case  comes  here  on  error  from  the  district 
court  of  Leavenworth  county,  this  being  its  second  visit  to  this  tribu- 
nal. 5  Kan.  G08.  On  the  first  trial  in  the  court  below,  judgment  was 
rendered  in  favor  of  the  plaintiff,  (defendant  in  error  here,)  which 
was  by  this  court  reversed  for  error  in  the  instructions.  On  a  sec- 
ond trial,  the  plaintiff  again  obtained  judgment,  which  judgment  is 
now  sought  to  be  reversed,  also  on  account  of  alleged  errors  in  the 

>»Tlie  dis<li;irf,'<'  of  an  Jicoiit  cjiiinot  nffcct  Ills  commissions  alroady  earned, 
thouKh  not  doe  until  the  dttlivciy  of  the  Koods  sold.  l)ibl)Ie  v.  Diiuirlc,  14:{ 
N.  Y.  540,  :\H  N.  E.  724  (ISIM),  allirniinK  4  .Ml.sc.  Hop.  190,  li.'J  N.  Y.  Supp.  (i.S(» 
(189.'?):  H\ni:or  MfR.  Co.  v.  Hrewfr,  7.S  Ark.  202,  m  S.  W.  755  (1900),  unless 
BO  sti(>ulat<d  In  the  contract  of  a«('n<y,  Wlieeler  &  Wilson  Mfg.  Co.  v.  Gal- 
11  van.  10  .\(.|).  :'.i:},  4  N.  W.  lOfJl   (ISSO). 

»«  I'art  of  the  opinion  Is  omitted. 


030  EFFECTS    ANH    CONSKQI'KNrKS   OF  TIIH    UKI.ATION  (1'art    3 

instructions.  The  action  Avas  brought  to  recover  for  services  alleged 
to  have  been  perforniecl  by  Corum  as  the  agent  of  Gillett,  in  the  sale 
of  a  tract  of  land.  These  facts  appear  from  the  testimony  without 
controversy:  (1)  'That  plaintiff  at  one  time  was  authorized  by  defend- 
ant to  act  as  his  agent  in  selling  the  land,  and  promised  compensation 
if  he  accomplished  a  sale;  (2)  that  he  had  some  negotiations  with  a 
man  named  Dunlap.  concerning  the  sale  of  said  land  during  the  con- 
tinuance of  such  authority ;  (3)  that  said  Dunlap  afterwards  purchased 
from  defendant,  personally,  said  land,  at  a  price  not  less  than  that  for 
which  plaintilY  was  authorized  to  sell ;  and  (4)  that  intermediate  the 
tirst  suggestion  by  plaintiti"  to  Dunlap  of  a  sale  of  this  land,  and  the 
final  consummation  of  the  sale  by  defendant,  Dunlap  was  absent  in 
the  southern  part  of  the  state,  for  a  few  days,  looking  at  land  there. 
There  is  a  dispute  in  the  testimony  as  to  whether  plaintiff's  authority 
as  agent  w-as  revoked  prior  to  the  sale ;  whether  negotiations  between 
plaintiti'  and  Dunlap  were  broken  ofif,  and  negotiations  afterwards 
commenced  anew  between  Dunlap  and  defendant  directly ;  and  also 
as  to  what  part,  if  any,  plaintifif  had  in  furthering  the  sale  after  Dun- 
lap's  return. 

1.  With  this  statement  of  the  case  let  us  examine  the  alleged  er- 
rors. Our  attention  is  called  to  three :  First,  the  court  refused  to 
give  the  eighth  instruction  asked  by  defendant,  which  reads  as  fol- 
lows :  "If  Corum  was  authorized  by  Gillett  to  sell  the  land  or  find 
a  purchaser  at  a  certain  price,  and  Dunlap  had  not,  at  or  before  the 
time  he  went  south,  proposed  to  take  the  land  at  that  price,  or  at  a 
price  which  was  afterwards  accepted,  and  such  a  proposal  was  not 
pending  when  he  went  south,  and  if  before  his  return,  or  before  ne- 
gotiations were  renewed,  Corum's  authority  had  been  revoked  or  had 
expired,  and  Dunlap  afterwards  went  directly  to  Gillett  and  made  a 
bargain  and  purchased  the  land  from  him,  Corum  is  not  entitled  1o 
recover." 

The  court  had  just  given,  at  the  instance  of  the  defendant,  these 
two  instructions : 

"(6)  If  there  was  no  proposition  pending  between  Corum  and 
Dunlap  when  Dunlap  went  south,  and  if  before  Dunlap  returned 
Gillett  revoked  the  authority  of  Corum  to  sell,  or  such  authority  had 
expired,  and  if  afterwards  Dunlap  negotiated  with  Gillett  himself 
and  purchased  the  land  from  him,  Corum  is  not  entitled  to  recover. 

"(7)  Unless  Corum,  while  his  authority  continued  unrevoked  or 
unexpired,  had  effected  a  bargain  or  sale,  or  had  found  a  purchaser 
in  a  condition  and  ready  and  willing  to  take  the  land  on  the  terms 
upon  which  Gillett  had  authorized  Corum  to  sell,  he,  Corum,  can- 
not  recover." 

These  two  instructions  gave  the  law  to  the  jury  in  as  favorable 
light  for  the  defendant  as  he  could  ask;  and  in  so  far  as  the  eighth 
instruction  restates  what  is  said  in  the  sixth  and  seventh,  it  is  open 
to  this  objection,  that  the  court  is  not  bound  to  repeat  what  it  hjjs 


aJ^'- 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  C3l 

once  said.  It  restates  the  law  given  in  the  sixth  and  seventh,  but  it 
narrows  the  essential  statement  so  far  as  to  render  it  justly  objec- 
tionable. It  reads :  "If  Dunlap  had  not  proposed."  Would  not  a 
propositioii  from  Corum  and  an  acceptance  by  Dunlap  have  been  suf- 
ficient? This  instruction  in  efifect  tells  the  jury  that  unless  Dunlap 
proposed  to  buy  before  Corum's  authority  was  revoked,  the  latter 
could  recover  nothing.  It  excludes  everything  but  a  proposition  from 
Dunlap.  We  think  the  court  had  fully  stated  the  law,  and  properly 
refused  the  eighth  instruction. 

2.  The  court  instructed  the  jury  as  follows :  "If  the  plaintiff  was 
agent  of  the  defendant,  as  he  claims,  and  in  pursuance  of  the  author- 
ity given  him  found  a  purchaser  of  the  premises,  and  put  the  pur- 
chaser and  defendant  in  communication  with  reference  to  the  land, 
and  negotiations  were  thereby  set  on  foot  between  them  which  led 
to  a  bargain  and  sale  of  the  premises,  the  defendant  could  not,  by 
taking  the  negotiations  out  of  the  hands  of  the  plaintiff,  and  complet- 
ing the  sale  in  person,  defeat  the  plaintiff's  right  to  compensation."  / 
We  fail  to  see  any  error  in  this.  If  the  law  were  not  as  stated,  the  < 
occupation  of  a  real  estate  agent  would  be  precarious  indeed.  An 
agent  is  employed  to  sell  real  estate.  He  looks  around  and  finds  a 
purchaser,  one  who  is  able  and  ready  and  willing  to  buy.  He  brings 
the  parties  together  and  starts  negotiations  which  result  in  a  sale. 
Can  the  principal  after  this  discharge  the  agent,  consummate  the  sale 
iitmself^^^nJ  refuse  the  a^ent  compensation?  We  think  not.  That 
■  which  the  agent  is  employed  for,  is  to  find  a  purchaser.  He  finds  one. 
"The.  principal  gets  the  benefit  of  his  labor  and  must  pay  for  it.  Hed- 
-TtEif  V:  S^hepherd,  29  N.  J.  Law,  334;  Ludlow  v.  Carman,  2  Hilt.  107. 
The  case  cited  by  counsel  for  plaintiff  in  error  (McGavock  v.  Wood- 
lief,  20  How.  221,  15  L.  Ed.  884)  is  not  in  point.  There  the  agent 
had  brought  a  supi)osed  purchaser  to  his  principal;  the  terms  named 
had  been  accepted  ;  a  contract  reciting  those  terms  signed.  But,  when 
they  came  to  the  execution  of  the  deeds  and  the  payment  of  the  con- 
sideration, the  supposed  purchaser  was  unable  to  pay,  and  the  at- 
tempted sale  fell  through.  The  agent  found  a  party  whq  was  willing 
to  buy,  butjiot  able  nor  ready.  He  therefore  found  no  purchaser,  and 
"was  entitled  fo  no  commission.'^  *  *  * 
JiTdgmcnt  for  plaintiff  affirmed. 

21  Accord:  W:irrcii  ("liciniciil  &^  Mf^.  Co.  v.  ITolhrnok.  US  N.  T.  nSfi.  23  N. 
K.  OOS.  k;  Am.  St.  Kcp.  Tss  (ISKOi;  (;ni;:im  v.  Siiiitli,  7  T.  L.  K.  l.",L',  L'  Kiis,'. 
Rul.  <'jis.  ri.';:;  (ISiiOi.  IIk-  lliii-fl  i)iirt.v  must  be  willing  to  contract  on  tlic 
spcclficil  terms  or  tlic  apMit  li;is  iiul  earned  lils  commissions.  Alta  Investment 
Co.  V.  Wordon,  L'5  Colo.  210.  53  Vac.  1047  (l«l)8). 


/ 


G32        EFFECTS  AND  CONSKQIKNCES  OF  THE  RELATION     (Part  3 

ATTRILL  V.  PATTERSON. 

(Court  of  ApiU'Mls  of  Mnrylaiul,  ISSl.     58  Md.  22G.) 

Attrill  owned  a  controlling  interest  in  the  Crescent  City  Gas  Light 
Company  of  New  Orleans,  and  desired  to  make  some  arrangement  to 
buy  the  works  of  the  old  Company,  the  New  Orleans  Gas  Light  Com- 
pany. He  offered  Patterson  $50,000  if  he  would  go  to  New  Orleans 
and  effect  some  compromise  of  the  conflicting  claims  of  the  two  com- 
panies. The  eft'orts  failed  and  Patterson  advised  suit.  Attrill  finally 
brought  suit  and  was  completely  successful,  in  consequence  of  which 
he  was  able  to  amalgamate  the  new  with  the  old  company  on  favorable 
terms.  Patterson  demanded  his  $50,000,  but  was  refused  and  brought 
^uit.    Judgment  for  plaintiff  and  defendant  appealed. 

Irving,  J.^^  *  *  .t  j^.  j-^^^^y  ]jg  j^j^j  (^lown,  as  a  general  rule,  that 
an  agent's  authority  to  act  for  a  principal,  is  always  revocable  at  the 
will  of  the  principal ;  and  may  at  any  time  be  put  an  end  to  by  with- 
drawing the  authority;  unless  the  authority  be  coupled  with  an  in- 
terest ;  or  has  been  conferred  on  the  agent  for  a  valuable  compensa- 
tion moving  from  him  to  the  principal.  1  Parsons  on  Contracts,  69; 
Wharton  on  Agency,  95,  and  notes;  Story  on  Agency,  §§  463  and  464; 
Hunt  V.  Rousmanier,  8  Wheat.  174,  5  L.  Ed.  589;  Simpson  v.  Lamb, 
84  E.  C.  L.,  603;  Blackstone  v.  Buttermore,  53  Pa.  266;  Hartley's 
Appeal,  53  Pa.  212,  91  Am.  Dec.  207;    Creager  v.  Link,  7  Md.  259. 

What  constitutes  an  authority  coupled  with  an  interest,  the  decisions 
without  exception,  are  agreed  about.  In  Hunt  v.  Rousmanier  already 
cited,  Chief  Justice  Marshall  says,  it  "is  an  interest  in  the  thing  itself 
on  which  the  power  is  to  be  exercised,  and  not  an  interest  in  thajt_ 
which  is  to  be  produced  by  the  exercise  of  the  power."  In  Blackstone 
V.  Buttermore,  53  Pa.  266,  the  same  rule  is  laid  down  in  almost  the 
same  terms,  and  that  is  now  the  doctrine  of  all  the  text  books. 

There  is  a  class  of  cases,  where,  if  the  agent  has  done  something 
in  virtue  of  his  authority,  and  incurred  expense  before  the  agency 
is  revoked,  he  will  be  entitled  to  be  reimbursed.  For  example,  if  the 
negotiations  of  a  broker  employed  to  sell  property  be  broken  off  by 
the  principal,  after  he  has  gone  to  trouble  and  expense  in  the  matter, 
he  will  be  entitled  to  recover  for  what  he  has  aone,  on  a  quantum 
meruit.  Story  on  Agency,  §  329;  Wharton  on  Agency,  §  322.  This 
case  having  been  assimilated  to  the  case  of  a  broker  to  sell  real  or 
personal  estate,  or  negotiate  a  loan,  it  is  necessary  to  lay  down  the 
general  rule  applying  to  such  agents.  The  rule  is,  that  the  broker  is 
not  entitled  to  his  commissions  till  the  work  is  complete;  but,  if  after 
the  sale  is  virtually  effected,  the  principal  takes  the  matter  into  his 
own  hands,  and  revokes  the  agency,  he  cannot  escape  the  payment  of 
commissions.     In  such  cases,  and  there  are  many  of  them  in  the 

22  Part  of  the  opinion  is  omitted- 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  G33 

books,  the  broker  is  regarded  as  having  earned  his  commission  or 
compensation,  by  being  the  procuring  cause  of  the  transaction  being 
consummated.  Ewell's  Evans  on  Agency,  §  453 ;  Keys  v.  Johnson, 
68  Pa.  42.  In  Keener  v.  Harrod  &  Brooke,  2  Md.  71,  56  Am.  Dec. 
706,  Judge  Tuck,  speaking  for  this  court,  expounds  the  principle  con- 
trolHng  such  cases  thus:  "We  understand  the  rule  to  be  this,  (in 
the  absence  of  evidence  of  usage,)  that  the  mere  fact  of  the  agent 
having  introduced  the  purchaser  to  the  seller,  or  disclosed  the  names 
by  which  they  came  together  to  treat,  will  not  entitle  to  compensa- 
tion ;  but,  if  it  appears,  that  such  introduction  or  disclosure  was  the 
foundation  on  which  the  negotiation  was  begun,  conducted,  and  the 
sale  made,  the  parties  cannot  afterward,  by  agreement  between  them- 
selves, withdraw  the  matter  from  the  agent's  hands,  so  as  to  deprive 
the  agent  of  his  commissions."  This  case,  and  all  others  are  in  har- 
mony with  it,  establishes  the  rule  that  the  agent  must  be  the  procuring 
cause  of  the  transaction,  whatever  it  is,  being  consummated.  It  is 
a  matter  of  proof.  The  fact  that  the  agent  brought  the  parties  to- 
gether, might  raise  a  presumption,  if  the  transaction  was  consummated 
in  a  short  time  thereafter,  that  he  was  the  procuring  cause ;  but  that 
could  be  rebutted,  as  was  done  in  Earp  v.  Cummins,  54  Pa.  396,  93 
Am.  Dec.  718,  where  the  purchaser  (who  the  court  said,  if  anybody 
knew,  must  know)  testified  he  "was  not  influenced  at  all  in  making 
the  purchase,  by  the  agent."  There,  the  negotiations,  which  were 
first  begun,  because  of  some  publications  by  the  agent,  who  sued  for 
commissions,  were  broken  off.  Several  months  afterwards,  by  the 
influence  of  other  parties,  the  purchaser  was  induced  to  renew  the 
treaty,  and  bought  the  property.  The  court  of  final  resort,  said  the 
plaintiff,  was  improperly  allowed  to  recover  commissions,  and  judg- 
ment was  reversed. 

Applying  these  principles  to  the  case  in  hand,  we  cannot  see  how 
Patterson  can  be  regarded  as  having  contributed,  in  any  proper  legal 
sense,  to  the  production  of  the  result  finally  attained.  It  can  hardly 
be  termed  a  compromise.  It  was  the  dictation  of  terms  to  a  con- 
quered or  captured  foe.  But  Patterson  insists  that,  because  he  advised 
the  suit,  he  is  entitled  to  his  compensation ;  for  the  "compromise," 
effected  at  the  termination  of  the  suit,  "was  a  good  one."  The  in- 
stitution of  the  suit  did  not  bring  the  compromise.  Had  the  bare  insti- 
tution of  suit  brought  the  compromise,  Patterson's  claim  would  be 
better  founded.  It  was,  however,  nothing  less  than  the  judgment  of 
the  court  of  last  resort,  after  tedious  and  cosily  litigation  that  ren- 
dered the  old  company  hcljiless,  that  brought  consolidation.  An  es- 
sential condition,  then,  in  the  original  contract,  was  not  fulfilled  by 
the  agent.     He  did  not  procure  the  compromise. 

All  the  parties  best  able  to  speak  on  the  subject,  as  in  Earp  v.  Cum- 
mins, say  he  did  nothing  towards  bringing  it  about;  and  they  were  not 
influenced,  in  the  slightest  degree,  by  anything  he  had  done.  The 
original  contract,  as  we  have  said,  did  not  give  Patterson  unlimited 


634  EFFECTS   AND    CONSKgiKNtMOS   OF   TUK    KKI.ATION  (Part   3 

powers,  to  settle  the  matter  by  any  means  \\hate\er,  ineliuling  costly 
litigation,  so  that  he  should  he  entitled  to  his  contingent  fee,  no 
matter  how  the  result  was  broui-ht  about.'-''     *     *     *     Reversed. 


LA  FORCE  V.  WASHINGTON  UNIVERSITY. 

(Kansas  Citv  Coiut  of  Appoals.  Missouri,  1904.     lOG  Mo.  App.  517,  81  S.  W. 

lioy.) 

Ellison,  J-"*  This  action  was  instituted  by  plaintiff  to  recover  a 
commission  for  the  sale  of  real  estate  in  Kansas  City,  Mo.,  belonging 
to  defentlant.  The  trial  court  found  against  the  plaintiff,  and,  judg- 
ment being  entered  for  defendant,  the  former  appealed. 

It  appears  that  the  plaintiff  resided  in  Kansas  City,  and  that  the 
defendant  was  at  St.  Louis,  and  that  they  entered  into  a  written  con- 
tract concerning  the  sale  of  the  property.  This  contract  was  executed 
on  the  21st  of  October,  1901,  and  was  to  be  in  force  for  the  limited 
time  of  90  days,  which  period  expired  January  21,  1902.  But  some 
10  or  12  days  before  the  limit  expired  it  was  extended,  by  mutual 
agreement,  for  a  period  of  30  days  further ;  such  extension  expiring 
on  February  21,  1902.  Before  the  contract  was  executed,  plaintiff 
thought  he  could  sell  the  property  if  he  had  the  exclusive  control 
of  it.  He  had  especially  in  view  as  purchasers  a  firm  of  wholesale 
merchants  in  Kansas  City.  We  here  set  out  the  contract:  "Kansas 
City,  Mo.,  Oct.  21,  1901.  This  memorandum  of  agreement,  by  and 
between  Washington  University,  a  corporation  under  the  laws  of  Mis- 
souri, party  of  the  first  part,  of  St.  Louis,  Missouri,  and  Felix  L.  La 
Force,  of  Jackson  county,  Missouri,  party  of  the  second  part,  witness- 
eth :  Said  party  of  the  first  part,  for  and  in  consideration  of  the  sum 
of  one  dollar  paid  by  second  party,  the  receipt  of  which  is  hereby 
acknowledged,  does  hereby  give  the  said  second  party  the  exclusive 
option  and  privilege  to  buy  their  southeast  corner  of  Eighth  and  May 
streets,  Kansas  City,  Missouri  [describing  it].  The  price  agreed  upon 
by  said  first  party  to  sell  to  said  second  party,  is  the  sum  of  fifty-six 
thousand  and  five  hundred  dollars,  net,  for  the  150x142  feet,  no  com- 
mission to  be  paid  by  said  first  party.  Terms :  Cash,  or  one-third 
cash;  deferred  payments  to  bear  interest  at  five  per  cent,  from  Jan- 
uary 21st,  1902.  This  contract  or  option  to  purchase  is  to  run  for 
ninety  days   from  this  date.     In  the  event  of  purchase  by  the  said 

23  Accord:  Sibbald  v.  Bethlehem  Iron  Co.,  83  N.  Y.  378,  38  Am.  Rep.  441 
(18S1);  Kelly  v.  Marshall.  172  Pa.  396,  33  Atl.  GOO  (1S9G) ;  and  Lumley  v. 
NiohoLson,  .34  Wkly.  Rep.  71G  (18SG|,  in  which  the  prindpal  actually  did  after- 
ward  contract  with   parties  introduced  to   him   by    the   agent. 

The  fact  that  an  agent  has  procured  a  customer  for  his  principal  does  not 
mortgage  the  business  of  such  customer  forever.  Gilbert  v.  Quintan,  59  Hun, 
.508,  13  N.  Y.  Supp.  G71  (1891);  Curtis  v.  Nixon,  24  L.  T.  Rep.  (N.  S.)  70G 
(1871). 

z*  Part  of  the  opinion  Is  omitted. 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    TRIXCIPAL    TO    AGENT  G35 

second  party  or  his  assigns,  the  said  first  party  is  to  convey  said  real 
estate  free  and  clear  of  all  incumbrance,  except  West  Terrace  Park 
assessment ;  and  they  also  agree  to  furnish  a  complete  abstract  from 
government  down  to  date,  also  certificates  as  to  judgment  and  taxes. 
In  the  event  second  party  elects  to  buy  said  real  estate  within  the  time 
herein  agreed,  or  sells  the  same,  the  said  first  party  is  to  give  the  sec- 
ond party  or  his  assigns  thirty  days'  extra  time  to  examine  title  and 
close  the  deal.  Said  thirty  days'  extra  time  is  to  date  from  the  date 
of  expiration  of  this  contract.  In  the  event  said  second  party  fails 
to  take  advantage  of  the  terms  of  this  contract  as  herein  specified, 
this  instrument  becomes  void."  On  the  reverse  side  is  the  following: 
"St.  Louis.  Mo.,  Jan.  10,  1902.  By  mutual  consent  the  above  contract 
is  extended  until  February  21,  1902." 

During  the  first  90-day  period  plaintiff  made  diligent  eft'ort  to  sell, 
but  towards  the  latter  part  he  saw  he  would  not  be  able  to  consum- 
mate a  sale  within  the  time  limited,  and  he  sought  an  extension  for 
another  period  of  90  days.  The  defendant  refused  that  length  of 
time,  but  did  extend  the  contract  for  a  period  of  30  days,  as  already 
stated,  and  as  is  shown  in  the  copy  just  set  out.  Plaintiff  faithfully 
pursued  his  endeavor  to  sell  through  the  extended  time,  but  without 
success.  He  endeavored  to  obtain  another  extension  within  which 
he  hoped  to  make  a  sale,  but  defendant  refused.  Several  months 
after  the  expiration  of  the  extended  time,  defendant  sold  the  property 
to  the  wholesale  firm  with  whom  plaintiff  had  been  negotiating  from 
the  beginning.  Plaintiff'  claimed  the  usual  and  customary  commission 
on  sales  of  that  magnitude,  which  defendant  refused  to  pay,  contend- 
ing that  it  was  under  no  obligation  to  pay  any  amount.     *     *     * 

So,  conceding  that  the  contract  made  plaintiff  an  agent  to  sell,  it 
is  manifest  that  such  agency  was  a  definite  and  limited  agency  in  the 
following  particulars,  viz. :  that  it  was  for  a  specific  period  (including 
extension)  of  120  days  from  October  21,  1901,  that  the  price  should 
be  $56,500;  and  that  there  was  to  be  no  commission  charged.  It  is 
conceded  that  the  sale  was  not  made  within  the  time  limited.  Now, 
the  law  is  that,  even  where  there  is  no  specific  time  named  as  limiting 
the  agency,  and  a  reasonable  time  elapses  without  a  sale  (circum- 
stances considered),  the  owner  may  in  good  faith,  without  design  to 
avoid  payment  of  commission,  revoke  the  agency  and  sell  to  the  party 
with  whom  the  agent  had  been  negotiating.  Sibbald  v.  Iron  Co.,  83 
N.  Y.  378,  38  Am.  Rep.  441  ;  Wylic  v.  Bank.  61  N.  Y.  415;  Stcdman 
V.  Richardson,  100  Ky.  79,  37  S.  W.  259;  Fairchild  v.  Cunningham, 
84  Minn.  521,  88  N.  W.  15.  By  much  greater  reason,  therefore,  shoui<l 
it  be  said  that,  where  parties  stipulate  that  an  agency  to  sell  another's 
property  is  limited  to  a  definite  period,  it  will  terminate  at  that  pe- 
riod ;  and,  if  a  sale  has  not  been  made  within  the  time,  no  compensa- 
tion (in  the  absence  of  fraud)  can  be  recovered  on  account  of  a  sub- 
.sequcnt  sale  by  the  owner.  The  law  has  been  repeatedly  so  declared. 
Page  v.  r.riffin,  71  Mo.  App.  524;   Bcauchnnip  v.  Jliggins.  20  Mo.  App. 


Vi'^G  EFFECTS    AND    CONSEQITENCES   OF  THE    REFLATION  (Part   3 

514;  Stcclniaii  v.  Richardson,  100  Ky.  79,  83,  37  S.  W.  259;  Aiitis- 
del  V.  Cantickl,  119  Mich.  229,  236,  77  N.  W.  944.  Mcchem,  in  his 
work  on  A};cncy,  §  965,  says  that:  "Tt  will  be  seen  from  this  rule 
that  when  the  time  is  limited  the  ixiforniance  must  be  within  that  time, 
and  tlic  broker  will  not  be  entitled  to  commissions  because  efforts 
begun  within  that  time  bear  fruit  after  its  expiration."  "^ 

It  seems  that  the  plaintiff  must  have  recognized  that  such  was  the 
law,  for  he  incorporated  in  the  contract  a  stipulation  which  protected 
him,  in  case  the  time  should  expire  after  he  had  made  the  sale,  but 
before  it  was  consummated,  viz. :  that,  in  the  event  he  should  sell 
the  property  "within  the  time  herein  agreed,"  the  defendant  would 
give  "thirty  days'  extra  time  to  examine  the  title  and  close  the  deal." 
And  that  is  not  all.  If  the  contract  is  to  be  construed  as  creating  an 
agency,  it  was  not  only  for  a  specific  time,  but  it  was  authority  to 
dispose  of  it  for  a  designated  net  sum,  without  commission.  The  con- 
tract and  the  subsequent  correspondence  of  the  parties  disclose,  with- 
out doubt  or  question,  that  the  parties  understood  that  defendant 
would  be  satisfied  to  receive  the  amount  named,  and  that  plaintiff  was 
to  have  all  over  that  amount  he  could  obtain  for  the  property.  Upon 
that  basis  plaintiff  sought,  and  very  properly  sought,  to  obtain  a  price 
several  thousand  dollars  in  advance  of  the  price  named  in  the  con- 
tract. If  he  had  been  successful,  his  compensation  would  have  been 
manyfold  greater  than  the  sum  he  now  claims.  The  compensation 
for  plaintiff's  labor  was  contingent.  If  he  succeeded,  it  might  be  very 
large ;   and  if  he  failed  it  would  be  nothing.     *     ♦     * 

Affirmed. 


ATTERBURY  v.  HOPKINS. 

(Kansas  City  Courts  of  Appeals,  Missouri,  1906.     122  Mo.  App.  172, 

99  S.  W.  11.) 

Ellison,  J.^^  Defendants  engaged  the  plaintiffs,  for  a  stated  com- 
mission, to  sell  or  exchange  for  them  their  stock  of  hardware  and  a 
house  and  lot,  all  in  the  town  of  Brunswick.  Plaintiffs  charge  that 
they  procured  a  purchaser  for  the  property,  and  that  defendants  re- 
fused to  pay  them  their  commission,  whereupon  they  instituted  this  ac- 
tion.   They  prevailed  in  the  trial  court. 

Much  of  the  matter  urged  by  appellants  against  the  judgment  is  out- 
side the  issues  made  by  their  answer,  and  the  theory  upon  which  they 
tried  the  case  in  the  circuit  court.  The  answer  admits  the  employ- 
ment of  plaintiffs,  and  that  they  procured  a  purchaser,  and  sets  up  but 
one  defense,  and  that  is  that  plaintiffs  accepted  employment  at  their 

25  It  is  enough  however  if  the  agent  procure  customers  able  and  willing  to 
perform,  even  though  the  prinripul  cannot,  or  does  not,  contract  with  suctl 
cu.stonier.     Ivelly  v.  Phelps,  57  Wis.  425,  15  N.  W.  385  (1883). 

2  0  Part  of  the  opinion  is  omitted. 


Ch.2) 


DUTIES    AND    LIABILITIES    OF    PRINCirAL    TO    AGENT 


G37 


hands  when,  without  their  knowledge  or  consent,  plaintiffs  were  also 
in  the  employment  of  such  purchaser.  The  law  is  that  one  cannot  se- 
cretly act  for  one  party  while  in  the  employ  of  the  opposing  party,  and 
"THatTlfhe  does,  he  forfeits  all  right  to  compensation  at  the  hands 
or  the  party  thus  deceived  and  betrayed.  The  reason  for  this  just 
fine_ceases,  however,  if  there  is  no  deception,  and  each  of  the  oppos- 
ing partieTafe  aware  of  the  dual  agency.  "If,  having  full  knowledge 
of  his"  relations  to  each,  they  see  fit  mutually  to  confide  in  him,  there 
can  be  no  legal  objection  to  such  an  employment,  nor  will  either  of 
the  principals  be  permitted  afterwards  to  escape  responsibility  be- 
cause of  such  double  employment."  Mechem  on  Agency,  §  67; 
Stripling  V.  McGuire,  108  :Mo.'  App.  594,  84  S.  W.  164.^^  The  issue 
in  respect  to  the  law  thus  stated  was  fully  and  fairly  submitted  to 
the  jury,  and  the  verdict,  being  supported  by  the  evidence  we  accept 
as  conclusive.     *     *     *     Judgment  affirmed. 


SECTION  2.— REIMBURSEMENT  AND  INDEMNITY 


ADAMSON  V.  JARVIS.  ^Z 

(Court  of  Common  Pleas,  1827.     4  Bing.  66,  13  E.  C.  L.  403.) 
Best,  C.  J.^®     A  motion  has  been  made  in  arrest  of  judgment 
after  verdict.    The  plaintiff  relies  on  the  second  count,  on  which  only 
his  verdict  and  judgment  are  to  be  entered. 

Stripped  of  the  technical  language  with  which  it  is  encumbered. 
the  case  stated  on  the  second  count  is  this :  that  the  defendant  hav- 
ing property  of  great  value  in  his  possession^  represented  to  the 
"plaintiff  that  he  had  authority  to  dispose  of  such  property;  and  fol- 
lowed this  representation  by  a  request,  that  the  plaintiff  would  sell 
the  property  for  him,  the  defendant.  The  plaintiff,  believing  the  rep- 
resentation of  the  defendant  as  to  his  right  to  the  property,  and  not 
knowing,  either  at  the  time  the  representation  was  made,  or  at  any 
time  after,  that  it  was  not  his,  as  the  agent  of  the  defendant,  sold 
the  property ;  and  after  paying  such  sums  out  of  the  proceeds  as 
he  was  bound  to  pay,  and  making  such  deductions  as  he  had  a  right 

2ttIh'  distinctions  between  illegal  and  IcKul  double  ajiencies  are  discus.sed 
at  IrnKth  in  I'.ell  v.  M'Connell,  .'',7  Ohio  St.  :VM;,  41  Am.  Rep.  52S  (ISSl),  wliieli 
finds  no  ol)je<-tion  to  recovery  of  commissions  from  botli  principals,  wliere 
liofli  nre  fully  advised,  and  consent  to  the  double  enipl«»yment,  tlioimh  such 
transartlons  are  regarded  with  suspicion.  In  su<h  case  each  i)riniipal  gets 
what  he  fontracted  for,  and  should  pay  for  it.  The  rule  forbidding  douliic 
agcnfy  is  for  tlic  bcnelit  of  the  prindp.'ils,  and  if  they  consent  to  it  tlial  Is 
an  end  to  tlie  f)ltjf(tion.  Fryer  v.  Ilark<'r.  142  Iowa.  708,  121  N.  W.  526,  2."'. 
L.  H.  .\.  (.\.  S.)  477  (1909).     See,  also,  ante,  p.  513  ff. 

2  8  Tart  of  the  opinion  is  omitted. 


(i;>S  lU'FECTS   AND   CONSKQI'ENCIOS   OK  TllK    UKLATION  (Part   3 

to  make,  and  which  the  dokMuhint  appears  to  have  alUnved,  paid  the 
residue  to  the  det'oiulant. 

The  defendant,  who  had  inchiccd  the  plaintiff  to  make  this  sale  by 
his  false  representation  and  request  to  sell,  and  who,  after  the  sale, 
continued  to  assert  his  right  to  sell,  and  confirmed  the  agency  of  the 
plaintiff  by  accepting  from  him  the  residue  of  the  proceeds  of  the 
sale,  had  no  right  to  dispose  of  this  property.  The  consequence  has 
been,  that  the  plaintiff,  supposing,  from  the  defendant's  false  repre- 
sentations, he  had  an  authority  which  he  had  not,  and  acting  as  the 
defendant's  agent,  has  rendered  himself  liable  to  an  action  at  the 
suit  of  the  true  owner  of  the  goods,  and  has  been  obliged  to  pay  dam- 
ages and  costs,  whilst  the  defendant,  the  sole  cause  of  the  sale,  quietly 
keeps  the  fruits  of  it  in  his  pocket. 

It  has  been  stated  at  the  bar  that  this  case  is  to  be  governed  by  the 
principles  that  regulate  all  laws  of  principal  and  agent: — agreed: 
every  man  who  employs  another  to  do  an  act  which  the  employer 
appears  to  have  a  right  to  authorize  him  to  do,  undertakes  to  indem- 
nify him  for  all  such  acts  as  would  be  lazvful  if  the  employer  had  the 
authority  he  pretends  to  have.  A  contrary  doctrine  would  create 
great  alarm. 

Auctioneers,  brokers,  factors,  and  agents,  do  not  take  regular  in- 
demnities. These  would  be  indeed  surprised,  if,  having  sold  goods 
for  a  man  and  paid  him  the  proceeds,  and  having  suffered  afterwards 
in  an  action  at  the  suit  of  the  true  owners,  they  were  to  find  them- 
selves wrong-doers,  and  could  not  recover  compensation  from  him 
who  had  induced  them  to  do  the  wTong. 

It  was  certainly  decided  in  Merryweather  v.  Nixon,  8  T.  R.  186, 
that  one  wrong-doer  could  not  sue  another  for  contribution;  Lord 
Kenyon,  however,  said,  "that  the  decision  would  not  affect  cases  of 
indemnity,  where  one  man  employed  another  to  do  acts,  not  un- 
lawful in  themselves,  for  the  purpose  of  asserting  a  right."  This  is 
the  only  decided  case  on  the  subject  that  is  intelligible. 

There  is  a  case  of  Walton  v.  Hanbury  et  al.,  2  Vern.  592,  but  it 
is  so  imperfectly  stated,  that  it  is  impossible  to  get  at  the  principle 
of  the  judgment. 

The  case  of  Philips  v.  Biggs,  Hardr.  164,  was  never  decided ;  but 
the  Court  of  Chancery  seemed  to  consider  the  case  of  two  sheriffs 
of  Middlesex,  where  one  had  paid  the  damages  in  an  action  for  an 
escape,  and  sued  the  other  for  contribution,  as  like  the  case  of  tzvo 
joint  obligors. 

From  the  inclination  of  the  Court  on  this  last  case,  and  from  the 
concluding  part  of  Lord  Kenyon's  judgment  in  Merryweather  v. 
Nixon,  and  from  reason,  justice,  and  sound  policy,  the  rule  that 
wrong-doers  cannot  have  redress  or  contribution  against  each  other 
is  confined  to  cases  where  the  person  seeking  redress  must  be  pre- 
sumed to  have  known  that  he  was  doing  an  unlawful  act. 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCirAL    TO    AGENT  639 

If  a  man  buys  the  goods  of  another  from  a  person  who  has  no  au- 
thority to  sell  them,  he  is  a  wrong-doer  to  the  person  whose  goods 
he  takes ;  yet  he  may  recover  compensation  against  the  person  who 
sold  the  goods  to  him,  although  the  person  who  sold  them  did  not 
undertake  that  he  had  a  right  to  sell,  and  did  not  know  that  he  had 
no  right  to  sell.  That  is  proved  by  Medina  v.  Stoughton,  1  Salk. 
210;  Sanders  v.  Powel,  1  Lev.  129;  Crosse  v.  Gardner,  Carth.  90; 
1  Roll.  Abr.  91,  1.  5,  and  many  other  cases. 

These  cases  rest  on  this  principle,  that  if  a  man,  having  the  posses- 
sion of  property  which  gives  him  the  character  of  owner,  affirms 
that  he  is  owner,  and  thereby  induces  a  man  to  buy,  when  in  point 
of  fact  the  affirmant  is  not  the  owner,  he  is  liable  to  an  action. 

It  has  been  said,  that  is  because  there  is  a  breach  of  contract  to  rest 
the  action  on,  and  that  there  is  no  contract  in  this  case.  This  is  not 
the  true  principle:  it  is  this:  he  who  affirms  either  ivhat  he  does  not 
know  to  he  true,  or  knows  to  be  false,  to  another's  prejudice  and  his 
own  gain,  is  both  in  morality  and  law  guilty  of  falsehood,  and  must 
answer  in  damages. 

But  here  is  a  contract :  the  plaintiff  is  hired  by  defendant  to  sell, 
which  implies  a  warranty  to  indemnify  against  all  the  consequences 
that  follow  the  sale.-*     *     *     * 

Rule  discharged. 

29  In  Hoggan  v.  Cahoon,  26  Utah,  444.  73  Pac.  512.  00  Am.  St.  Rep.  837 
(1903),  the  court  puts  tlie  matter  thus:  "If  the  allegations  are  iu  fact  true, 
the  plaintiff  has  a  riirht  of  recovery.  The  facts  stated  are  such  as  to  char- 
acterize the  case  as  an  exce[ition  to  the  rule  of  law  that  tort  feasors  or  wrong- 
doers cannot  have  redress  against  each  other.  That  rule  applies  to  cases 
where  he  who  seeks  redress  knew  or  must  he  presumed  to  have  known  that 
the  transaction  which  resulted  in  the  damages  he  was  compelled  to  pay  was 
tortious  and  unlawful.  Hut  where,  as  api»ears  from  the  allegations  in  this 
ca.se,  an  agent  acts  in  good  faith  for  his  principal,  under  the  principal's  di- 
rection, and  relies  upon  his  representations  that  the  transaction  is  lawful, 
and  the  same  is  not  manifestly  unlawful,  the  law  implies  iM(h'iiniity,  for  dam- 
ages of  third  parties,  to  the  ai^ciit  from  the  i)rin(i])al ;  and  if,  as  the  result 
of  acts  so  j)erformt'd,  the  agent  is  mulcted  in  damages,  the  principal  must 
respond  to  the  agent  for  the  siime,  as  well  as  for  the  n«'cessary  expenses  in- 
curred in  resisting  the  claims  of  third  parties  who  were  injured  hy  the  trans- 
action. 'The  agent  has  the  right  to  a.><sume  that  the  principal  will  not  call 
upon  him  to  perform  any  duty  whi<h  would  render  him  liable  in  damages  to 
tliird  persons.  Having  no  jtersoiial  interest  in  the  .act,  ofiier  than  the  per- 
forniiUH-e  of  his  duty,  the  agent  slwnild  not  he  rcfiuired  to  suflCr  loss  from 
llie  doing  of  an  act  .aiipareiilly  lawful  in  irself,  and  which  Ik;  has  undertak- 
en to  do  by  the  dlreetlon  and  f<ir  the  lienelit  anrl  advantage  of  his  iirincipal. 
If  in  the  i>erformance  of  suih  an  ad,  tlu-refore,  the  .agent  invades  the  rights 
of  third  persons,  and  ln«  urs  lijihllity  to  tliem,  the  loss  should  fall  rather  up- 
on him  for  whose  henelit  and  hy  whose;  direction  it  was  done,  than  upon  him 
whose  only  intention  was  to  do  his  duty  to  his  jirincipal.  Wherever,  then, 
the  agent  Is  c;illed  njion  l)y  his  jiriticipal  to  do  .an  act  wjiich  is  not  niiiidfestly 
Illegal,  and  which  he  does  not  know  lo  lie  wrong,  the  law  implies  a  promise 
on  the  part  of  the  iirlnci|p;il  to  indenniiry  the  agent  for  such  losses  .'Uid  dam- 
ages as  flow  directly  and  Immediately  from  the  execution  of  the  .agency. 
'Hius  nn  agent  Is  entitled  to  he  indemrillicd  when  he  Is  comi"'lle<l  (o  jiay  dam- 
ages for  takiuL'  jiersonal  jiroperty  hy  dir«'Ctlon  of  his  itrincip.al.  which,  though 


040  EFl-lXTS   AND   CONSHQUENCES   OP  THE    RELATION  (Part   3 

BACON  V.  FOURTH  NAT.  BANK/'"' 

(City  Court  of  .Now  York,  Trial  Toriu,  1S89.     9  N.  Y.  Siipp.  435^ 

INIcAdam,  C.  J.  The  fees  paid  to  the  attorneys  in  Boston  were  ex- 
pended under  circumstances  from  which  the  law  imj^lics  a  request 
to  pay  for  them  on  the  part  of  the  plaintiff.  Legal  advice  and  serv- 
ices may  be  as  necessary  to  protect  the  property  as  the  aid  of  a  phy- 
sician or  surgeon  is  to  protect  Ufe.  Neither  may  prove  serviceable  in 
some  cases,  in  others  extremely  so,  depending  in  a  measure  on  results. 
Prudence  requires  their  employment  in  all  cases  wherein  property 
or  life  is  imperiled.  It  would  be  negligence  not  to  employ  profes- 
sional aid  in  cases  requiring  it.  The  result  does  not  determine  the 
propriety  of  the  employment.  The  condition  of  things  at  the  time 
must  decide  that.  A  party  who  acts  according  to  the  best  lighl^s  that 
can  be  obtained  at  the  moment  is  not  negligent,  but  discreet.  It  is 
elementary  that  an  agent  is  not  permitted  to  reap  any  of  the  ^Drofits 
of  his  agency  properly  belonging  to  his  principal;  §0,  on  the  other 
hand,  he  is  entitled  to  be  indemnified  against  all  losses  which  have 
been  innocently  sustained  by  him  on  the  same  account.  Story,  Ag.  §§ 
339,  340;  Ewell's  Evans,  Ag.  473 ;  Howe  v.  Railroad  Co.,  38  Barb.  124. 
The  naked  depositary  ought  neither  to  be  injured  nor  benefited  in 
any  respect  by  the  trust  undertaken  by  him.  In  an  emergency  he 
has  an  implied  authority  to  incur  expenses  on  behalf  of  the  owner 
^  for  the  preservation  of  the  property.  Edw.  Bailm.  §  66. 
""  It  is  a  familiar  rule  that  an  agent  has  the  duty  of  taking  such  steps 
as  are  reasonably  necessary  for  the  protection  of  his  principal's  in- 
terests, and  for  the  preservation  of  his  principal's  property,  and 
that,  having  made  outlays  for  that  purpose,  he  is  entitled  to  reim- 
bursements at  the  hands  of  his  principal.  Story,  Ag.  §  335 ;  Whart. 
Ag.  §  314.  The  reason  of  the  rule  is  that  a  request  on  the  part  of  the 
principal  is  inferred  where  the  advances  are  made  in  the  regular 
course  of  business,  or  even  on  the  spur  of  some  pressing  urgency  not 
provided  for  by  any  rule,  since  the  employer  may  fairly  be  taken  to 
have  authorized  the  employed  to  make  the  expenditure  under  any  cir- 
cumstances that  a  prudent  man  would  conceive  necessary  for  the 
safeguard  of  his  interest.     Smith,  Merc.  Law,  §  169.     In  Harter  v. 

flaimed  adversely  by  another,  he  has  reasonable  ground  to  believe  to  belong 
to  his  principal.'     Mechora  on  Agency,  §  65.3." 

An  innocent  agent  who  has  been  arrested  and  imprisoned  for  obeying  the 
orders  of  his  prinfiiml  can  recover  from  the  principal  damages  therefor. 
Howe  V.  Buffalo,  N.  Y.  &  Erie  R.  Co.,  37  N.  Y.  297  (1S07),  affirming  38  Barb. 
124  (1862). 

30  Accord:  Carson  v.  Ely,  28  Mo.  378  (1859),  where  the  condition  of  the 
goods  demanded  immediate  expenditure  by  the  agent  to  preserve  them.  Prop- 
er incidental  charges  and  expenses  for  warehouse  room,  duties,  freight,  sal- 
vage, repairs,  journeys,  and  other  acts,  to  preserve  the  property,  and  to  en- 
able the  agent  to  accomplish  the  objects  of  the  principal  are  to  be  paid  by 
him.     Ruffner  v.  Hewitt,  7  W.   Ya.  585,  609  (1874). 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRIXCIPAL    TO    AGENT  641 

Blanchard,  64  Barb.  617,  the  rule  was  applied  to  the  case  of  a  horse 
which,  while  in  the  bailee's  possession,  had  his  leg  broken;  and  it 
was  held  that  the  bailee  had,  from  the  nature  of  the  case,  an  implied 
authority  to  contract  in  behalf  of  the  bailor  with  a  competent  farrier 
for  the  care  of  the  animal.  Indeed,  this  just  rule  of  implied  authority 
and  indemnity  pervades  the  law  of  principal  and  agent,  and  of  bail- 
ments as  well.  The  expenditure  made  by  the  Maverick  National 
Bank  was  the  proper  exercise  by  it  of  the  discretion  conferred  by  the 
nature  of  the  transaction.  It  was  reasonable  in  amount,  the  services 
rendered  were  necessary,  and  there  is  no  principle  of  justice  that  re- 
quires that  it  should  lose  the  amount  so  paid.  The  expenditure  was 
to  protect  the  plaintiff's  interest  in  the  property;  was  made  for  his 
sole  benefit,  at  a  place  far  distant  from  his  residence,  and  impliedly 
at  his  request.  The  expenditure,  being  a  proper  one,  was  legally 
authorized,  and  is  a  good  counterclaim  against  the  plaintiff ;  and, 
the  cause  of  action  for  the  balance  of  his  demand  having  been  legally 
discharged  by  payment  into  court,  it  follows  that  there  must  be  judg- 
ment for  the  defendant,  with  costs  from  the  time  of  such  payment. 
Dakin  v.  Dunning,  7  Hill,  30,  42  Am.  Dec.  33;  Becker  v.  Boon,  61 
N.  Y.  332. 


POWELL  V.  TRUSTEES  OF  VILLAGE  OF  NEWBURGH. 
(Supreme  Court  of  Judicature  of  New  York,  1822.     19  Jolms.  284.) 

Special  action  on  the  case.  The  declaration  contained  the  usual 
pioney  counts,  for  costs  and  expenses  paid  out  by  plaintiffs  while 
trustees  of  the  village  of  Newburgh  in  defending  a  suit  for  closing  a 
highway.  They  successfully  defended  the  suit,  but  their  successors, 
the  present  trustees,  refused  to  reimburse  them. 

Spencer,  C.  J.  On  the  argument  of  the  cause,  I  confess  the  in- 
clination of  my  mind  was  strongly  against  the  plaintiff's  right  to  re- 
cover; but  subsequent  reflection  and  examination  has  led  me  to  a 
different  conclusion. 

1  will  state  some  arljudged  cases,  that  bear  strong  analogy  to  the 
present,  and  then  deduce  some  general  rules  from  them.  In  Ram- 
say v.  Gardner,  11  Johns.  439,  the  defendant,  being  in  want  of  money, 
applied  to  the  plaiiuiff  to  inform  him  how  he  should  draw  a  sum  of 
money  from  a  relation  in  Scotland ;  it  resulted  in  the  defendant's 
drawing  a  bill,  which  the  plaintiff  endorsed  and  negotiated;  the  bill 
was  returned  protested,  and  the  plaintiff  had  to  pay  20  per  cent,  dam- 
ages. It  was  objected  to  the  plaintiff's  recovery,  that  the  plaintiff 
was  not  authorized  to  sell  the  bill,  but  that  having  done  so,  and  be- 
come liable  in  damages,  it  was  his  own  fault,  and  he  ought  to  bear 
the  loss.  It  was  decifled,  that  the  plaintiff  acted  as  the  defendant's 
agent  in  the  negotiation  of  the  bill,  without  any  expected  benefit; 
CJoni).ri{.&  A. — \l 


042  F.FKK«'TS  ANP  coNSK()r KNOKS  OF  Tiiv:  Kiu-ATioN        (Part  3 

that  the  daniai;cs  wore  paid  hy  tlu-  plaintiff  as  ai;cnt  ;  ami  ju(l,i;iiiciit 
was  given  fur  the  plaintiff,  hi  I'",\1kiI1  \-.  ratridj^o  and  others,  8  Term 
Rep.  30S.  the  plaintiff's  goods  hai)pened  to  he  on  juruiises  charge- 
able with  rent  ;  they  were  distrained  for  rent  in  arrear,  and  the 
plaintiff  was  obliged  to  pay  the  rent  to  redeem  them;  it  was  held, 
that  he  might  maintain  an  action  for  money  paid  to  the  use  of  the 
original  lessees,  who  were  bound  by  covenant  to  pay  the  rent.  In 
Child  V.  Morley,  8  Term  Rep.  610,  the  ])laintiff,  a  broker,  contracted, 
by  the  authority  of  the  defendant,  for  the  sale  of  stock  at  a  future 
day;  the  defendant  refused  to  make  good  the  bargain  by  paying  the 
difference,  whereupon  the  plaintiff  paid  the  difference,  and  brought 
his  action  against  his  employer;  it  was  decided  that  the  broker 
might  recover  in  a  special  action  on  the  case,  but  not  on  an  implied 
promise,  because  he  had  paid  the  money  voluntarily.  In  the  case  of 
D'Arcy  v.  Lyle.  5  Bin.  441,  it  was  decided,  that  damages  incurred 
by  an  agent,  without  his  own  fault,  in  the  management  of  the  prin- 
cipal's affairs,  or  in  consequence  of  such  management,  must  be  borne 
by  the  principal.  The  case  was  thus :  The  plaintiff  went  to  Cape 
Francois,  with  a  power  of  attorney  to  demand  a  debt  of  Suckley  & 
Co.  there.  On  the  voyage,  the  power  of  attorney  was  lost.  He 
stated  this  to  S.  &  Co.  who  consented  to  deliver  up  the  goods  of 
the  defendant ;  but  before  the  goods  were  delivered,  they  were  at- 
tached by  the  creditors  of  S.  &  Co.  The  plaintiff  interposed  a  claim 
in  behalf  of  the  defendant,  and  the  goods  were  delivered  to  the  plain- 
tiff, by  the  decree  of  the  Chamber  of  Justice.  The  plaintiff  then  sold 
the  goods,  and  remitted  the  proceeds  to  the  defendant.  The  plaintiff 
was,  afterwards,  compelled,  in  an  arbitrary  manner,  and  by  duress,  to 
let  judgment  go  against  him,  at  the  suit  of  the  attaching  creditors, 
upon  false  allegations,  and  was  compelled  to  pay  them  their  claim. 
It  was  held,  that  the  plaintiff  might  recover  of  the  defendant,  his  prin- 
cipal, the  amount  thus  paid,  not  exceeding  the  value  of  the  defend- 
ant's goods.  Ch.  J.  Tilghman  expressed  his  approbation  of  the  law, 
as  laid  down  by  Heineccius,  b.  13,  p.  269,  270,  and  2  Ersk.  Inst.  534, 
that  damages  incurred  by  an  agent,  or  in  the  course  of  the  princi- 
pal's affairs,  or  in  consequence  of  such  management,  were  to  be 
borne  by  the  principal.  It  was  admitted,  that  where  an  agent,  on  a 
journey,  on  business  of  his  principal,  was  robbed  of  his  own  money, 
the  principal  would  not  be  answerable,  because  carrying  his  own 
money  was  not  necessarily^  connected  with  the  business  of  his  prin- 
cipal. So,  if  he  received  a  wound,  the  principal  is  not  bound  to  pay 
the  expense  of  the  cure,  for  it  was  the  personal  risk  of  the  agent. 
The  distinction  appears  to  be,  between  those  cases  which  arise  natu- 
rally out  of  the  agency,  and  such  as  are  casual,  or  oblique,  not  pro- 
ceeding directly  from  the  execution  of  the  mandate.  Upon  this  prin- 
ciple stands  the  doctrine  of  contribution  towards  a  general  average  ; 
wdiere  the  owner  of  a  vessel  cuts  away  a  mast,  to  avoid  impending 


Ch.  2)  DLTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  643 

ruin,  there  the  owners  of  goods  are  personally  liable  for  the  amount 
of  contribution,  on  the  ground  that  the  act  was  done,  by  the  general 
agent,  for  the  safety  of  the  property.  In  Stocking  v.  Sage  et  al., 
1  Conn.  522.  Ch.  J.  Swift  laid  down  these  principles,  to  which  the 
other  Judges  agreed:  "That  where  an  agent,  acting  faithfully,  with- 
out fault,  in  the  proper  service  of  the  principal,  is  subjected  to  ex- 
pense, he  ought  to  be  reimbursed.  If  sued  on  a  contract  made  in 
the  course  of  his  agency,  pursuant  to  his  authority,  though  the  suit 
be  without  cause,  and  he  eventually  succeeds,  the  law  implies  that 
the  principal  will  indemnify  him,  and  refund  the  expense;  for  this 
he  can  maintain  an  action  of  indebitatus  assumpsit;  and  the  proof 
of  these  facts  will  be  sufficient  to  warrant  the  jury  to  find  the  prom- 
ise." These  principles  are  precisely  applicable  to  this  case:  the 
plaintiffs  were  sued  for  an  act  done  by  them  as  the  agents  and  trus- 
tees of  the  corporation,  in  the  course  of  their  agency,  and  pursuant 
to  authority.  They  acted  faithfully  and  without  fault,  and  are  en- 
titled to  recover,  for  every  thing  reasonably  and  necessarily  dis- 
bursed in  and  about  their  defence  and  which  could  not  be  included 
in  the  taxation  of  costs,  in  the  judgment  recovered  against  Gard- 
ner.^^ 

Judgment  for  the  plaintiffs. 


CLIFTON  v.  ROSS. 

(Supreme  Court  of  Arkansas,  1804.     GO  Ark.  07.  2S  S.  W.  10S.1.) 

Plaintiff,  a  blacksmith,  at  the  request  of  defendant,  a  farmer,  pur- 

chased  Jfli  him  a  mill.  ~No  price' was  fixed  by  Ross,  but  he  refused 

Jo  take  the  mill  because  he  feared  it  was  too  small.     Clifton  had  pur- 

^hased  the  mill  in  "His  own  name,  aiijtSvas  obliged  to'payfor  it,  and 

iTQw  sues  _derengant  to  recover  the  price.     Judgment  for  defendant 

and  plaintiff  apijcale^  ~  ~ 

kiDDicK,  J.^*-  [After  stating  the  facts:]  The  (jucstion  for  us  to 
determine  is  wh^her  the  circuit  court  erred  in  instructing  the  jurv 
thatJfjToprice  was  agreed  upon  for  the  mill  they  must  fmd  for de- 
femhint^  To  constitute  a  sale  it  is  not  neces.sary  that  the  parties  a."vec 
""  a  price,  for,  Tfno  price  is  fixed  by  tbe  partjes^  the  law  hiiplies  that 
Jt_shain)e  what  the  thing  sold  is  reasonably  worth.    This  is  'said  To" 

»'  An  fiKciif  wlio  is  sued  on  his  princii»al's  account  need  not  let  jikK'ihciiI 
KO  against  liiiii.  He  may  <lefend  and  atipcal  tlie  case,  ami  tlic  princ  ipal  must 
reimburse  liini  for  all  proper  cliartrcs.  Klrst  .Nat.  I'.aiik  v.  'rciim-y,  a:>,  III. 
App.  .-»44  (1S021;  Selz  v.  (;utliman.  C.L'  111.  Ap]).  (IL'l  (is'.ii;).  in  wiiirli"  m  sherill 
was  suet!  f<»r  levying  on  Koods  pointed  ont  to  him  by  his  principal:  Shcan-r 
V.  Cuanllan  Trust  Co..  ].■'.(!  Mo.  App.  liL'O.  llC  S.  W.  4.-,(;  (1000).  in  \vlii(  li  an 
a^ent  was  .siu'd  on  hrcach  of  a  warraniy.  Neither  need  he  wail  to  he  sm-d, 
hut  he  may  pay  dama;,'«'s  without  salt,  and  recover  of  his  i»iinclpal  to  the 
e.xtent  of  the  actual   liahillty.     Saveland  v.  <;n>cn,  :;<;  Wis.  ClL'  (is?.")). 

32  I'art  of  the  opinion  Is  omitted. 


-7. 


644  EFFECTS   AND    CONSHQT'KNCES    OF   Till:    KIOl.A'PKm  (Part   3 

1>o  olcnicntarv  law.  l-.cnj.  Sales  (Bennett's  Ed.)  90,  note;  Taft  v. 
Travis,  136  Mass.  95.  Hut,  if  the  tesliniony  of  Clifton  is  true,  he 
(.lid  not  sell  the  mill  to  Ross,  but  purchased  it  for  him ;  and  it  is  a 
general  rule  of  law  that  all  reasonable  and  necessary  outlays  and  adT- 
vanees  paid  by  an  agent  for  his  principal  in  the  course  of  his  employ- 
ment must  be  repaid  by  the  latter.  Whart.  Ag.  §§  313,  314;  Mechem, 
Ag.  543;  Bibb  v.  Allen.  149  U.  S.  481,  13  Sup.  Ct.  950,  37  L.  Ed. 
819.  A  request  to  undertake  an  agency  or  employment,  the  proper 
execution  of  which  involves  the  expenditure  of  money  on  the  part  of 
the  agent,  operates  not  only  as  an  implied  request  on  the  part  of  the" 
principal  to  incur  such  expenditure,  but  also  as  a  promise  to  repay  it. 
!Mcchem,  Ag.  544.  If,  without  being  induced  by  fraud  or  misrepre- 
sentation on  the  part  of  Clifton,  Ross  requested  Clifton  to  purchase 
a  mill,  and  Clifton,  in  the  execution  of  such  an  undertaking,  or  as  a 
result  of  it,  was  compelled  to  pay  for  the  mill,  then  Ross  is  liable  for 
such  expenditure,  if  the  same  be  reasonable,  and  this  whether  there 
was  any  price  agreed  upon  or  not.  In  the  absence  of  any  agreement 
or  direction  about  the  price  to  be  paid,  Clifton  would,  in  such  a  case, 
ordinarily  have  the  right  to  pay  the  fair  market  price  for  such  mill, 
and  to  recover  the  same  from  Ross.^*  *  *  * 
Judgment  reversed. 

33  Accord:  Greene  v.  Goddard,  9  Mete.  (Mass.)  212  (184.5),  In  which  the 
agent  was  allowed  to  recover  expenses  incurred  by  reason  of  the  failure  of 
the  drawee  of  bills  drawn  by  the  agent  for  the  principal.  The  principal  made 
good  the  face  of  the  bills,  but  refused  to  pay  the  expenses.  See  Irions  v. 
Cook,  33  N.  C.  203  (1S.")0),  in  which  the  third  person  refused  to  lease  to  the 
principal,  and  the  agent  took  the  lease  in  his  own  name  and  paid  the  inter- 
est, and  Bibb  v.  Allen,  149  U.  S.  481,  497,  13  Sup.  Ct.  950,  37  L.  Ed.  819  (1893). 

The  I'ight  of  action  does  not  accrue  before  the  agent  has  paid  the  money. 
The  obligation  to  pay  tlie  indemnity  does  not  ripen  into  a  cause  of  action  be- 
fore the  thing  to  be  indemnified  against  has  happened.  Otter  Creek  Lumber 
Co.  V.  McBlwee,  37  111.  App.   285  (1S90). 

As  to  recovery  after  termination  of  the  agency,  of  money  expended  during 
the  agency,  see  ante,  p.  211  ff. ;  also,  IT.  S.  v.  .Jarvis.  2  Ware  (Dav.  274)  278,  Fed, 
Cas.  No.  15,468  (1S4<>),  supra,  p.  2G4,  allowing  the  agent  to  recover  for  of- 
fice rent  and  furnishings ;  Meyer  v.  Pulitzer  Tub.  Co.,  150  Mo.  App.  170,  136 
S.  W.  5  (1911,),  in  whicli  the  court  says:  "The  limitation  on  the  rule  above 
referred  to  recognizes  the  right  of  the  principal  to  revoke  the  agency,  but 
reckons  with  such  equities  as  may  have  accrued  in  the  agent's  favor  while 
acting  in  good  faith  toward  executing  the  trust;  for,  though  the  principal 
may  revoke  an  agency  so  given  for  an  indefinite  time,  the  circumstances  of 
the  case  not  infi-equently  present  a  situation  in  which  there  inheres  a  right 
to  some  compensation  against  the  princii)al  on  the  precepts  of  natural  jus- 
tice alone,  notwithstanding  the  abstract  right  of  revocation  which  tlie  law 
generously  concedes.  In  this  view,  even  wliere  an  indefinite  agency  has  been 
revoked,  if  it  appears  tlie  agent,  induced  by  his  appointment,  has  in  good 
faith  incurred  expense,  devoted  time,  and  bestowed  labor  in  tlie  matter  of 
the  agency  without  having  a  suthcient  opijortunity  to  recoup  such  outlays 
from  the  undertaking,  the  principal  will  be  re(iuired  to  compensate  him  in 
that  behalf,  for  the  law  will  not  permit  one  to  thus  deprive  another  of  value 
without  awarding  just  compensation.  But  the  just  principle  acted  upon  by 
the  courts  in  the  circumstanfes  suggested  requires  no  more  than  in  every 
instance  the  agent  shall  be  allorded  a  reasonable  ojiportunity  to  avail  him.self 
of  the  preliminary  expenditure  and  efforts  put  forward  to  the  end  of  execut- 
ing the  authority  conferred,  and,  if  it  is  denied  him,  that  the  principal  should 


Ch.  2)  DUTIES    AXD    LIABILITIES    OF    PRIXCIPAL    TO    AGENT  6-ii 


BURBY  V.  ROOME. 


/ 


(Common  Pleas  of  New  York  City  and  County,  1894,     7  Misc.  Rep.  167,  27 

N.  Y.  Supp.  250.) 

From  judgment  for  plaintiff  defendant  appeals. 

GmcERiCH,  J.  The  plaintiff's  assignor,  one  Schell,  was  the  owner 
of  certain  premises  in  this  city,  and  the  defendant,  Roome,  was  his 
Tgent  to'coirecTfhe  rents  of,  and  to  care  for,  such  property.  Schell 
had  "sent  the  following  letter  of  instructions  to  the  defendant,  who 
Hoes  not  deny  having  received  it:  "New  York,  June  7,  1892.  Mr. 
Roome — Dear  Sir:  Concerning  my  house,  131  West  25th  street,  I 
have  made  arrangements  with  Mantel,  32  Carmine  St.,  to  keep  the 
roof  in  repair  for  one  year,  and  with  O'Brien  &  Ryder,  plumbers,  154 
Spring  street,  to  attend  to  the  plumbing  work,  tank,  and  engine  for 
one  year.  *  *  *  jj^  case  you  need  the  services  of  any  of  these 
people  at  any  time,  to  do  any  of  the  above  work,  please  send  for  them, 
and  they  will  do  the  work.     [Signed]  Edward  P.  Schell." 

In  January,  1893,  the  pipes,  water-closets,  etc.,  upon  the  premises 
were  frozen  up,  and  the  services  of  a  plumber  were  required.  One 
YUtTng'was  called  in  by  the  defendant's  brother-in-law  (who  is  ad- 
miTted  to  have  had  authority  to  act  for  him  in  the  matter)  to  do  the 
work  of  repairing.  Young's  bill  for  his  services  amounted  to  $119.99, 
whTcfi  defendant,  after  some  delay,  paid.  Upon  accounting  to  Schell 
for'rents  received,  he  retained  this  amount,  for  the  recovery  of  which 
thrs~~action  was  brought.  The  answer  was  a  general  denial,  and  set 
uTra~ counterclaim  for  said  last-mentioned  sum  paid  by  him  to  Young 
for  such  services.  The  justice  rendered  judgment  in  favor  of  the 
plaintiff  for  the  full  amount  claimed,  and  the  defendant  has  brought 
this  appeal. 

In  speakjn_g.of  anagent's  right  to  recover  his  disbursements,  made 
for  the  benefit  of  his  principal.  Story,  in  his  work  on  Agency  (7th 
Ed.  §  336,  p.  412),  says:  "But  this  liability  of  the  plaintiff  proceeds 
upon  the  ground  that  the  advances,  expenses,  and  disbursements  have 
beenproperly  incurred,  and  reasonably  and  in  good  faith  paid,  with- 
ouratiydc fault  on  the  part  of  the  agent.  ♦  *  *  However,  if  tbe 
agent  has'voTuntarily  and  officiously,  and  without  authority,  made 
advances  or  payments,  tbe  principal  will  not  be  bound  to  any  rcim- 

make  foriijionsatlon  arrordlimly.  Olovor  v.  Ilcndcrsoti,  120  Mo.  .3(57.  2.")  S.  W. 
17.").  41  Am.  St.  lU'p.  <;y."):  Iloyul  Ki'incdy  C'n.  v.  (Jrc^'ory  (Jnicor  Co.,  !»(»  Mo. 
App.  .'>.'{;  Davis  v.  I'.!irr.  12  .\.  V.  SI.  l{«'p.  HI:  .Mcclicm's  An»>iK'y,  §  ('.20.  It 
l.s  otiviiHis  that  tlie  priiiiiplo  rcllot-tt'il  in  the  limitation  on  tlio  rule  aliovi-  ad- 
vfTtt'd  to  nIToids  itliiiMtifT  no  riiriit  «tf  n-fovcry,  f<ir  Ids  cyldcnto  is  conclnsivc 
to  till-  flYcct  tii.it  iic  enjoyed  tlie  ai^ency  lor  11  yi-ars,  aiid  it  yielded  to  1dm 
a  ronsideiiihie  jirolil  dnriiiK  all  of  tlial  time.  It  appenrs  as  well  tliat  no  ex- 
penditnrc  was  made  by  him  in  that  lielniif  other  than  tlic  .$}.">.  Id  iiaid  out  in 
the  tirst  instance  to  liurt.selier.  and  lids  was  recouped  from  hi.s  conunissions 
while  executing  the  agency  in  years  gone  hy." 


CIO  EKiM:("rs  ANi>  roNsiH.MKNt'i'.s  ov   1111'.  Kiu.ATiox        (Part  H 

bursomeiU  thereof,  for  it  will  be  impukHl  lo  the  fault  or  nej;li«^ence 
"or  unskill fulness  of  the  agent." 

As  laid  down  in  Fowler  v.  Bank,  67  N.  Y.  13S.  145.  146.  the  rule 
is  that:  "An  agent  is  entitled  to  be  indemnified  against  all  damages 
and  losses  which  are  incurred  by  him,  and  all  cost  to  which  he  may 
be  subjected,  in' the  course  of  his  agency,  without  fault  on  his  part."  "* 

See,  also.  Monnct  v.  Heller  (Super.  N.  Y.)  5  N.  Y.  Supp.  913. 

Under  these  rules,  the  agent  in  the  present  case  is  not  entitled  to 
recover.  Having  acted  in  direct  disobedience  of  his  principal's  in- 
structions, he  incurred  the  expenses  clearly  "without  authority." 

The  judgment  should  be  affirmed,  with  costs. 


SECTION  3.— THE  AGENT'S  LIEN 


BYERS  V.  DANLEY. 

(Supreme  Court  of  Arkansas,  1S71.     27  Ark.  77.) 

Suit  in  equity  by  Danley  against  Byers  and  others  to  quiet  and  per- 
fect title,  and  for  the  possession  and  rents  of  certain  lands.  From  a 
decree  giving  Danley  possession  an  appeal  is  taken.  One  Smith,  as 
agent  of  Northrop,  purchased  and  paid  for  the  lands.  Northrop  failed 
to  pay  Smith  his  compensation,  expenses  and  reimbursement.  After 
a  long  time  Smith  took  possession  of  the  land  and  paid  taxes  on  it  for 
12  years,  when  he  quitclaimed  to  Danley,  who  knew  all  the  facts.  He 
held  the  lands  for  five  years  and  paid  taxes  until  the  commencement  of 
this  suit.  Byers  and  the  other  defendants  claimed  under  deeds  from 
the  original  grantor  and  his  assignees.  These  deeds  plaintiff  claimed 
were  fraudulent. 

Bexxett,  J.^^  *  *  *  It  being  evident,  from  the  above  agree- 
ment and  authorities,  that  Smith  can  have  no  trust  declared  in  his 
favor,  it  may  be  asked,  inasmuch  as  he  was  the  agent  for  Northrop 
and  advanced  the  money  to  make  the  purchase,  wdiat  equities  he  had 
for  such  advances,  or  what  remedy  had  he  against  Northrop  or  the 
lands  purchased? 

"'4  Accord:  Recknian  v.  Wilson,  01  Cal.  .^3.5  (1SS2),  in  wliich  an  asent  in 
•  harse  of  i»roi)crt.v  rolmilt.  after  a  lire;  St.  L.,  A.  &  T.  11.  11.  Co.  v.  Tiionuis, 
S.J  111.  404  (1S77).  in  which  an  ajjont  defended  taking  his  jirincipal's  money 
on  the  ground  tliat  it  liad  heen  turned  over  under  coniimlsion  to  another 
emjiloye.  Money  paid  by  an  agent  on  a  contract  for  his  priii<ii)al  must  be  on 
the  contract  he  was  autliorized  to  make,  or  he  will  not  be  entitled  to  reim- 
bursement. Ross  V.  Clark,  IS  Colo.  90,  .31  Pac.  497  (1S9.3).  Money  i)aid  on  a 
contract  known  l»y  the  agent  to  be  illegal  cannot  be  recovered.  Thomjison 
liros.  V.  Cumniings.  08  Ga.  124  (ISSl) ;  Samuels  v.  Oliver,  1:50  111.  7:5,  22  iX. 
K.  499  (ISKJi.  There  can  be  no  recovery  for  expen.ses  caused  by  the  agent's 
negligence,  Veltum  v.  Koehler,  S.5  Minn.  125,  88  N.  W.  432  (1901). 

•'15  Part  of  the  opinion  is  omitted. 


Ch.  2)  DUTIES    AND    LIABILITIES    OP    PRINCIPAL    TO    AGENT  647 

First,  if  Northrop  was  a  non-resident  of  Arkansas,  as  alleged  in  the 
bill,  he  could  have  made  out  his  account  against  him,  attached  it  to  the 
proper  affidavit,  under  the  statute,  attached  the  lands  and  ha^l  them 
sold  to  pay  the  debt.  See  Gould's  Digest,  163,  §§  1,  2,  3,  etc.  Here 
would  have  been  a  complete  remedy  at  law. 

Second,  Smith  could  have  sent  h..  account  to  Illinois  and  there 
brought  assumpsit  for  money  paid  for  Northrop,  at  his  request,  and 
Northrop,  not  being  insolvent,  he  in  this  way  had  another  complete 
remedy  at  law. 

Independent  of  these  personal  remedies,  agents  have,  for  the  pay- 
ment of  their  commissions,  advances,  disbursements  and  responsibili- 
ties, in  the  course  of  their  agency,  an  established  right,  which  in  many 
cases  becomes  more  important  and  effectual  than  any  other  means  of 
remedial  redress ;  that  is  to  say,  an  agents'  lien.  Story,  in  his  work  on 
Agency,  433,  defines  this  lien  "to  be  a  right  in  one  nan  to  retain  that 
which  is  in  his  possession,  belonging  to  another,  until  certain  demands 
of  him,  the  person  in  possession,  are  satisfied.  It  is  a  qualified  right 
therefore,  which  may  be  exercised  over  the  property  of  another  per- 
son. 

These  liens  of  agents,  like  all  liens,  arise  by  operation  of  law.  Chief 
Justice  Gibbs,  in  Wilson  v.  Heather,  5  Taunt.  642,  said :  "The  right 
of  lien  does  not  arise  out  of  any  contract  whatsoever,  but  out  of  a 
right  to  hold  property,  until  the  party  claiming  the  lien  has  been  paid 
for  the  operation  he  performs." 

Thus  we  see,  if  Smith  was  an  agent  of  Northrop  and,  in  carrying 
out  the  objects  of  his  agency,  he  advanced  money  or  incurred  expenses 
for  his  principal,  he  had  a  lien  and  only  a  lien  upon  the  title  papers 
and  the  land  for  his  commissions,  services,  expenses  and  advances, 
which  grew  out  of  this  relation  and  was  incident  to  Northrop's  indebt- 
edness to  him.  The  extent  of  this  was  but  a  mere  right  to  retain  them 
until  his  demands  were  satisfied,  and  in  this  case,  the  property  being 
real  estate,  he  could  retain  it  until  the  rents  and  profits  had  discharged 
the  lien.  In  case  of  a  mortgagee  who  ejects  his  mortgagor,  he  can 
only  hold  the  lanrls  until  the  rents  and  profits  pay  his  debts  or  dis- 
charge his  lien.  So,  if  a  mortgagor  voluntarily  surrenders  the  posses- 
sion, no  absolute  estate  jiasscs  to  the  mortgagee  by  virtue  of  his  pos- 
session, but  sini])!y  a  right  to  retain  the  same  for  certain  purposes  nor 
is  it  any  adverse  holding  so  as  to  ripen  into  a  title,  except  upon  mere 
presumption  of  payment.    2  Hilliard  on  Mortgages,  16. 

It  cannot  be  contended  that  an  agents'  lien  stands  upon  higher  ground 
than  that  of  a  mortgage  created  by  the  solenni  act  of  the  parties. 

Then  Smith,  having  no  title,  could  not  convey  a  greater  one  to  Dan- 
ley,  the  ajjpcllce,  and  having  merely  a  lien  which  could  not  exist  for 
a  moment  without  j)ossession,  it  could  not  be  transferred,  and  the 
effort  of  Smitii  to  release  the  same  to  appellee,  and  delivering  him  the 
possession,  as  alleged  in  the  bill,  destroyed  the  lien  and  the  appellee 
took  nothing  by  his  release.     Story  on  .Agency,  §§  360,  367.     Hence, 


lUS  Et'FlX'TS   AND   CONSKQUKNCKS   OF  THE    RELATION  (Part   3 

appellee  can  have  no  title  or  right  of  possession  to  the  lands  in  con- 
troversy by  reason  of  Smith's  lien.-'"     *     *     * 

Cause  remanded,  with  instructions  to  dismiss  the  bill  for  want  of 
equity.         .  . 

\  / 

UNDERHILL  v.  JORDAN. 

(Supreme  Court  of  New  York,  Appellate  Divisiou,   First  Department,   1902. 
712  App.  Div.  71,  7G  N.  Y.  Supp.  2GG.) 

Action  for  an  accounting  by  Edward  C.  Underbill  against  Nina  Jor- 
dan and  another.  From  a  judgment  for  defendants,  plaintiff  appeals. 
Reversed. 

The  complaint  in  this  action  avers  that  the  plaintiff,  from  about  the 
30th  day  of  April,  1886,  to  on  or  about  the  11th  day  of  May,  1901, 
acted  as  the  agent,  factor,  and  manager  of  the  defendants  under  au- 
thority of  a  written  power  of  attorney ;  that  plaintiff,  under  such  power 
of  attorney,  had  the  entire  management  of  the  property  of  said  de- 
fendants, the  corpus  of  which  originally  amounted  to  $87,766,  and  that 
by  his  judicious  handling  of  the  same  it  increased  to  the  sum  of  $93,- 
266;  that  during  the  time  that  plaintiff  has  been  so  employed  he  has 
received  and  collected  the  sum  of  $159,109.42,  all  of  which  he  has 
turned  over  to  the  defendants,  except  the  sum  of  $7,955.42,  which  he 
now  has  in  his  possession,  and  upon  which  he  claims  a  lien  for  his 
services  and  expenses  paid  in  the  management  of  said  agency;  that 
plaintiff  believes  that  the  reasonable  value  of  his  said  services  is  $7,- 
955.42;  that  he  is  ready,  willing,  and  able  to  account  for  and  pay  over 
to  said  defendants  so  much  of  said  sum  as  the  court  shall  decide,  in 
case  it  shall  decide  he  is  not  entitled  to  the  whole  thereof;  that  no 
agreed  price  has  ever  been  fixed  upon  with  defendants  for  his  said  serv- 
ices, and  that  he  has  necessarily  expended  in  the  management  of  said 
property  the  sum  of  $5,592,  for  which  he  has  had  no  recompense ;  that 
defendants  during  all  the  times  aforesaid  had  been,  and  now  are,  re- 
siding in  Europe,  and  that  he  fears  that,  if  he  should  not  claim  a  lien 
upon  the  amount  retained  for  his  services  and  expenses,  and  should 
pay  over  the  same  to  the  defendants,  they  would  remove  the  same  out 
of  the  jurisdiction  of  this  court,  and  that  said  defendants  could  only  be 
served  with  process  in  a  foreign  jurisdiction.  Wherefore  plaintiff  de- 
mands judgment  for  $13,547.98,  and  that  plaintiff's  lien  upon  the  said 
sum  of  $7,955.42  for  the  amount  of  the  value  of  said  services  and  dis- 
bursements be  defined  and  enforced  against  said  sum;  that  plaintiff 

36  Accord:  Cranston  v.  Philadelphia  Ins.  Co.,  5  Bin.  538  (1813).  Chicker- 
ing  V.  Ilosmer,  12  Mass.  183  (1815). 

An  agreement  to  {,4ve  credit,  or  any  contract  inconsistent  with  a  lien,  is  a 
waiver  of  it.  Stoddard  Woolen  Manufactory  v.  Huntley,  8  N.  H.  441,  31 
Am.  Dec.  198  (1837);  Hall  v.  Jackson,  20  I'ick.  191  (1S3S).  Cf.  Welker  v. 
Appleman,  44  Ind.  App.  099,  90  N.  E.  35  (1900).  in  which  the  contract  was 
found  not  to  be  inconsistent.  'One  of  the  earliest  cases  recognizing  an  agent's 
lien  fin  this  case  a  factor's)  is  Kruger  v.  AVilcox,  Ambler  252  (1755),  cited  in 
Kewhall  v.  Dunlap,  14  Me.  180,  31  Am.  Dec.  45  (1841). 


Ch.  2)  DUTIES    AND    LIABILITIES    OF    PRINCIPAL    TO    AGENT  649 

have  judgment  against  said  defendants  for  whatever  sum  he  may  be 
entitled  to  above  said  sum  of  $7,955.42;  and  that  the  defendants  be 
restrained  from  interfering  with  said  last-mentioned  sum  until  the  de- 
termination of  this  action ;  and  for  such  other  and  further  relief  as  to 
the  court  shall  seem  just  and  equitable.  The  defendants  demurred  to 
the  complaint  upon  the  ground  that  it  failed  to  state  facts  suflficient 
to-ronstiTOt'e  a  cause  of  action,  which  demurrer  the  court  below  sus- 
tained, and  from  the  judgment  entered  therein  dismissing  the  com- 
plaint' thTs  appeal  is  taken. 

Hatch,  J.'^  *  *  *  -^Yg  ^j.g  ^jgo  of  opinion  that  sufficient  facts 
are  alleged  in  this  complaint  to  establish  a  lien  in  favor  of  the  plaintiff 
U£on_the  fund  in  question,  at  least  to  the  extent  of  his  claim  for  ex- 
penses ^d  disbursements  paid  out  by  the  plaintiff  in  its  management. 
nr^Iuller  V.  Pondir,  55  X.  Y.  325,  14  Am.  Rep.  259,  it  was  said  by 
Judge  Allen :  "An  agent  may  have  a  lien  on  the  property  of  his  prin- 
cipal for  moneys  advanced  or  liabilities  incurred  in  his  behalf;  and. 
It  moneys  have  been  advanced  or  liabilities  incurred  upon  the  faith  of 
the 'solvency  of  the  principal,  and  he  becomes  insolvent  while  the  pro- 
ceeds and  fruit  of  such  advances  or  liability  are  in  the  possession  of 
the  agent,  or  within  his  reach,  and  before  they  have  come  to  the 
actual  possession  of  the  principal,  within  every  principle  of  equity  the 
agent  has  a  lien  upon  the  same  for  his  protection  and  indemnity.  If 
■necessar^Fo  his  protection,  the  plaintiff  would  have  been  permitted  to 
repudiate  the  agency,  and  assume  that  position  which  would  best  pro- 
tect himself  from  loss  by  reason  of  the  insolvency  of  his  principal." 

The  evident  reason  why  the  lien  is  given  is  that  by  the  expenditure 
made  and  liabilities  assumed  the  agent  has  benefited  the  principal, 
and  protected  the  fund,  or,  at  least,  improved  the  principal's  condition. 
As  the  irresponsibility  of  the  principal  would  defeat  the  right  of  the 
agent  in  securing  reimbursement,  equity  raises  out  of  such  situation 
for  his  protection  a  lien  upon  the  fund.  It  must  follow,  therefore, 
that  whenever  a  condition  exists  which  would  cause  loss  to  the  agent 
fi  he  partecTwith  the  funds  in  his  hands,  equity  will  interpose  so  far 
as'To~protect  the  agent's  right  in  the  premises,  and  raise  out  of  the 
condition  a  lien  upon  the  fund.  The  complaint  avers  that  the  de- 
Tenclants  are  residents  of  England,  and  that,  if  he  parts  with  the  pos- 
se'sslorrof  the  money,  it  will  be  removed  beyond  the  jurisdiction  of 
"iTie  court  and  its  process.  In  such  case  the  same  reasons  exist  for 
"lupportin^  a  lien  upon  the  fund  as  would  exist  in  the  case  of  in- 
soiyency.  It  seems  clear,  therefore,  that  this  complaint  states  a  per- 
Tectly  good  cause  of  action  for  equitable  interposition. 

ItJoUpws  that  both  the  final  and  interlocutory  judgments  should 
be  reversed,  with  costs  to  the  plaintiff  in  this  court  and  in  the  court 
below,  and  leave  given  to  the  defendants  to  answer  within  20  days, 
upon  the  payment  of  such  costs. 

•  T  The  rt'Ht  of  tlie  opinion  l.s  on  page  818. 


650  EFFECTS   AND   CONSKyUKNCES   OF  THE    KKLATION  (Part   3 

CHAPTER  III 
LIABILITY  OF  THE  AGENT  TO  THE  THIRD  PERSON 


SECTION   1.— IN  CONTRACT 

L    GlCNERAL  Rui.e 


M 


ANDERSON  v.  TIMBERLAKE. 

(Supreme  Court  of  Alabama,  189(5.     114  Ala.  377,  22  South.  431,  G2  Am.   St. 

Rep.   105.) 

Action  on  the  common  counts  by  Timberlake  against  Anderson.  The 
latter  was  in  fact  a  mere  agent  of  the  North  Alabama  Lumber  Corn-" 
pany  running  their  "Crow  Creek  Mill."  Timberlake  furnished  money 
to  pay  the  hands,  and  goods  and  merchandise  for  the  mill.  The  com- 
pany was  bankrupt  and  plaintiff  testified  that  he  gave  credit  solely  to 
Aifdersqri.'J  There  was  much  evidence  contra. 

Bricki;i,l,  C.  J.^  The  legal  presumption  is,  when  a  known  agent 
deals  or  contracts  within  the  scope  of  his  authority,  that  credit  is 
extended  to  the  principal,  and  not  to  the  agent;  and  that  the  dealing 
is  the  act,  or  the  contract  is  the  engagement,  of  the  principal  alone, 
as  if  he  were  personally  present  and  acting  or  contracting.  This  pre- 
sumption prevails  in  the  absence  of  evidence  that  credit  was  given 
to  the  agent  exclusively,  and  the  burden  of  proof  rests  upon  the  party 
seeking  to  charge  him  personally.  If  the  contract  or  promise  is  hi 
writing,  its  construction  and  effect  are,  ordinarily,  questions  of  law 
for  the  decision  of  the  court.  But  when  the  contract  or  promise  is 
verbal,  the  question  whether  the  credit  was  given  to  the  agent  in  ex- 
clusion of  the  credit  of  the  principal  is  a  question  of  fact,  for  the 
determination  of  the  jury,  to  be  ascertained  from  a  consideration  of 
all  the  circumstances  attending  the  transaction.  Mechem,  Ag.  §  558; 
1  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  1119,  1120;  Whitney  v.  Wyman, 
101  U.  S.  392,  25  L.  Ed.  1050.  In  1  Am.  Lead.  Cas.  (5th  Ed.)  764, 
speaking  in  reference  to  verbal  contracts  made  by  or  through  an 
agent,  it  is  said  that:  "When  the  relation  of  principal  and  agent  ex- 
ists in  reference  to  a  contract,  and  is  known  to  the  other  party  to  ex- 
ist, and  the  principal  is  disclosed  at  the  time  as  such,  the  contract  is 
the  contract  of  the  principal,  and  the  agent  is  not  bound,  unless  credit 
has  been  given  to  him  expressly  and  exclusively,  and  it  was  clearly 

1  Part  of  the  opinion  is  omitted. 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  051 

his  intention  to  assume  a  personal  responsibilty ;  -  but  if  credit  was 
given  to  him  exclusively,  and  he  intended  to  give  his  own  personal 
engagement,  he  will  be  bound;  and  this,  upon  sufficient  evidence,  is 
a  question  for  the  jury,  on  all  the  circumstances  of  the  case."  In 
the  recent  case  of  Humes  v.  Furnace  Co.,  98  Ala.  461,  13  South.  368. 
it  was  said  by  Coleman,  J. :  "To  hold  an  agent  personally  liable  in 
cases  in  which  he  discloses  his  principal,  and  that  the  services  to  be 

TCTT^ered  are  for  the  sole  benefit  of  the  principal,  and  the  contract 
TS^vithiri  the  scope  of  his  authority,  it  must  be  shown  that  the  credit 

^was^gTveri  exclusively  to  the  agent,  and  that  the  agent  was  informed 
ofTHaFTact." 

'  Applying  this  well-settled  principle,  the  instructions  to  the  jury, 
given  at  the  instance  of  the  plaintiff,  numbered  1,  2,  and  4,  are  essen- 
tially erroneous.  They  proceed,  manifestly,  on  the  theory  that  the 
principal,  the  North  Alabama  Lumber  &  ^Manufacturing  Company, 
and  the  defendant,  as  agent,  were  or  could  be  bound,  jointly  or  sev- 
erally, by  the  same  contract  or  engagement,  or  that  the  promise  of  the 
one  cotfld  be  collateral  to  the  promise  of  the  other,  while  the  true 
inquiry — an  inquiry  to  be  solved  by  the  jury  upon  a  consideration  of 
the  course  of  dealing  between  the  parties,  and  all  the  attending  facts 
a!fd"'clrcumstances — was  whether  any  credit  was  given  to  the  principal, 
oT'^wlTether  it  was  given  exclusively  to  the  defendant,  and  it  was  his 
intention  to  become  the  sole  debtor  to  the  plaintiff.  The  fact  that  the 
defendant,  at  the  commencement  of  the  transaction  from  which  the 
account  originated,  may  have  directed  the  accounts,  as  created,  to  be 
charged  to  him,  or  to  himself  and  Kilpatrick,  to  which  so  much  of 
prominence  is  given  by  the  instructions,  is  far  from  being  decisive  that 
he  intended  to  become  the  sole  debtor,  or  a  debtor  jointly  with  Kil- 
patrick, to  the  exclusion  of  all  liability  on  the  part  of  the  North  Ala- 
bama Lumber  &  Manufacturing  Company.  Nor  is  it  decisive  that 
the  plaintiff  did  not  extend  any  credit  whatever  to  that  company.  The 
purpose  of  the  direction  may  have  been  only  to  separate  and  distin- 
guish the  accounts  tiie  defendant  was  creating  as  agent  from  the  in- 
dividual dealings  he  was  having,  or  might  have,  with  the  plaintiff. 
As  a  fact,  the  direction  is  for  the  consideration  of  the  jury,  to  be 
taken  in  connection  with  all  other  facts  and  circumstances  attending 
the  dealings  between  tiie  parlies,  in  ascertaining  whether  exclusive 
credit  was  extended  to  the  defendant,  and  whether,  with  knowledge 
of  that  fact,  he  intended  to  assume  individual  responsibility.  ♦  *  * 
Reversed  and  remanded. 

2  In  Tiller  v.  Sprjidlt-y.  .'50  (In.  P,'t  (ISCO).  Wnrnor,  J.,  quotes  (lio  rule  ns 
Htnf«-(1  l.y  <"li.  Kent:  "It  is  a  u'eiKTiil  rule.  slJiiidiiij,'  on  slroiij,'  fouml;iti<)ns, 
and  iirrvadiMK  every  system  of  .inrispru(len<-i',  that  where  an  anient  is  duly 
•  onslilnted  :ind  ii;imes  his  priiK  i|.Ml,  and  <  iml  r.-uls  in  liis  name,  tiie  principal 
is  respuiibibie,  and  uut  Uiu  agent"     2  Keufb  (Join.  UoO. 


lJ5w  EFFECTS  AND   CONSEQUENCES   OF  TUE   UELATION  (Part   3 

HOVEY  V.  PITCTTER. 

(Suiiroiiio  (,'ourt  of  iMissouri.  Isr.O.     13  Mo.  101.) 

Ass.impsit  to  recover  $200,  wliicli  it  was  allcfjcd  Hovey  agreed  to 
pay  if  plaintitT,  as  sheriff,  would  add  this  to  the  $300  reward  he  was 
about  to  offer  for  the  apprehension  and  deHvery  of  an  escaped  pris- 
oner wanted  on  a  charge  of  murder.  Plea  the  general  issue,  and 
judgment  for  plaintiff. 

Xapton,  J.^  The  principal  and  most  important  objection  to  the 
judgment  in  this  case  arises  from  the  instructions  which  the  court 
gave  on  the  subject  of  agency.  The  defendant  introduced  proof  to 
show  that  he  made  no  contract  with  Pitcher,  in  relation  to  the  reward 
offered  by  the  latter  for  the  apprehension  and  delivery  of  Harper, 
and  also  some  evidence  to  show  that,  if  he  made  any,  it  was  in  the 
character  of  an  agent  for  Meredith.  The  Circuit  Court  gave  two 
instructions  on  this  subject,  one  at  the  instance  of  plaintiff,  and  the 
other  asked  by  the  defendant.    The  latter  was  correct,  the  former  not. 

It  does  not  follow,  because  a  person  discloses  himself  to  be  an  agent, 
and  gives  the  name  of  his  principal,  that  he  is  therefore  not  person- 
ally liable.  The  person  with  whom  he  is  dealing  may  be  unwilling  to 
trust  the  principal,  and  yet  willing  to  contract  with  the  agent,  upon 
his  personal  responsibility ;  and  it  then  becomes  a  question  of  fact, 
to  be  determined  by  the  circumstances  of  the  case,  whether  the  credit 
was  given  to  the  agent  or  not.  The  conversation  and  acts  of  the  par- 
ties, at  the  time  of  the  contract,  must  necessarily  be  evidence,  indeed, 
in  the  absence  of  any  written  agreement,  the  only  evidence  of  what 
the  contract  was.  These  are  the  res  gestae — the  contract  itself.  The 
admission  of  such  testimony  does  not  impair,  to  the  slightest  extent, 
that  well  settled  rule  that  a  party  cannot  make  evidence  for  himself ; 
that  his  declarations  in  his  own  favor  are  not  admissible.  This  rule 
is  understood  to  be  confined  to  declarations  and  acts  ex  post  facto, 
if  I  may  be  allowed  the  phrase — made  in  the  absence  of  the  party  con- 
tracted with  and  after  the  transaction  has  passed  away. 

The  second  instruction  given  at  the  plaintiff's  instance  is  certainly 
obscure;  but  if  I  understand  it  aright,  it  is  calculated  to  mislead. 
The  premises  laid  down  in  the  first  branch  of  the  instruction  are  fol- 
lowed by  a  conclusion,  which  seems  to  have  no  bearing  upon  the  case, 
and  so  far  might  be  regarded  as  harmless,  but  a  second  sequence  is 
drawn  from  them  in  the  concluding  paragraph,  which  not  only' makes 
the  meaning  of  the  entire  instructions  very  obscure,  but  is  in  itself 
erroneous.  Had  the  jury  been  told  that  the  defendant's  declarations 
that  he  was  agent,  and  was  authorized  to  offer  a  reward,  were  not 
sufficient  of  themselves  to  authorize  a  verdict  in  his  favor,  no  objec- 
tion could  have  been  made  to  the  proposition.     For  these  facts  may 

8  Part  of  the  opiuiou  is  omitted. 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  653 

have  existed,  and  yet  the  plaintiff  may  not  have  thought  proper  to 
give  Meredith  credit,  and  may  have  preferred  contracting  with  the 
defendant.  There  was  evidence  to  warrant  this  hypothesis  and  coun- 
ter evidence  which  the  jury  were  to  determine.  But  the  instruction 
proceeds  to  direct  the  jury  that  from  such  declarations  alone,  unsup- 
ported by  other  evidence,  they  must  not  find  Hovey  an  agent.  It  was 
immaterial  whether  Hovey  was  agent  or  not ;  that  is,  whether  he 
was  an  authorized  agent  or  not.  The  controversy  was  not  between 
him  and  his  supposed  principal,  but  between  him  and  a  third  party, 
claiming  to  have  contracted  with  him  upon  his  individual  responsi- 
bility, and  the  material  question  was.  Did  the  parties  so  contract  or 
was  the  contract  made  with  Hovey  as  the  agent  of  Meredith?  The 
instruction  concludes  with  a  distinct  and  independent  proposition : 
"And  unless  the  jury  believe  from  other  evidence  that  the  said  dec- 
larations of  Hovey  that  he  offered  the  reward  as  such  agent,  they 
must  find  for  plaintiff."  This  last  clause  was  certainly  calculated  to 
mislead.  Hovey's  declarations  to  Pitcher  or  Pitcher's  agent,  Heard, 
were  undoubtedly  evidence  of  the  understanding  between  them,  as 
well  as  what  was  said  by  Pitcher  or  Heard.  To  enable  the  jury  to 
ascertain  the  intent  of  both  parties,  it  was  proper  for  them  to  know 
all  that  passed  between  them  at  the  time  of  the  supposed  contract. 
Declarations  made  by  Hovey  at  other  times  and  to  other  persons  would 
of  course  be  inadmissible.  *  *  * 
Reversed  and  remanded. 


n.  Unauthorized  Contracts 
SMOUT  V.  ILBERY. 

(Court  of  Exchequer,  l.S4'J.     12  L.  J.  Exch.  357,  10  Mees.  &  W.  1.) 

Debt  for  goods  sold  and  delivered,  and  on  an  account  stated.  Ver- 
dict for  plaintiff,  and  defendant  obtained  a  rule  to  show  cause  why  a 
"irew  trial  should  not  be  had. 

Alderson,  B.''  This  case  was  argued  at  the  v'-^ittings  after  last 
Hilary  Term,  before  my  brothers  Gurney,  Rolfe,  and  myself.  The 
facts  were  shortly  these.  The  defendant  was  the  widow  of  a  Mr. 
Ilbery,  who  died  abroad;  and  the  plaintiff,  during  the  husband's  life- 
linic,  had  supjilied,  anfl  after  his  death  had  continued  to  sui)ply,  goods 
for  the  use  of  the  family  in  England.  The  husband  left  England  for 
China  in  March,  1R39,  and  died  on  the  14th  day  of  October,  in  that 
year:  The  news  of  his  death  first  arrived  in  England  on  the  K^tli 
Tlay'bf  March,  1R40;  and  the  only  question  now  remaining  for  the 
dedston  of  the  Court  is,  whether  the  defendant  was  liable  for  the 
goods  sui)pHed  after  her  husband's  death,  and  before  it  was  pos- 
sible that  the  knowledge  of  that  fact  nnild  be  connnunicatcd  to  her. 

<  I'iirt  of  (lie  opinion  l.s  oiiilttcd. 


(lot  KKFIOOTS   AND   CONSlXil'l'NCKS   OF   TlIK    RELATION  (Part   3 

'riicrc  was  no  tloubt  that  such  knowlodj^o  was  coiiiinunicatecl  to  her 
as  soon  as  it  was  possible;  antl  that  the  ilcfcndant  had  paid  into  Court 
suOicicnt  to  cover  all  the  goods  supplied  to  the  family  by  the  plaintiff 
.Mibseciuently  to  the  13th  March,  IMO. 

We  took  time  to  consider  this  question,  and  to  examine  the  authori- 
ties on  this  subject,  which  is  one  of  some  diflicully.  The  point,  how 
far  an  agent  is  personally  liable  who,  having  in  fact  no  authority,  pro- 
fesses to  bind  his  principal,  has  on  various  occasions  been  discussed. 
There  is  no  doubt  that  in  the  case  of  a  fraudulent  misrepresentation 
of  his  authority,  with  an  intention  to  deceive,  the  agent  would  be  per- 
sonally responsible.  But  independently  of  this,  which  is  perfectly  free 
from  doubt,  there  seem  to  be  still  two  other  classes  of  cases,  in  which 
an  agent  who  without  actual  authority  makes  a  contract  in  the  name 
of  his  principal,  is  personally  liable,  even  wdiere  no  proof  of  such 
fraudulent  intention  can  be  given.  First,  where  he  has  no  authority, 
and  knows  it,  but  nevertheless  makes  thcTontract  as  having  such  au- 
thority. In  that  case,  on  the  plainest  principles  of  justice,  he  is  liable. 
For  he  induces  the  other  party  to  enter  into  the  contract  on  what 
amounts  to  a  misrepresentation  of  a  fact  peculiarly  within  his  own 
knowledge;  and  it  is  but  just,  that  he  who  does  so  should  be  consid- 
ered as  holding  himself  out  as  one  having  competent  authority  to 
contract,  and  as  guarantying  the  consequences  arising  from  any  want 
of  such  authority.  But  there  is  a  third  class,  in  which  the  Courts 
have  held,  that  where  a  party  making  the  contract  as  agent  tona  fide 
believes  that  such  authority  is  vested  in  him,  but  has  in  fact  no  such 
authority,  he  is  still  personally  liable.  In  these  cases,  it  is  true,  the 
agent  is  not  actuated  by  any  fraudulent  motives ;  nor  has  he  made 
any  statement  which  he  knows  to  be  untrue.  But  still  his  liability 
depends  on  the  same  principles  as  before.  It  is  a  wrong,  differing 
only  in  degree,  but  not  in  its  essence,  from  the  former  case,  to  state 
as  true  what  the  individual  making  such  statement  does  not  know 
to  be  true,  even  though  he  does  not  know  it  to  be  false,  but  believes, 
without  sufficient  grounds,  that  the  statement  will  ultimately  turn  out 
to  be  correct.  And  if  that  wrong  produces  injury  to  a  third  person, 
who  is  wholly  ignorant  of  the  grounds  on  which  such  belief  of  the 
supposed  agent  is  founded,  and  who  has  relied  on  the  correctness  of 
his  assertion,  it  is  equally  just  that  he  who  makes  such  assertion  should 
be  personally  liable   for  its  consequences. 

On  examination  of  the  authorities,  we  are  satisfied  that  all  the  cases 
in  which  the  agent  has  been  held  personally  responsible,  will  be  found 
to  arrange  themselves  under  one  or  other  of  these  three  classes.  In  all 
of  them  it  will  be  found,  that  he  has  either  been  guilty  of  some  fraud, 
has  made  some  statement  which  he  knew  to  be  false,  or  has  stated  as 
true  what  he  did  not  know  to  be  true,  omitting  at  the  same  time  to  give 
such  information  to  the  other  contracting  party,  as  would  enable  him 
equally  with  himself  to  judge  as  to  the  authority  under  which  he  pro- 
posed to  act. 


f.<y(:T^ ' 


,.^ 


Ch.  3)  LIABILITY    OF    THE    AGEXT    TO    THE    THIRD    PERSON  G55 

Of  the  first,  it  is  not  necessary  to  cite  any  instance.  Polhill  v.  Wal- 
ter, 3  B.  &  Ad.  114,  is  an  instance  of  the  second;  and  the  cases  where 
the  agent  never  had  any  authority  to  contract  at  all,  but  believed  that 
he  had,  as  when  he  acted  on  a  forged  warrant  of  attorney,  which  he 
thought  to  be  genuine,  and  the  like,  are  instances  of  the  third  class. 
To  these  may  be  added  those  cited  by  ^Ir.  Justice  Story,  in  his  book 
on  Agency,  p.  226,  note  3.     *     *     * 

The  present  case  seems  to  us  to  be  distinguishable  from  all  these 
authorities.  Here  the  agent  had  in  fact  full  authority  originally  to 
contract  and  did  contract  in  the  name  of  the  principal.  There  is  no 
-gTotnrd'fOr  saying,  that  in  representing  her  authority  as  continuing, 
-shc-dtd'any  wrong  whatever.  There  was  no  mala  fides  on  her  part — 
^fRTlvanf  of  due  diligence  in  acquiring  knowledge  of  the  revocation — 
T^o-omission  to  state  any  fact  within  her  knowledge  relating  to  it,  and 
thc-m-ocatibn  itself  was  by  the  act  of  God.  The  continuance  of  the 
""IrffoFthe  principal  was,  under  these  circumstances,  a  fact  equally 
within  the  knowledge  of  both  contracting  parties.  If,  then,  the  true 
■pniTciple  derivable  from  the  cases  is,  that  there  must  be  some  wrong 
or  omission  of  right  on  the  part  of  the  agent,  in  order  to  make  him 
personally  liable  on  a  contract  made  in  the  name  of  his  principal,  it 
will  follow  that  the  agent  is  not  responsible  in  such  a  case  as  the 
'prebTnt."^And  to  this  conclusion  we  have  come.  We  were,  in  the 
'course  of  the  argument,  pressed  with  the  difficulty,  that  if  the  de- 
fendant be  not  personally  liable,  there  is  no  one  liable  on  this  contract 
at  all ;  for  Blades  v.  Free,  9  B.  &  Cr.  167,  4  Man.  &  Ry.  282,  has  de- 
cided, that  in  such  a  case  the  executors  of  the  husband  are  not  liable. 
This  may  be  so:  but  we  do  not  think  that  if  it  be  so,  it  aflfords  to  us 
a  sufficient  ground  for  holding  the  defendant  liable.  In  the  ordinary 
case  of  a  wife  who  makes  a  contract  in  her  husband's  lifetime,  for 
which  the  husband  is  not  liable,  the  same  conse(|uence  follows.  In 
that  case,  as  here,  no  one  is  liable  up«jn  the  contract  so  made. 

Rule  absolute  accordingly. 


DUSEXBL'KV  v.  ETJJS. 

(Supremo  Court  of  .Iinli'Mtiin-  of  New   V«>rk,   IHtl'.     ."5  .Tolins.  (^is.   70,  2  Am. 

IX'C.  HI.) 

In  error  on  certiorari  from  a  Justice's  Court.  Judgment  for  plain- 
tiff on  a  note  signed  by  Dusenbury  "for  Peter  Siiarpe." 

PivR  Curiam.  There  can  be  no  question  but  that  Dusenbury 
signed  the  note,  without  having  any  authority  for  that  purpose.  Tlie 
letter  of  attorney  could  not  bind  the  principal  beyond  the  plain  im- 
port of  it.  An  aulhority  to  collect  debts  cannot,  by  any  possible 
construction,  be  m  .mtliMiir,    i..  give  notes. 

Tlie  oiily  question,  iluii,  i>,  whether  Dusenbury  was  not  personal!}- 
responsible,  as  for  his  own  note.  On  this  point  we  are  of  oi)inion 
that  if  a  pers<;n,  under  pretence  of  authority  from  another,  executes 

> 


656        EFFKCTS  AND  CONSKQU KNCKS  OF  THE  KELATION    (Part  3 

a  note  in  his  name,  he  is  bound ;  and  the  name  of  the  person  for 
whom  he  assumed  to  act  will  be  rejected,  as  surplusage.  The  party 
who  accepts  of  a  note,  under  such  mistake  or  imposition,  ought  to 
have  the  same  remedy  against  the  attorney,  who  imposes  on  him, 
as  he  would  have  had  against  the  pretended  principal,  if  he  had  been 
really  bound. 

Judgment  of  aftirmance. 


HALL  et  al.  v.  CRANDALL  et  al. 

(Supreme  Coiut  of  California,  18G6.     29  Cal.  567,  89  Am.  Dec.  64.) 

Action  on  a  promissory  note  made  for  the  Auburn  Turnpike  Com- 
pany by  its  president,  the  defendant. 

Sanderson,  j.b  *  *  *  But  upon  this  head  it  is  sufficient  to 
say  that  the  present  action  is  founded  strictly  upon  the  note  itself, 
and  not  upon  the  wrong  done  to  the  plaintififs  by  the  defendants  in 
executing  it  without  authority;  and  we  are  of  the  opinion  that  if 
the  defendants  have,  by  their  action  in  the  premises,  incurred  a  per- 
sonal liability  at  common  law,  such  liability  does  not  arise  from  any 
obHgation  created  by  the  note  itself,  but  from  the  wrong  done.  In 
all  such  cases,  the  remedy  against  the  agent  is  an  action  to  recover 
the  money,  if  any  has  been  paid  him,  or  the  value  of  the  work  dr 
labor,  if  any  has  been  performed  for  him,  under  the  supposed  con- 
tract, or  special  damages  resulting  to  the  plaintiff  by  reason  of  the 
defendants'  wrong  in  undertaking  to  act  for  another  without  author- 
ity. If  an  agent  in  executing  a  contract,  employ  terms  which  in  legal 
effect,  charge  himself,  he  may  be  sued  upon  the  instrument  itself  as  a 
contracting  party.  This  is  so  because  by  the  use  of  such  terms,  he 
has  made  the  contract  his  own.  But  if  the  instrument  does  not  con- 
tain such  terms,  or  in  other  words  contains  language  which  in  legal 
effect  bind  the  principal  only,  the  agent  cannot  be  sued  on  the  instru- 
ment itself  for  the  obvious  reason  that  the  contract  is  not  his.  If 
then  the  contract  is  not  binding  upon  the  principal  because  the  agent 
had  no  authority  to  make  it,  and  is  not  binding  on  the  agent  because 
it  does  not  contain  apt  words  to  charge  him  personally,  it  is  wholly 
void. 

Upon  this  point  there  is  some  conflict  of  authority,  but  the  better 
reason,  in  our  judgment,  is  with  those  cases  which  hold  the  rule  to 
be  as  above  stated.  Story  on  Agency  (5th  Ed.)  §  264a,  and  marginal 
notes,  where  the  authorities  are  collected;  1  Parsons  on  Contracts, 
54  to  58 ;  Abbey  v.  Chase,  6  Cush.  54.  See,  also,  Sayre  v.  Nichols, 
7  Cal.  538,  68  Am.  Dec.  280;  Davidson  v.  Dallas,  8  Cal.  227;  Haskell 
v.  Cornish,  13  Cal.  47;  Shaver  v.  Ocean  Min.  Co.,  21  Cal.  45,  which 
will  be  found  to  bear  in  some  degree  upon  the  question.     Those 

6  Part  of  the  opinion  is  omitted. 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  G57 

cases,  which  hold  that  the  agent  may  be  sued  upon  the  contract  it- 
self, treat  all  matter  which  the  contract  contains  in  relation  to  the 
principal  as  surplusage,  which  is,  in  effect,  to  make  a  new  contract 
for  the  parties  concerned  instead  of  construing  the  one  which  thev 
themselves  have  made. 

The  contract  in  the  present  case  is  not  binding  upon  the  supposed 
principal  (the  company)  because  the  supposed  agents  (the  defend- 
ants) had  no  authority  to  make  it,  as  we  held  in  Hall  v.  Auburn 
Turnpike  Co.,  27  Cal.  255,  87  Am.  Dec.  75.  It  is  not  binding  upon 
the  defendants,  because  it  does  not  contain  apt  words  to  charge  them. 
From  the  terms  employed,  the  contract  is  manifestly  the  contract  of 
the  company  and  not  the  defendants.  It  is  clear  upon  inspection  of 
the  instrument  that  the  defendants  intended  to  bind  the  company 
and  not  themselves,  and  that  the  plaintiffs  so  understood  it.  This 
action  therefore  being  ex  directo  against  the  defendants  on  the  note 
itself,  cannot,  in  our  judgment,  be  sustained  at  common  law  for  rea- 
sons which  have  been  already  stated.*'  Upon  the  question  whether 
the  plaintiff  can  make  a  case  which  will  charge  the  defendants  at 
common  law,  we  intimate  no  opinion.     *     *     * 

Judgment  dismissing  the  case  affirmed. 


III.  On  What  Contract  Liable 

HAUPT  V.  VINT. 

(Supreme  Court  of  Appeals  of  West  Virginia,  1911.     68  W.  Va.  657,  70  S.  E. 
702,  34  L.  R.  A.  [N.  S.]  518.) 

Action  by  Haupt,  payee  of  a  note,  against  Vint,  maker  of  the  note, 
the  De  Ran  Lumber  Company,  indorser  on  the  note,  and  J.  J.  De 
^an,  by  whom  the  indorsement  was  made.  Judgment  for  plaintiff, 
arid  dcTenrlaril  Uumber  Company  brings  error. 

"  Porrrr^TJARGKR,  ].''  *  *  *  p.oth  the  declaration  and  the  proof 
show  that  the  De  Ran  Lumber  Company  is  a  corporation.  It  is  sued 
arrruch,  and  there  is  no  proof  of  authority  in  J.  J.  De  Ran,  its  man- 
Sger,  by  wTibm  the  indorsement  was  made,  or  any  other  person,  to 
bnid  it  by  an  accommodation  indorsement,  guaranty,  or  suretyship, 
nor  "evidence  sufficient  to  cstaljlish  an  original  promise  by  the  cor- 
poraHon.'  As  a  general  rule,  corporations  cannot  lend  their  credit 
in  the  form  of  accommodation  indorsements,  suretyships,  and  guar- 

«  Accord:  .Tofts  v.  York,  10  Cusli.  :;!IL'  (1S.->L>).  ficr  Shnw,  C.  J.  TIiouk'Ii  no 
onp  1h  lialilc  <m  the  cDiitnift,  the  a;,'fut  may  however  ho  liable  in  case  for 
inLsreprcsciitliit;  his  autliority.  .McCoriiiifU  v.  Scchcruer,  7.'{  III.  App.  87  (ISDS); 
r.artlelt  v.  TufUer,  KH  Mass.  '.VM',,  (\  Am.  Hep.  lilO  (IS7O);  niincnn  v.  Niles, 
32  111.  r>:>,'2,  Ki  Am.  Dec  '2'X',  (1S(J:!);    .'Simpson  v.  (Jarlaud,  70  Mo.  203  (1SS4). 

T  Part  of  the  opinion  is  omitted. 
Godd.Pk.&  a.— 42 


()5S        EFFECTS  AND  CONSEQUENCKS  OF  THE  KELATION    (Part  3 

antics.  To  fix  such  a  liahility  upon  a  corin^ratii^n,  it  is  necessary  to 
establish,  not  only  authority  in  the  officer  or  agent  to  execute  the 
paper,  but  also  power  in  the  corporation  to  bind  itself  in  thaTway. 
This  rule  is  universally  applied  to  banking;-,  insurance,  railroad,  plank 
roail,  and  other  transportation  companies,  manufacturing"  companies, 
and  building  and  loan  associations.  It  would  be  useless  to  consume 
space  here  in  citing  the  decisions  declaring  and  ap])lving  this  law. 
They  are  collated  in  10  Cvc.  1109;  7  A.  &  E.  Knc.  L.  7SS;  Mora- 
wetz,  Corp.  §§  389,  423 ;  Cook,  Corp.  §  761 ;  Clark,  Corp.  §  184,  p. 
486. 

As  J.  J.  De  Ran,  by  whom  the  indorsement  was  made,  has  been 
made  a  defendant,  it  becomes  necessary  to  determine,  for  the  ptu-- 
poses  of  a  new  trial,  whether  his  lack  of  authority  to  bind  his  princi- 
pal makes  him  personally  liable.  Though  it  has  been  held  that  a  per- 
son who  has  signed  the  name  of  another  to  a  note  or  other  contract 
without  authority  is  liable  thereon  as  promisor  or  covenantor  (Ed- 
ings  V.  Brown,  1  Rich.  255;  Dusenbury  v.  Ellis,  3  Johns.  Cas.  70, 
2  Am.  Dec.  144),  reason  and  the  weight  of  authority  are  to  the  con- 
trary, and  make  him  liable,  not  on  the  instrument,  as  a  party  to  it, 
but  only  as  a  warrantor  of  the  signature,  against  whom  assumpsit, 
sounding  in  damages,  lies,  or  as  a  wrongdoer,  making  him  liable  In 
trespass  on  the  case  for  fraud  and  deceit.  Ballou  v.  Talbot,  16  Mass'. 
461,  8  Am.  Dec.  146;  White  v.  Madison,  26  N.  Y.  117;  Dung  v. 
Parker,  52  N.  Y.  499 ;  Clark  &  Skyles,  Agency,  §  575 ;  1  A.  &  E. 
Enc.  L.  1128;  31  Cyc.  1614,  1615,  saying:  "As  to  the  ground  upon 
which  the  liability  of  an  agent  contracting  for  another  without  au- 
thority rests,  the  authorities  in  the  several  states  differ  widely,  nor  is 
it  easy  to  reconcile  the  various  decisions  in  the  same  state.  In  some 
jurisdictions,  particularly  in  the  earlier  cases,  it  is  held  that  an  action 
may  be  maintained  against  the  agent  as  principal  upon  the  contract 
itself,  although  it  contains  no  apt  words  to  bind  him  personally,  but 
only  to  bind  the  principal,  upon  the  theory  that  the  contract  must 
have  been  intended  to  bind  some  one ;  if  not  the  principal,  then  the 
agent.  By  the  great  weight  of  recent  authority,  however,  this  theory 
has  been  emphatically  repudiated,  and  it  is  now  generally  held,  more 
logically,  that  the  agent  cannot  be  held  upon  the  contract  unless  it 
contains  apt  words  to  bind  him  personally,  in  the  absence  of  which 
the  only  remedy  is  by  an  action  for  the  breach  of  his  implied  war- 
ranty or  an  action  for  deceit  if  the  circumstances  warrant  the  latter 
remedy."     *     *     *     Reversed   and  remanded. 


/ 


Ch.  3)  LIABILITY    OF    THE    AGEXT    TO    THE    THIRD    PERSON  659 

HANCOCK  V.  YUNKER. 

(Supreme  Court  of  Illinois,  1876.     S3  111.  20S.) 

ScHOLFiELD,  J.  Two  questions  are  presented  by  this  record  for 
our  determination : 

First — Does  the  covenant  in  the  lease  to  pay  rent  purport  to  be  the 
covenant  of  the  defendants,  individually? 

Second — If  the  defendants  did  not,  in  fact,  bind  a  legally  organized 
corporation  by  the  terms  of  the  lease,  are  they,  themselves,  liable  to  an 
action  of  covenant  upon  it? 

As  to  the  first  point.^we  thjnk  it  clear  the  covenants  in  the  lease,  on 
be_hajf,iif__the.  lessee,  do  not  purport  to.be  the  covenants  of- the  de- 
fendants, individually._N.  W.  Distilling  Co.  v.  Brant,  69  111.  658,  18 
Am.  Rep.  631.  The  case  is  not  analogous  to  Powers  v.  Briggs  et  al., 
79  111.  493,  22  Am.  Rep.  175,  and  other  cases  of  like  tenor  cited  by 
the  counsel  for  the  plaintiff. 

The  evidence  shows  that  "The  Chicago  Literary  Association"  was 
organized  as  a  corporation,  de  facto,  at  least.  It  was  the  lessee,  and 
by  it,  its  associates,  successors  and  assigns,  are  all  the  covenants  that 
relate  to  the  payment  of  rent,  taxes,  rates,  care  and  repair  of  the  prem- 
ises, and  surrender  of  possession,  etc.,  to  be  performed.  And,  at  the 
conclusion  of  the  lease,  it  is  recited,  the  party  of  the  first  part,  the 
plaintiff,  signs  in  his  own  proper  person,  and  the  party  of  the  second 
part,  which  is  "The  Chicago  Literary  Association,"  signs  "through  its 
trustees."  It  is  thus  seen,  the  entire  phraseology  of  the  instrument  ex- 
pressly excludes  the  idea  of  an  intentional  personal  liabiHty,  and  is 
such  as  is  appropriate  and  ordinarily  used  to  express  corporate  lia- 
bility. 

Upon  the  second  po-int  _thcre  is  no  doubt  that  "the  signature  of  an 
agenFaniounls-.to  an  affirmation  that  he  has  authority  to  do  the  par- 
ticular act,  or,  at  all  events,  that  he,  bona  fide,  believes  himself  to  have 
lhat_aiUbi)ritj:il  Story  on  Agency,  §  264.  But  the  question  here  is 
not  whether  these  defendants  may  be  held  liable  to  the  plaintiff  in  a 
proper  form  of  action,  but  whether  they  are  liable  in  this  form  of  ac- 
tion— i.  e.,  covenant  upon  the  lease. 

Story,  in  the  work  just  quoted  from,  §  264a,  says:  "It  seems  clear 
tjiatjn  no  case  caii  an  agent  be  sued  on  the  very  instrument  itself,  as 
a^contracting  party^  unless  there  are  apt  words  therein  so  to  charge 
Ji]^  Thus,  if  a  person  acting  as  agent  for  another  should,  without 
authority  or  exceeding  his  authority,  make  and  execute  a  deed  in  the 
name  of  his  principal,  and  not  in  his  own  name,  the  agent  would  not 
be  liable  thereon,  although  it  would  not  bind  the  i)rincipal."  lint  he 
further  says,  where  there  are  aj)t  words  which  may  charge  him  per- 
sonally, and  yet  he  signs  the  same,  in  his  own  name,  as  agent  of  an- 
other, the  (|uestion  may  be  presented  under  a  dilTcrent  asiiect,  and  he 
gives  this  example:   "If  an  agent  should,  without  due  authority,  m;il<e 


CA\0 


ErrnCTS   AND    CONSKQfENCES   OF  THE    KBLATION  (Part   3 


a  promissory  note,  saying  in  it,  'I  promise  to  pay,'  etc.,  and  sign  it 
C.  D.,  by  A,  B.,  his  agent,  or  'A.  P).,  agent  of  C.  D.,'  in  such  a  case 
may  the  words  as  to  the  agency  he  rejected,  and  the  agent  be  held  per- 
sonally answerable  as  the  promisor  of  the  note?"  "Upon  this  point," 
he  says,  "the  authorities  do  not  seem  to  be  entirely  agreed."  The 
same,  in  substance,  will  be  found  in  Chitty  on  Contracts  (11th  Am.  Ed.) 
314.  See,  also.  Stetson  v.  Patten,  2  Greenl.  358,  11  Am.  Dec.  Ill; 
Ballou  V.  Talbott,  16  ]\Iass.  461,  8  Am.  Dec.  146;  Delius  v.  Cawthorn, 
13  N.  C.  QO:  Abbey  v.  Chase,  6  Cush.  56,  57;  Moor  v.  Wilson,  26 
N.  H.  332;  American  Leading  Cases  (5lh  Ed.)  Notes  to  Rathbon  v. 
Budlong,  767,  side  p.  636. 

The  question  under  consideration  was  not  before  the  court  in  Wheel- 
er V.  Reed,  36  111.  81,  nor  in  Mann  et  al.  v.  Richardson,  66  111.  481,  and 
what  was  there  said  affecting  it  was  by  way  of  argument  merely,  and, 
so  far  as  intended  to  announce  a  principle,  must  be  understood  as 
restricted  to  cases  where  there  are  apt  words  in  the  instrument  to 
charge  the  agent  personally,  by  rejecting  the  words  descriptive  of  his 
agency  as  surplusage. 

In  Duncan  v.  Niles,  32  111.  532,  83  Am.  Dec.  293,  the  court  quoted 
with  approval,  however,  this  language  from  the  opinion  of  the  court 
in  Abbey  v.  Chase,  supra,  and  predicated  the  decision  upon  it,  and 
upon  other  cases  of  like  tenor:  "When  one  who  has jio  authority  to 
act  as  another's  agent  assumes  so  to  act,  and  makes  either  a  deed  or  a 
simple  contract  in  the  name  of  the  other,  he  is  not  personally  liable  on 
the  covenants  in  the  deed,  or  on  the  promise  in  the  simple  contract, 
unless  it  contain  apt  words  to  bind  him  personally.  The  only  remedy 
against  him  in  this  commonwealth,  is  an  action  on  the  case  for  falsely 
assuming  authority  to  act  as  agent." 

It  is  true,  in  that  case  the  agent  sought  to  be  held  personally  re- 
sponsible assumed  to  act  as  the  agent  of  a  public  corporation,  and 
there  is  a  distinction  between  the  measure  of  liability  imposed  upon 
public  and  private  agents ;  but  the  authorities  referred  to  and  relied 
upon  apply,  so  far  as  the  form  of  the  remedy  is  concerned,  as  well  to 
private  as  to  public  agents. 

We  regard  what  is  quoted  from  Story,  supra,  as  a  correct  statement 
of  the  result  of  the  authorities,  and  think  it  is  not  inconsistent  with 
anything  that  has  been  heretofore  decided  by  this  court. 

Inasmuch,  therefore,  as  the  undertaking  to  perform  the  covenants  in 
the  lease  of  the  party  of  the  second  part  assumes  to  be  that  of  "The 
Chicago  Literary  Association"  alone,  and  there  are  no  apt  words  from 
which  an  individual  undertaking  can  be  implied,^  if  we  shall  reject  the 

8  Accord,  see  the  late  case  of  Roberts  v.  Tuttle,  36  Utah,  614,  105  Pae.  916 
(1909). 

In  some  cases,  particularly  early  American  cases,  the  agent  is  held  on  the 
contract  with  the  third  person  as  though  it  were  his  personal  contract.  Gil- 
laspie  V.  Wesson,  7  Port.  454,  31  Am.  Dec.  715  (1838) ;  Byars  v.  Doores'  Adm"'r, 
20  Mo.  284  (1855);  Meech  v.  Smith,  7  Wend.  315  (1831).  This  is  sometimes 
justihed  on  the  ground  that  by  striking  out  of  the  contract  the  parts  whicli 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  6G1 

name  "The  Chicago  Literary  Association"  wherever  it  occurs,  we  must 
hold  that  the  defendants  cannot  be  held  individually  responsible  in 
the  present  action  on  the  lease,  and  affirm  the  judgment. 
Judgment  affirmed. 


THILMANY  v.  IOWA  PAPER  BAG  CO.  et  al. 

(Supreme  Court  of  Iowa,  1899.    108  Iowa,  357,  79  N.  W.  261,  75  Am.  St.  Rep. 

259.) 

Action  to  recover  the  price  of  a  car  load  of  paper  shipped  by  plain- 
tiff to  the  Bag  Company.  Daggett  as  vice  president  of  a  bank  had 
written  plaintiff  a  letter  of  guaranty  on  the  strength  of  which  the 
paper  had  been  shipped.  The  Bag  Company  was  insolvent,  and  it  had 
been  decided  in  a  previous  action  that  a  national  bank  could  not  make 
such  a  guaranty,  and  therefore  was  not  liable.  Plaintiff  now  seeks  to 
make  Daggett  personally  liable. 

Deemer,  J.®  *  *  *  We  now  turn  to  the  main  point  in  the 
case,  and  first  to  the  proposition  that  defendant  Daggett  is  liable  be- 
cause of  the  form  of  the  guaranty.  It  is  signed,  "Iowa  National  Bank, 
by  William  Daggett,  V.  P."  Clearly,  this  is  an  obligation  of  the  com- 
pany ;  and  the  form  of  the  signature  just  as  clearly  indicates  that  Dag- 
gett signed  it  in  a  representative  capacity,  and  not  as  an  individual.  To 
hold  that  the  contract  binds  Daggett  personally,  we  must  eliminate  the 
preposition  "by,"  and  hold  that  the  initials  "V.  P."  are  "descriptio 
personae."  This  we  cannot  do,  as  it  is  not  our  province  to  make  con- 
tracts for  parties.  The  use  of  the  pronouns  "we"  and  "our"  in  the 
letter  of  guaranty  is  of  no  significance.  They  are  often  used  in  re- 
ferring to  a  corporation  as  a  collection  of  individuals.  There.j[s_ilO.- 
jjixesljon  in  our  rnindj  but  tliat  all  the  parties  to  this  contract  regarded 
it  as  the  obligation  of  the  bank,  and  not  of  the  defendant  Daggett  in 

the  agent  had  no  authority  to  put  there  the  remainder  clearly  binds  the  aRcnt. 
Weare  v.  Gove,  44  N.  II.  19f!  (18021.  An  Intcrestin;,'  discussion  of  this  Ihoory 
Is  found  In  Slinnionds  v.  I>ong,  80  Kan.  1:".''..  101  Tac.  1070,  2.3  U  R.  A.  (N.  S.) 
.">.>3  (1900).  -Many  cases  make  no  distinction  between  an  artion  af^alnst  the 
agent  on  the  unauthorized  contract  made  for  tlie  principal  and  an  action  bas- 
ed on  the  implied  warranty  of  authority.  Krocgcr  v.  I'itcairn,  101  Pa.  .311, 
47  Am.  Hop.  718  (1SS2).  In  others  ]ial)ility  of  the  agent  when  apt  words  to 
bind  him  are  not  used  must  be  in  case,  for  his  fraud  or  misrepresentation. 
In  such  a  case.  In  the;  absenc*e  of  misrepresentation,  there  is  no  liability.  Og- 
den  V.  Uiiynioiid,  22  Conn.  .379,  58  .\ni.  Dec.  120  (1S."..3).  And  others,  though 
reeoniiizlng  that  the  liability  really  rests  upon  the  latter,  still  refuse  to  set 
aside  a  Judgment  against  the  ag»Mit  ln'cause  It  was  based  upon  a  breach  of 
the  wrong  c-ontract.  Such  an  error  is  not  iirejudblal  to  the  agent's  rights, 
and  Is  Immaterial.     Oliver  v.  .Morawetz,  97  Wis.  .3.32.  72  N.  W.  877  (lMi7i. 

Still  olliers,  iiarlicularly  the  Knglish  courts,  are  Inclined  to  deny  relief 
against  the  agent  if  the  action  Is  brouglit  on  the  cdiitract  itself,  when  It  con- 
tains no  apt  words  to  bind  liim.  .TenUins  v.  Ilutcliinson,  13  Q.  1?.  744,  13 
.lur.  7f;3.  IS  L.  ,1.  (i  H.  274.  (>(>  E.  C.  L.  744  (IM!)).  Tiie  agent  may  be  llal)le 
in  another  form  of  action,  but  not  upon  the  contract  Itself.  Simpson  v.  Gar- 
laixl.   7<;  .Me.   203   (1SS4). 

»  i'art  of  the  opinion  Is  omitted. 


Ci\2 


KFFKCTS  AND  CONSKQUENCKS  OK  Till';  UKLATION    (Part  3 


'        h 


his  imlividual  capacity;  and.  as  this  is  the  proper  k\c^al  construction  of 
the  instrument,  nolliing  further  need  be  said  on  the  lu\st  proposition 
urged  by  appellant's  counsel. 

2.  As  to  the  second  proposition,  the  rule  has  been  broadly  stated 
over  and  over  again  tliat  when  an  agent  contracts  in  excess  of  liis-iiu- 
thority,  or  acts  without  authority,  or  assumes  to  have  authority  when 
he  hasnone,  or  for  any  reason  fails  to  bind  his  principal,  he  Js 
himself  bound.  Winter  v.  Hite,  3  Iowa,  142;  Allen  v.  Pegram,  16 
Iowa,  163;  Andrews  v.  Tedford,  37  Iowa,  314;  Lewis  v.  Tilton,  64 
Iowa,  220,  19  N.  W.  911,  52  Am.  Rep.  436.  That  this  is  the  general 
rule  must  be  conceded,  and,  as  applied  to  the  facts  of  the  cited  cases, 
it  is  correct.  But,  like  nearly  every  other  general  rule,  it  is  subject  to 
exceptions,  some  of  which  we  will  notice. 

The  reasons  generally  given  for  the  rule  are:  First,  That,  as  an 
agent  assumes  to  represent  a  principal,  he  cannot  be  heard  to  say  that 
he  had  no  authority,  or  that  there  was  in  fact  no  principal  to  be  bound ; 
for,  if  he  assumes  to  represent  another,  he  impliedly  warrants  that 
there  is  such  another,  and  that  he  has  authority  to  represent  him.  If, 
then,  there  is  no  principal,  or  the  agent  has  no  authority  to  act  for  him, 
an  action  will  lie  for  deceit  or  misrepresentation.  Second.  The  law 
assumes  that  the  contract  was  intended  to  bind  some  one,  and,  if  the 
principal  is  not  bound,  the  contract  must  be  that  of  the  agent.  This 
last  rule  is  generally  applied  to  executed  contracts,  and  an  action  will 
lie  for  benefits  received  by  the  agent.  Some  cases  go  to  the  extent  of 
rejecting  all  parts  of  the  contract  relating  to  the  obligation  of  the  prin- 
cipal, and  then  treat  it  as  the  personal  contract  of  the  agent.  As 
illustrating  this  rule,  see  Byars  v.  Doores,  20  Mo.  284;  Woodes  v.  Den- 
nett, 9  N.  H.  55 ;  Terwilliger  v.  Murphy,  104  Ind.  32,  3  N.  E.  404.  A 
third  reason  for  the  rule  is  that  the  agent  impliedly  warrants  his  au- 
thority to  act  for  his  principal,  and,  if  he  has  no  such  power,  an  action 
lies  for  breach  of  warranty. 

Now,  it  is^  apparent  that  if  the  party  with  whom  the_  agent  contracts 
has  notice  of  the  facts  relating  to  the  authority  of  the  agent,  and  is  as 
Tiilly  advised  as  to  his  authority  as  the  agent  himself,  tliere  can  bejio 
action  for  deceit.  And  so  the  text  writers  have  generally  stated  this  as 
an  exception  to  the  general  rule.  Mechcm  on  Agency,  at  sections  545 
and  546,  thus  states  the  law : 

"Sec.  545.  *  *  *  Of  course,  if  the  other  party  knew,  or  by  the 
exercise  of  reasonable  care  might  have  discovered,  the  want  of  au- 
thority, he  cannot  recover.  This  implied  warranty  by  the  agent  of  his 
authority  must  ordinarily  be  limited  to  its  existence  as  a  matter  of 
fact,  and  not  be  held  to  include  a  warranty  of  its  adequacy  or  suffi- 
ciency in  point  of  law. 

"Sec.  546.  Where  Agent  Discloses  All  the  Facts  Relating  to  His 
•Authority.  W'here,  however,  the  agent,  acting  in  good  faith,  fully. 
discloses  to  the  other  party  at  the  time  all  the  facts  and  circumstances 
touching  the  authority  under  which  he  assumes  to  act,  so  that  the  other 


y  /-€  .4-iA-^ 


»v^X^ 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  G03 

party,  from  such  information  or  otherwise,  is  fully  informed  as  to  the 
existence  and  extent  of  his  authority,  he  cannot  be  held  liable.  It  is 
material,  in  these  cases,  that  the  party  claiming  a  want  of  authority  in 
the  agent  should  be  ignorant  of  the  truth  touching  the  agency.  If  he 
has  full  knowledge  of  the  facts,  or  of  such  facts  as  are  sutftcient  to  put 
him  upon  inquiry,  and  he  fails  to  avail  himself  of  such  knowledge,  or 
of  the  means  of  knowledge  reasonably  accessible  to  him,  he  cannot  say 
that  he  was  misled,  simply  on  the  ground  that  the  other  assumed  to 
act  as  agent  without  authority.  Of  course,  if  the  agent  conceals  or 
misrepresents  material  facts^  to  the  detriment  of  the  other  party,  he 
cannot  claim  exemption." 

"Judge  Story,  in  his  valuable  work  on  Agency  (section  265),  says: 
"This  doctrine,  however,  as  to  the  liability  of  the  agent  where  he  con- 
tracts in  the  name  and  for  the  benefit  of  the  principal,  without  having 
due  authority,  is  founded  upon  the  supposition  that  the  want  of  author- 
ity is  unknown  to  the  other  party,  or,  if  known,  that  the  agent  under- 
takes to  guaranty  a  ratification  of  the  act  by  the  principal.  But  circum- 
stances may  arise  in  which  the  agent  would  not  or  might  not  be  held 
to  be  personally  liable,  if  he  acted  without  authority,  if  that  want  of 
authority  was  known  to  both  parties  or  unknown  to  both  parties." 

Abundant  authorities  are  cited  by  each  author  in  support  of  these 
propositions.  The  same  thought  is  equally  applicable  to  the  third  rea- 
son above  given  for  the  general  rule.  And  it  may  be  further  said  that 
the  implied  warranty  of  the  agent  does  not  relate  to  the  power  of  the 
principal  to  enter  into  the  particular  contract.  He  simply  covenants 
that  he  has  authority  to  act  for  his  principal,  not  that  the  act  of  the 
principal  is  legal  and  binding.  Hence  it  has  been  justly  said  that  the 
contract  must  be  one  which  the  law  would  enforce  against  the  prin- 
cipal, if  it  had  been  authorized  by  him,  else  the  anomaly  would  exist 
of  giving  a  right  of  action  against  an  assumed  agent  for  an  unauthor- 
ized representation  of  his  power  to  make  the  contract,  when  a  breach 
of  the  contract  itself,  if  it  had  been  authorized,  would  have  furnished 
no  ground  of  action  against  the  principal.  Abeles  v.  Cochran,  22  Kan. 
406,  31  Am.  Rep.  194;  Baltzen  v.  Nicolay,  53  N.  Y,  467;  j\Iechem,  Ag. 
§  548;  Snow  v.  Ilix,  54  Vt.  478. 

In  the  case  now  under  consideration  the  defendant  l)agi;ctt  made  no 
representations  as  to  his  authority,  save  that  contained  in  the  letter  it- 
self. He  is  guilty  of  no  actionable  deceit,  unless  it  be  found  in  the  fact 
that  he  signed  the  letter  of  guaranty  as  vice  president,  and  thus  rep- 
resented that  he  had  authority  to  represent  his  bank.  He  had  this  au- 
thority, if  any  officer  of  a  national  bank  has  it,  for  no  question  is  made 
as  to  his  authority  to  represent  the  bank  in  the  making  of  any  contract 
it  is  authorized  to  execute.  The  action  is  not,  then,  based  upon  any 
misrepresentation  as  to  his  authority,  but  upon  the  invalidity  of  the 
contract  itself  as  between  plaititilT  and  the  bank.  There  was  no  action- 
able deceit,  for  the  i)laintilY  is  presumed  to  know  as  much  abcjut  the 
powers  of  national  banks  as  the  defendant.    There  is,  as  we  have  said. 


G64        EFFECTS  AND  CONSEQUENCES  OF  THE  RELATION    (Part  3 

no  inipHcil  warranty  by  an  agent  that  his  princijial  has  authority  to 
make  the  contract.  As  a  rule,  that  is  a  question  of  hiw,  of  which  each 
party  has  equal  knowledge.  In  the  case  against  the  bank  we  held 
that  the  national  hanks  have  no  authority  to  enter  into  such  contracts, 
and  as  the  plaintilT  has  no  right  of  action  against  the  bank  upon  a  con- 
tract of  guaranty,  such  as  the  one  in  suit,  no  recovery  should  be  per- 
mitted against  the  agent ;  for  this  would  hold  every  agent  to  a  warran- 
ty of  the  legality  of  his  principal's  contracts.  As  we  have  seen,  this  is 
not  the  obligation  of  the  agent.  The  second  reason  sometimes  given 
for  the  general  rule  of  liability  of  the  agent  does  not  appear  to  us  to 
be  sound.  By  the  application  of  this  principle  a  new  contract  is  made 
for  the  parties.  An  engagement  is  created  which  the  parties  did  not 
intend  to  assume,  and  the  decided  weight  of  authority  is  against  such 
rule.  See  Hall  v.  Crandall,  29  Cal.  567,  89  Am.  Dec.  64;  Ogdcn  v. 
Raymond,  22  Conn.  379,  58  Am.  Dec.  429;  Duncan  v.  Niles,  32  111. 
532,  83  Am.  Dec.  293;  Stetson  v.  Patten,  2  Greenl.  358,  11  Am.  Dec. 
Ill ;  Abbey  v.  Chase,  6  Cush.  56;  White  v.  Madison,  26  N.  Y.  117; 
IMcCurdy  v.  Rogers,  21  Wis.  199,  91  Am.  Dec.  468. 

We  should  be  slow  to  adopt  any  rule  which  would  bind  a  party  who 
did  not  by  the  terms  of  his  contract  agree  to  become  responsible.  In- 
deed, the  question  seems  to  be  put  at  rest,  so  far  as  this  court  is  con- 
cerned, in  Willett  v.  Young,  82  Iowa,  292,  47  N.  W.  990,  11  L.  R.  A. 
115.  The  rules  herein  announced  are  not  in  conflict  with  any  of  the 
previous  decisions  of  this  court.  The  case  of  Winter  v.  Hite,  supra, 
related  to  the  contract  of  an  executrix,  and  it  is  there  said  that  such 
cases  should  not  be  confounded  with  those  of  agency.  In  the  case  of 
Andrews  v.  Tedford,  supra,  the  question  was  left  undecided.  Allen  v. 
Pegram  was  an  action  against  an  agent  who  assumed  to  act  for  a  prin- 
cipal that  had  no  existence ;  and  so  was  Lewis  v.  Tilton,  64  Iowa,  220, 
19  N.  W.  911,  52  Am.  Rep.  436.  These  cases  come  clearly  within  the 
general  rule  first  announced.  In  other  cases  cited  by  appellant's  coun- 
sel the  agent  was  held  liable  because  of  the  form  of  his  signature. 
They  have  no  application  to  the  question  before  us.^° 

We  do  not  think  that  Daggett,  the  agent,  is  personally  liable,  under 
the  facts  disclosed  in  this  case,  and  the  judgment  is  affirmed. 

10  See  especially  Baltzen  v,  Nicolay,  53  N.  T.  407  (1873),  in  which  the  con- 
tract was  unenforceable  as  coming  under  the  statute  of  frauds;  Bloodgood 
V.  Short,  50  Misc.  Hep.  2SG,  98  N.  Y.  Supp.  775  (iDOG),  in  which  the  agent  lack- 
ed the  necessary  written  power  of  attorney  to  sell  land ;  and  Beattie  v.  L,d. 
Ebury,  L.  R.  7  Ch.  Cas.  777,  41  L.  J.  Ch.  804,  27  L.  T.  Rep.  N.  S.  .398.  20  Wldy, 
Rep.  94  (1872),  affirmed  in  L.  R.  7  H.  L.  102,  44  L.  J.  Ch.  20,  30  L.  T.  Rep. 
581,  22  Wkly.  Rep.  897  (1874),  distinguishing  the  leading  case  of  Collen  v. 
^^•lright,  8  Eq.  &  B.  G47,  4  Jur.  N.  S.  357,  27  L.  J.  Q.  B.  215,  6  Wkly.  Rep.  123, 
92  E.  C.  L.  047  (1857).  In  the  latter  case  Cockljurn,  ('.  J.,  dissenting,  vig- 
orously criticises  the  invention  of  a  contract  of  implied  warranty  of  au- 
thority. The  doctrine  is  upheld  in  Anderson  v.  Adams,  43  Or.  G21,  74  Pac. 
215  n003),  and  especially  in  the  leading  case  of  Farmers'  Co-op.  Trust  Co. 
V.  Floyd,  47  Ohio  St  525,  26  N.  E.  110,  12  L.  R.  A.  340,  21  Am.  St.  Rep.  840 
(1890). 


Ch.  3)  LIABILITY   OF   THE   AGENT   TO   THE    THIRD    PERSON  6G5 

IV.  NoN-ExisTENT  Principai,  V 

EICHBAUM  V.  IRONS. 
(Supreme  Court  of  Pennsylvania,  1843.     6  Watts  &  S.  67,  40  Am.  (Dec.  540.) 

Assumpsit  for  a  dinner  furnished  on  the  order  of  the  defendants  to 
celebrate  the  Whig  victory  at  the  election  of  1840.  Defendants  Davis 
and  Eichbaum  opposed  the  proposal  in  the  meeting,  but  a  majority 
voted  for  it.    Verdict  directed  for  plaintiff. 

Gibson,  C.  J.  This  case  is  unique,  but  really  resolvable  on  prin- 
ciple. It  seemed,  at  first,  to  resemble  the  case  of  a  committee  sued 
for  the  price  of  meats  and  wines  furnished  on  its  order  to  a  club: 
but  though  the  defendants  acted  in  obedience  to  a  constituency,  it  was, 
unlike  a  club,  which  is  a  permanent  body,  an  intactible  and  irresponsi- 
ble one.  The  plaintiff,  being  examined  without  objection,  testified 
that  he  furnished  the  dinner  on  the  order  of  the  Whig  party,  but  that 
it  was  to  the  committee  he  looked  for  payment.  It  is  probable  that 
neither  he  nor  they  spent  a  thought  on  the  subject;  but  it  is  not, 
therefore,  to  be  concluded  that  he  agreed  to  give  the  dinner  >  for 
nothing;  and  the  responsibilities  of  the  parties  concerned  are /o  be 
determined  on  the  ordinary  principles  of  the  law  of  contracts./  The 
facts  are,  that  the  defendants  and  others,  being  a  committee  constituted 
by  a  popular  meeting  to  order  and  manage  a  dinner,  contracted  with 
the  plaintiff  to  furnish  it,  and  directed  the  secretary  of  the  meeting  to 
report  the  proceeding  to  the  Tippecanoe  Club,  an  affiliated  society, 
for  its  approbation. 

NowJt__\vill  not  be  pretended  that  nobody  was  responsible  to  the 
plaintiff  for  the  orc^r ;  and,  if  the  defendants  were  not,  who  else  was  ? 
"Wereth^yTo  be  viewed  as  the  agents  of  a  club,  we  would  have  some- 
thing palpable  to  deal  with.  The  question  would  be,  whether  they  had 
become  personally  liable  by  having  exceeded  their  authority,  or 
whether  they  had  not  contracted  on  the  credit  of  their  constituents. 
But  a  club  is  a  definite  association,  organized  for  indefinite  existence : 
not  an  ephemeral  meeting,  for  a  particular  occasion,  to  be  lost  in  the 
crowd  at  its  dissolution.  It  would  be  unreasonable  to  presume  that 
th?j2kimtiffa£M;ged  to  triiitloa  responsibility  so  desperate,  or  furnish 
11  dinner  on  the  credit  of  a  meeting  which  had  vanished  into  nothing. 
"TTwas  already  dcfiinct ;  and  we  arc  not  to  imagine  that  the  plaintiff 
consented  to  look  to  a  body  which  had  lost  its  individuality  by  the  dis- 
persion of  its  members  in  the  gciu-ral  mass.  But  the  question  would 
not  depend  on  the  law  of  partnership,  even  were  such  a  meeting  to  be 
treated  as  a  club ;  for  though  Lord  Eldon,  in  Beaumont  v.  Meredith, 
3  Vez.  &  Beat.  180,  and  Lord  Abingcr,  in  Flcinyng  v.  Hector,  2 
Mecson  &  Welsh.  179,  seemed  to  have  tliought  that  a  member  of  a 
club  is  a  partner,  the  notion  was  exploded  by  Chief  Justice  Tyndal,  in 


n 


lidG  EKFICCTS   AND   CONSi:i>r  KN^HS   OF  TllH    KKLATION  (Tait   3 

the  last  trial  of  Todd  v.  F.inly,  citcil  in  W'onlsworlh  on  Joint  Stock 
Companies.  183. 

_Ncjther Js_ it  dctorniinahlc  on  the  law  of  principal  and  a<;ent ;  fi>r 
there  was  no  principal.  At  first,  1  thouj^ht  the  credit  might  have  been 
given  to  the  primary  meetings  on  the  authority  of  those  cases  in  which 
officers  have  been  held  liable  to  have  contracted  on  the  credit  of  the 
government;  but  the  certainty  of  payment,  in  those  instances,  was 
so  great  as  to  make  the  moral  responsibility  of  the  government  the 
preferable  security.  Not  so  the  moral  responsibility  of  a  populace, 
which  is  infinitely  weakened  by  being  infinitely  divided.  In  a  case  like 
this,  the  usual  jiresumption  of  credit  is  inverted;  and,  in  the  absence 
of  evidence  to  the  contrary,  the  vendor  is  supposed  to  have  relied  on 
the  responsibility  of  the  persons  who  gave  the  order.  What  we  have 
to  do.  then,  is  to  determine  how  far  each  of  the  defendants  was  a 
party  to  it. 

"When  several  dine  together  at  a  tavern,  each  is  liable  for  the  reck- 
oning. Collyer  on  Partn.  25,  note  w.  But,  I  take  it,  they  are  liabje 
jointly  and  not  severally;  for  though  only  one  shgii]iLjQIxLer^llias£_ 
'who  approve  of  it  become  parties,  except  where  credit  is  given  .tCL_ 
one,  in  exclusion  to  those  who  happen  to  be  his  guests^  This  principle 
"is  deducible  from  Delauney  v.  Strickland,  4  Stark.  R.  366.  Did  the 
defendants,  then,  all  concur  in  the  order  given  for  the  dinner  in  ques- 
tion?   If  they  did  not,  the  plaintiff  cannot  recover. 

It  is  not  disputed  that  they  were  present  when  the  measure  was 
definitely  adopted ;  but  it  is  proved  that  Davis  and  Eichbaum  opposed 
it  while  it  was  under  consideration.  What  then?  They  at  last  submit- 
ted to  the  majority,  and  made  the  resolution  their  own.  In  Braith- 
waite  V.  Skofield,  9  B.  &  C.  401,  a  member  of  a  committee  who  was 
present  at  the  adoption  of  a  resolution  to  have  certain  work  done,  was 
held  liable  to  the  tradesmen.  Every  member  present  assents  before 
hand  to  whatever  the  majority  may  do,  and  becomes  a  party  to  acts 
done,  it  may  be,  directly  against  his  will.^^  If  he  would  escape  re- 
sponsibility for  them,  he  ought  to  protest,  and  throw  up  his  member- 
ship on  the  spot ;  and  there  was  no  evidence  that  any  of  the  defendants 
did  so.  On  the  contrary,  they  all  remained  till  the  meeting  was  dis- 
solved, and  the  order  given.  It  is  true,  that  Mr.  Davis  afterwards  de- 
sired the  plaintiff  to  give  the  matter  u]) ;  but  the  dinner  was  in  prepa- 
ration, and  it  was  too  late  to  retract.    Of  what  importance,  then  is  the 

11  Accord:  Frendeiulall  v.  Taylor,  23  Wis.  o.'JS,  99  Am.  Dec.  203  (1S08), 
In  which  a  coiimiittee  of  the  State  Fireman's  Association  contracted  for  a 
well,  or  tank,  for  a  state  tournament;  Ash  v.  Guie,  97  I'a.  493,  39  Am.  liep. 
S18  (1855),  in  which  members  of  a  masonic  lodge  were  sued  on  a  contract 
for  a  ma.sonic  temple;  Lewis  v.  Tiltou,  64  Iowa,  220,  19  N.  W.  911,  52  Am. 
Kep.  436  (1881),  in  which  a  committee  of  a  Good  'J>mi)lars  Lodge  signed,  a 
lease  for  lodge  rooms;  Winona  Lumber  Co.  v.  Church,  (J  S.  D.  49.S,  (J2  X.  W. 
107  ris95t ;  Kelner  v.  I^axter,  L.  K.  2  C.  P.  174,  12  Jur.  N.  S.  1016,  36  L.  J. 
C.  P.  94,  12  L.  T.  Kep.  N.  S.  313,  15  W.  R.  278  (1866).  Cf.  Hollman  v.  PuUin, 
1  Cab.  &  El.  254  (1884J. 


Ch.  3)  LIABILITY    OF    THE    AGEXT    TO    THE    THIRD    PERSON  667 

disputed  fact  of  his  having  partook  of  the  repast  with  the  rest  ?  Had 
he  done  so,  his  final  accession  would,  according  to  Delauney  v.  Strick- 
land, have  made  him  liable  despite  of  other  considerations ;  but  he 
had  become  irrecoverably  liable  by  the  order  of  the  committee,  given 
in  his  presence,  and  apparently  with  his  approbation. 

The  defendants  have  not  pleaded  the  non-joinder  of  the  other  mem- 
bers in  abatement ;  and  the  evidence  showed  such  a  joint  liability  of 
those  who  have  been  sued,  as  warranted  the  direction.  Judgment  af- 
firmed. 


CODDING  V.  MUNSON. 

(Supreme  Court  of  Nebraska,  1897.     52  Neb.  580,  72  N.  W.  S4G,  GG  Am.  St. 

Rep.  524.) 

Irvine,  C.^^  Munson  sued  Codding,  alleging  that  he  had  sold  and 
conveyed  to  him  certain  land  for  the  price  of  $10,000,  that  $9,750 
thereof  had  been  paid,  and  praying  judgment  for  the  remaining  $250. 
The  answer  was  a  general  denial.  The  plaintiff  recovered,  and  the  de- 
fendant brings  the  case  here  by  petition  in  error. 

The  evidence  discloses  that  there  were  held  several  open  meetings 
of  citizens  of  York  for  the  purpose  of  securing  the  location  there  of 
an  institution  for  the  care  of  orphans,  under  the  patronage  of  the  Wo- 
man's Home  Missionary  Societ>'  of  the  Methodist  Episcopal  Church. 
It  was  understood  that  a  gift  of  about  $10,000  would  be  necessary 
to  accomplish  the  purpose.  Both  plaintiff  and  defendant  attended  the 
meetings,  and  contributed  to  the  undertaking.  It  was  determined  that 
the  donations  should  be  in  the  form  of  negotiable  promissory  notes, 
made  to  the  order  of  a  trustee  to  be  designated  for  that  purpose. 
A  committee  appointed  at  one  of  the  meetings,  under  power  possessed 
or  assumed  by  it,  designated  the  defendant.  Codding,  as  trustee.  It 
would  seem  that  the  institution  was  formally  located  at  York,  but, 
instead  of  giving  the  notes  or  their  proceeds  to  the  society,  the  land 
of  plaintiff  was  purchased,  and  conveyed  to  "Anson  B.  Codding,  trus- 
tee," he  in  turn  conveying  to  the  missionary  society.  Codding  in- 
dorsed without  recourse  a  number  of  subscription  notes  to  Munson, 
and  these  notes,  together  with  other  items  accepted  by  Munson,  made 
up  the  sum  of  $9,750,  which  Munson  admits  receiving.  It  is  not  con- 
tended that  the  price  was  other  than  claimed,  or  that  the  remainder 
was  paid.  The  only  question  is  as  to  Codding's  personal  liability 
therefor.  So  far  as  has  been  stated,  the  evidence  is  quite  clear  and 
free  from  conflict.  As  to  the  extent  of  Codding's  authority,  if  he  pos- 
sessed any,  and  the  nature  of  the  transactions  between  him  or  other 
citizens  of  York  on  the  one  side  and  Munson  on  the  other  with  refer- 
ence to  the  purchase,  the  evidence  is  exceedingly  vague,  and  leaves 

12  Tart  of  tbo  (ipiiiion  l.s  omitted. 


(Ids        EFFECTS  AND  CONSEQUENCES  OF  THE  UELATION    (Part  3 

iiiucli  to  inference,  if  not  to  conjecture.  Still  it  is  upon  the  last  ques- 
tion that  the  case  must  be  made  chieily  to  turn. 

It  is  the  general  rule  that  one  who  assumes  to  act  as  a^anit  for  a 
principal  who  has  no  legal  status  or  existence  renders  himself  indi- 
vidually liable  on  contracts  so  made.  Learn  v.  Upstill,  52  Neb.  271, 
72  N.  W.  213.  This  doctrine  receives  its  most  frequent  application  in 
cases  like  the  present,  where  a  person  or  committee  incurs  obligations 
as  the  result  of  instructions  given  by  a  body  gathered  together  infor- 
mally for  a  special  purpose,  and  possessing  no  definite  membership  or 
continued  power  of  existence.  The  rule  is  founded  upon  a  presump- 
tion of  fact,  and  is  not  the  expression  of  any  positive  or  rigid  legal 
principle.  The  presumption  referred  to  is  that  the  parties  to  a  contract 
contemplate  the  creation  of  a  legal  obligation  capable  of  enforcement, 
and  that,  therefore,  it  is  understood  that  the  obligation  shall  rest  on 
the  individuals  who  actively  participate  in  the  making  of  tlie  contract, 
because  of  the  difficulty  in  all  cases — the  impossibility  in  many — of 
fixing  it  upon  the  persons  taking  part  in  or  submitting  to  the  action  of 
the  evanescent  assemblage.  If,  however,  the  person  with  whom  the 
contract  is  made  expressly  agrees  to  look  to  another  source  for  the 
performance  of  its  obligations,  or  if  the  circumstances  be  such  as  to 
disclose  an  intention  not  to  charge  the  agent,  as  where  the  other 
agrees  to  accept  the  proceeds  of  a  particular  fund,  there  is  no  lon- 
ger reason  to  indulge  the  presumption,  and  it  may  be  rebutted  by 
proof  of  such  facts.  This  qualification  of  the  general  rule  is  clearly 
indicated  in  Learn  v.  Upstill,  and  is  recognized  by  nearly  all  the  cases 
discussing  the  general  subject.  See  cases  cited  by  Judge  Norval  in 
Learn  v.  Upstill;  also  Heath  v.  Goslin,  80  Mo.  310,  50  Am.  Rep.  505  ; 
Button  V.  Winslow,  53  Vt.  430;  Comfort  v.  Graham,  87  Iowa,  295, 
54  N.  W.  242. 

Applying  these  principles  to  the  case  at  bar,  the  evidence  would 
raise  prima  facie  the  presumption  upon  which  the  general  rule  is 
based.  On  the  other  hand,  it  was  sufficient  to  justify  the  inference  that 
the  plaintiff  did  not  look  to  defendant  personally,  but  was  to  receive 
merely  the  subscription  notes,  or  their  proceeds.  The  instructions 
should  have  stated  the  law  as  we  have  indicated  it,  and  submitted  to 
the  jury  the  issues  bearing  thereon.  Instead  thereof,  the  court  charged 
as  follows:  "If  you  find  from  the  evidence  that  Codding  was  in 
this  transaction  only  agent  and  trustee  for  the  Mothers'  Jewels  Home, 
and  that  all  his  transactions  as  such  agent  and  trustee  have  been  per- 
formed in  good  faith,  then  you  should  find  for  the  defendant."  This 
was  erroneous,  because  it  made  Codding's  release  from  liability  de- 
pend upon  his  acting  as  agent  for  the  home,  and  his  performing  his 
duty  in  good  faith.  It  was  not  claimed  that  he  was  agent  for  the  home, 
but  for  the  citizens  of  York.  This  principal  having  no  legal  status, 
the  instruction  should  have  been  that  Codding  was  liable  unless  the 
agreement  was  that  Munson  was  to  look  solely  to  the  subscriptions. 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  669 

The  error  was  prejudicial  to  the  defendant,  because  there  was  no  evi- 
dence of  an  agency  such  as  the  instruction  submitted, ^^  and  a  verdict 
for  plaintiff  was  therefore  required  without  regard  to  that  phase  of  the 
evidence  which,  if  properly  submitted,  might  have  induced  a  diflferent 
finding.     *     *     * 

Reversed  and  remanded. 


Ex  parte  HARTOP. 

(High  Court  of  Chancery,  ISOG.    12  Ves.  Jr.  349.)  -/  ^. 

This  petition  was  presented  by  the  messenger  under  a  Commission 
of  Bankrupt,  upon  the  petition  of  George  Sanders ;  praying,  that  the 
Solicitor,  who  sued  out  the  Commission,  or  the  petitioning  creditor. 
or  one  of  them,  may  pay  to  the  petitioner  the  sum  of  i26.  13s.  the  bal- 
ance due  upon  his  bill  of  fees,  and  also  the  sum  of  £183..  paid  by  him 
under  an  award  for  damages  and  costs  in  an  action  of  trespass  brought 
against  him  :  the  Bankruptcy  not  being  established ;  and  the  Commis- 
sion being  superseded ;  and  the  petitioning  creditor  being  abscondad. 
The  petitioner  had  sued  the  petitioning  creditor;  and  obtained  from 
him  payment  in  part  of  his  bill. 

ErskinE,  Lord  Chancellor.  This  petition  has  two  very  important  / 
objects;  1st,  as  it  regards  the  justice  of  this  demand:  2dly,  as  to 
the  jurisdiction  to  give  relief  to  the  parties,  if  they  are  in  a  condition  '^. 
to  have  it  any  where.  The  prayer  of  the  petition  is  material:  not, 
that  the  Solicitor  only  may  pay,  but,  that  either  he  or  the  petitioning 
creditor,  or  one  of  them,  shall  pay  the  residue  of  the  petitioner's  bill, 
as  messenger,  and  a  further  sum  composed  of  damages  and  costs, 
paid  by  the  petitioner  under  an  award  in  an  action  brought  against 
him. 

No  rule  of  law  is  better  ascertained,  or  stands  upon   a  stronger 
foundation,  than  this ;   that,  where  an  agent  names  his  principal,  tlie^ 
_2riii£ipal  js^. responsible :    nor  the  agent:    but,  for  the  application  of 
that  rule,  the  agent  must  name  his  principal  as  the  person  to  be  .re-.. 
"IjjQnsibJe.     In  the  common  case  of  an  upholsterer,  employed  to  fur- 
"nish  a  house:   dealing  himself  in  only  one  branch  of  business,  he  ap- 
plies to  other  persons  to  furnish  those  articles,  in  which  he  does  not 
deal.     Those  persons  know,  the  house  is  mine.     That  is  expressly 
stated  to  them.     But  it  does  not  follcjw,  that  I,  though  the  person  to 
have  the  enjoyment  of  the  articles  furnished,  am  responsible.     Sup- 
pose another  case.     A  person  instructs  an  Attorney  to  bring  an  ac- 
tion;    who  employs  his  own  stationer,  generally  employed  by  him. 
The  client  has  nothing  to  do  with  the  stationer,  if  the  Attorney  be- 

13  The  burden  of  Kliowinf;  lliaf  llic  iiriiiil|)!il  is  non-ox!stont,  or  a  sluini,  Is 
on  th«  pnrty  suinc  the  asent.  If  there  Is  a  resi)onsil)le  prlnripnl.  the  »),'eiit 
who  lias  acted  for  hlui,  of  c-otirse,  Is  not  liable.  I'^iltou  v,  Sewall,  IIG  App. 
Dlv.  711.   1012   N.    Y.   Supp.   10!)  (11)07). 


(A^ 


M  /-Ou  ryM 


7, 


/.il- 


rS^ 


tlTti 


i:FbM:CTS   AN1>    COXSKQUENCE^   OF  THE    UIOLATION 


(Part  3, 
riic  stationer  there- 


0^ 


i 


comes  insolvent.     Tlic  cli<.'nt  pays  the  Attorney 

fore  has  no  remedy  as;ainst  the  ehent.  ^^ 

This  petitioner  insists,  that  the  v^oHcitor  must  be  taken  to  be  theP^vft/i 
person  cm])loyin.u:  him;   to  whom  he  is  to  loolc ;    not  the  petitioning  j/  ^ 
creditor.     Tlie  SoHcitor,  undertaking  to   sue   out   the   Commission,  "^ 
goes  to  his  own  Messenger;    who,  being  employed  by  the  Solicitor,  ('f-J^ 
has  no  remedy  against  the  petitioning  creditor.     I'ut  this  petitioner 
appears  to  me  to  have  decided  this  for  himself;  having  sued  Sanders, 
the  petitioning  cretlitor ;    and   having  obtained    a   note    from   him; 
whicli  was  paid.    What  colour  was  there  for  proceeding  against  him, 
the  Solicitor  being  the  original  undertaker;    and  no  pretence  of  a 
joint  undertaking?     That  objection,  that  the  Solicitor  employed  the 
Messenger,  the  petitioning  creditor  not  going  near  him,  but  being  a 
total  stranger,  the  messenger  therefore  being  to  look  to  the  Solicitor 
only,  does  not  lie  here:    this  petitioner  having  considered  the  peti- 
tioning creditor  as  his  debtor;    w'hich  could  not  be,  if  the  Messenger 
|iad  been  employed  by  the  Solicitor.     It  is  not  necessary  therefore 
to  decide  the  general  question. 

As  to  the  jurisdiction,  I  should  regret  to  find,  I  have  no  jurisdic- 
tion. The  party  suing  out  a  Commission  under  the  authority  of  the 
J,  Great  Seal,  employing  the  Messenger,  either  himself,  or  by  his  Solici- 
tor, to  give  it  effect,  giving  a  bond  to  the  Great  Seal,  and  responsi- 
ble to  the  Great  Seal  for  the  due  prosecution  of  the  Commission,  I 
have  no  doubt  of  the  jurisdiction.  The  Solicitor,  if  responsible  in 
any  degree,  will  be  responsible,  not  only  for  the  fees,  but  also  for  all 
the  consequences;  as  it  was  his  duty  to  direct  the  Messenger  to 
withdraw;  for  I  will  not  put  the  Messenger  in  a  situation  of  such 
responsibility.  The  Solicitor  must  also  account,  if  he  has  any  money 
of  Sanders's  in  his  hands.    Let  him  make  an  affidavit  as  tp  that. 


/ 


..-fVA<Y 


V.  Principal  Undisclose;d 

MURPHY  V.  HELMRICH. 
(Supreme  Court  of  California,  1884.    66  Cal.  69,  4  Pac.  958.) 

Action  to  recover  the  difference  between  the  contract  and  market 
price  of  one  hundred  shares  of  gas  stock  which  plaintiff  claims  to 
have  sold  to  defendants. 

McKee,  J.^*  *  *  *  q'i-,£  defendants,  by  their  answer  to  the 
complaint  in  the  action,  specifically  denied  the  averments  of  the  com- 
plaint, and  set  up  that  they  acted  in  the  transaction  "solely  as  brokers 
and  agents  for  others,"  and  the  only  questions  at  issue  were:  (1) 
Did  the  defendants  buy  the  stock  as  charged  in  the  complaint?  (2j 
Did  they  buy  for  themselves  or  as  agents  for  another?     '/' 

14  I'art  of  the  opinion  is  omitted. 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  G71 

The  evidence  shows  that  there  was  a  complete  verbal  contract  of 
sale,  which  was  followed  by  written  admissions  of  the  contract,  signed 
by  the  defendants.  These  they  signed  by  their  own  names,  and  not 
as  agents  for  any  other  person  whom  they  named  as  principal.  In 
thus  signing  them  they  bound  themselves  as  principals,  even  if  they 
were  acting  for  another,  unless  it  was  so  understood  and  intended  be- 
tween them  and  their  vendor.  But  their  memoranda  did  not  disclose 
the  name  of  any  principal,  and  there  was  no  evidence  given  tending 
to  prove  that  there  was  any  other  known  person  for  whom  they 
acted  and  intended  to  bind.  Where  an  agent  does_npt._attempt  in_ari 
instrument  to  bind  his  principal,  and  in  terms  imposes  the  obliga-  y 
tion  on  himself,  the  rule  is  that  he  incurs  by  such  act  a  personal  lia- 
I)ility.  even  aljhough  he  described  hiiii-r'.i  a.-  .i-ini.  D;;\l  n  v. 
Warne,  43  N.  J.  Law,  659.  This  personal  iiabilii}'  they  a^^unlcd ; 
for,  while  vaguely  intimating  that  there  was  somebody  for  whom 
they  were  acting,  they  guarantied  the  plaintiff,  as  their  vendor,  that 
he  would  be  paid  the  $95.50  per  share  for  the  stock  which  they 
agreed  to  buy  from  him.  and  afterwards  directed  him  to  sell  it  and 
they  would  make  good  any  deficiency.  He  accordingly  sold  the  stock 
in  open  market  and  accounted  to  them.  Under  those  circumstances 
they  are  not  relievable  from  responsibility  on  the  ground  of  agency 
for  some  unknown  person. 

"If  a  person,"  says  Chancellor  Kent,  "would  excuse  hini.-clf  from 

^resjKUisibiiity.  on_tke.-^p^iuad_j;iLagSi.icyj  he_must  show  that  he  dis- . 

^losed_  his  jDrincipal  at  the  time  of  making  the  contract,  and  that  he, 

acted  on  his_behalf  scas.JX)  enal^lc  ilic  parly  with  whom  he  deals  to_ 

have  recourse  to  the  principal  in  ca.-e  lUc  agent  had  authority.  tq_b^ind_ 

him."     "The  agent  become   i)ti>Mna!Iy   liable  when  the  principal  is. 

not  known,  or  when  there  is  no  rc.'^jionsible  principal,  or  where  the 
agent  becomes  liable  by  an  undertaking  in  his  own  name,  or  wlieu  he, 
o:ceeds  his  ^o\ver."     2  Kent,  Comm.  630,  631.^° 

And  such  is  the  hjiglish  law :  "A  man  has  a  right  to  the  charac- 
ter, credjt,  and  substance  of  tlie  person  with  whom  he  contracts.  If, 
"  therefore,  he  enters  into  a  contract  with  an  agent  who  does  not  give 
his  princTpaTs  name,  the  presumption  is  that  he  is  invited  to  give 
credit  to  the  agent;  still  more  i[ the  agent  does  not  disclose  his  prin- 
cipaTs" existence."  .^Trison,  Cont.  345.  Sec,  also,  Benj.  Sales,  235, 
52,  53. 

We  fmd  no  error  in  the  record.    Judgment  and  order  affirmed. 

>o  'J'ho  accnt  may  .so  contrart  as  to  make  botli  himself  and  liis  i)rinciiial  lia- 
ble by  adding  his  personal  responsibility  to  (hat  of  the  itriiuliml.  Hockarty 
V.  Tillot.soM,  CA  Nfli.  -WVl,  S!>  N.  W.  l(t."0  (1!)02).  In  general,  in  sneh  ca.ses, 
the  third  i)erson  may  pnrsne  eitlKT,  or  both,  until  he  recovers  the  contract 
price.  Knajip  v.  Simon.  !><»  N.  Y.  liS4  (ISSJ).  As  to  election,  and  wli.-it  consti- 
tuies,  see  post,  p.  7oS  £f . ;  also,  Am.  Alkali  Co.  v.  I\urtz  (,C.  C.)  IIJI  I'Vd.  (JU; 
(I'.IO.'o.  There  can  lie  but  one  rceuvery.  ItuuMsuvlUe  V.  Insuianre  Co.,  l;Jb  xn. 
C.  IDl,  50  S.  E.  UIO  (I'JUo). 


GT-        EFFECTS  AND  CONSEQUENCES  OF  THE  UELATION    (Part  3 


COCHRAN  V.  RTCE. 

(Suproine  Court  of  South  Dakota,  1910.     2(!  S.  D.  393,  128  N.  W.  583,  Ann. 

Cas.   19i:{B,  570.) 

Plaintiff  ownod  certain  hay.  and  a  granary  containing  wheat,  all 
of  the  value  of  $912.  Defendant  was  managing  agent  of  the  West- 
ern Land  &  Investment  Company,  which  owned  40  acres  adjoining 
the  granary.  Rice  employed  one  Stevens  to  plow  this  field.  Stevens 
sent  his  two  boys  to  do  the  plowing,  and  they  set  fire  to  stubble  in 
the  field.  The  fire  spread  and  burned  plaintiff's  hay  and  granary. 
Plaintiff  recovered  judgment  and  defendant  appeals. 

Smith  J.^°  [After  holding  that  Stevens  was  not  an  independent 
contractor:]  *  *  *  Appellant's  contention  that  he  cannot  be 
held  liable  because  he  acted  only  as  agent  of  the  corporation  cannot 
be  sustained.  His  own  evidence  affirmatively  shows  that  his  agency 
was  not  disclosed  to  Stevens,  nor  is  it  shown  that  Stevens  had  any 
knowledge  of  the  facts.  Having  assumed  to  act  as  principal,  no 
reason  is  apparent  why  he  should  not  be  held  to  have  assumed  the 
responsibilities  of  a  principal  toward  third  persons  for  the  act  of  a 
servant  or  employe.  In  31  Cyc.  1555,  the  rule  is  very  clearly  and 
concisely  stated:  "An  agent  who  enters  into  a  contract  in  his  own 
name  without  disclosing  the  identity  of  his  principal  rendcs  himself 
personally  liable,  even  though  the  third  person  knows  that  ne  is  act- 
ing as  agent,  unless  it  affirmatively  appears  that  it  was  the  mutual 
intention  of  the  parties  to  the  contract  that  the  agent  should  not  be 
bound.  With  stronger  reason,  an  agent  who,  without  disclosing  his 
agency,  enters  into  contractual  relations  in  his  own  name  with  one 
who  is  unaware  of  the  agency,  binds  himself  and  becomes  subject 
to  all  liabilities,  express  and  implied,  created  by  the  contract  and 
transaction,  in  like  manner  as  if  he  were  the  real  principal,  although 
in  contracting  he  may  have  intended  to  act  solely  for  his  principal. 
If  the  agent  would  avoid  personal  liability  on  a  contract  entered  into 
by  him  in  behalf  of  his  principal,  he  must  disclose  not  only  the  fact 
that  he  is  acting  in  a  representative  capacity,  but  also  the  identity  of 
his  principal,  although,  if  the  other  party  has  actual  knowledge  of  the 
principal's  identity,  it  would  have  the  same  effect  to  relieve  the  agent 
as  a  disclosure  by  the  latter. 

The  disclosure  of  the  principal's  identity  need  not  be  made  at  the 
inception  of  the  transaction;  it  is  sufficient  if  it  is  made  before  lia- 
bility is  incurred  on  either  side ;  but  a  disclosure  made  after  liability 
is  incurred  comes  too  late  to  relieve  the  agent  from  liability."  31 
Cyc.  1560,  says:  "While  an  agent  is  not  liable  to  third  persons  for 
injury  resulting  from  his  omission  to  perform  a  duty  owed  to  the 
principal  alone,  he  is  liable  to  them  for  injury  resulting  from  his 

18  Tart  of  the  opiuion  is  oiuitted. 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  673 

misfeasance  or  malfeasance,  meaning  by  those  terms  the  breach  of 
duty  owed  to  third  persons  generally,  independent  of  the  particular 
duties  imposed  by  his  agency.  Accordingly,  an  agent  may  be  held 
liable  in  damages  to  third  persons  for  conversion,  fraud,  and  deceit, 
and  even  for  negligence.  In  an  action  against  an  agent  for  misfeas- 
ance or  malfeasance,  it  is  no  defense  that  he  acted  as  agent  or  by 
the  authority  or  direction  of  another,  for  no  one  can  lawfully  au- 
thorize the  commission  of  a  tort." 

Appellant  also  contends  that  the  evidence  fails  to  show  that  the 
act  of  Stevens  in  starting  the  fire  was  done  as  a  necessary  part  of 
the  services  rendered  under  his  employment.  This  question  was  fully 
and  fairly  submitted  to  the  jury  under  instructions  decidedly  favora- 
ble to  the  defendant,  upon  evidence  disclosing  all  the  surrounding 
conditions,  and  their  verdict  cannot  be  disturbed  upon  appeal. 

A  full  and  careful  consideration  of  the  entire  record  before  us  dis- 
closes no  reversible  error. 

The  order  and  judgment  of  the  trial  court  are  afifirmed. 


WINSOR  V.  GRIGGS." 

(Supreme  Judicial  Court  of  Massachusetts,  1849.     5  Cush.  210.) 

Wilde,  J.    This  is  an  action  of  assumpsit  upon  an  award,  and  the  ^ 

first  question  to  be  decided  is.  whether  the  defendant  is  bound  by         f / 

tlie  submission  to  arbitration,  he  having  signed  the  same  as  agent^ 

buT^witho^ut  disclosing  the  name  of  his  principal.    And  on  this  ques-;_ 
tion  the  rule  of  law  is  well  laid  down  by  Judge  Story  in  his  Com- 
mentaries on  tho  T.aw  of  Acjency,  §§  2C^C\  2C^7 .     "A  person," 
"contractinc,^  .'i-  .i,''!',    ■..ill  l^c  ik.T'-mikiII}'   rc^j)!  iiisi1)lc,  wlur 


tmie  of  making  the  contract,   he  does   not  disclose  the   fact 

"agencyT    7^d_  tTie   sarne^principle  will  apply  to  contracts   made  b^' 
agents,  where  they  arc  known  to  be  agents,  and  acting  in  that  char-  , 
acter,  but  the  nanie  of  their  principal  is  not  disclosed;    for  until  such 

"flisclosureT^it  is  impossible  to   suppose,   that   the   (jIIkt  contracting 
party  is  willing  to  enter  into  a  contract,  exonerating  the  agent,  and 

"trusting  to  an  unknown  principal,  who  may  be  insolvenl,  or  incapa- 
ble  of  binding  him  '  li  " 

This  is  a  very  rcasonaljle  rule  of  law,  and  it  is  supported  by  the 
authorities.  2  Kent,  630,  631,  and  the  cases  there  cited.  "If  a  per- 
son" says  chancellor  Kent,  "would  excuse  himself  from  responsibil- 
ity on  the  ground   of  agency,  he  must  show'  that'Te  disclosed  his 

"prnicipal  at  the  time  of  makTnglTic  contract."     The  same   principle 
IS  laifl  down  as  a  riilc  ot  law  weirsettled,  by  lord  Tenterdcn,  in  the 

IT  Afcord:     Iloraii  v.  Flutxlu-s  (D.  C.)  lliO  Fed.  248  (1903),  afflrmed  129  Fed. 
100.J,  G4  C.   C.  A.  !5S1   (llJOl). 
Goiir).rK.&  A. — \'A 


'  he  says,      ^^ 

\',   ai    tljp    JT  j  a 

:t  of    his/ ^-^C^Cc/ 


674  EKKIX'TS   AM)   CC)NSi:Qr  KNCKS   OF  TUi;    UKLATION  (Tait    3 

case  of  Tlioinpson  v.  Davt'iiport,  9  Vk  8c  C.  7^^,  and  b\-  Parker,  C.  J., 
in  Stackpole  v.  Arnold.   11   Mass.  27.  6  Am.  Dec.   150.     It  is  clear^ 
therefore,  that  the  defendant  is  personally  bonnjljn'  the  submission^ 
wlilch  he  signed  as  a^ent,  as  he   did   not  disclose  the  name  of  his 
principal,  and  it   does  not   appear  that  the  same  was  known  to  the 
plaintiffs.     *     *     *  ""    ' 

Judgment  of  the  court  of  common  pleas  aftirmed. 


NICHOLS  V.  WEIL. 

(Supremo  Court  of  Now  York,  Appellate  Term,  inoo.     30  Misc.  Rep.  441,  Gli 

N.  Y.   Supp.  477.) 

MacLEan,  J.  Upon  evidence  ample  therefor  the  learned  justice 
below  determined  that  the  plaintiff  had  rendered  work,  labor,  and 
services  and  furnished  material  upon  certain  premises  under  an 
agreement  with  the  defendant,  who  testified  that  he  had  informed 
the  plaintiff  that  he  was  not  the  owner,  but  the  attorney  for  the  own- 
er, of  the  premises.  Inasmuch  as  the  defendant  did  not  disclose  the 
name  of  his  principal,  his  contention  against  personal  liability  was  in- 
effectual. Argersinger  v.  MacNaughton,  114  N.  Y.  535,  21  N.  E. 
1022,  11  Am.  St.  Rep.  687;  Nelson  v.  Andrews,  19  Misc.  Rep.  623, 
44  N.  Y.  Supp.  384.1 « 

Judgment  affirmed,  with  costs.     All  concur. 


HOLT  v.  ROSS.^» 

(Commission  of  Appeals  of  the  State  of  New  York,  1S73.    54  N.  Y.  472,  13  Am. 
Kep.  G15,  affirmiiis  59  Barb.  554.) 

Action  to  recover  back  the  amount  paid  by  plaintiff  to  the  Mer- 
chants' Union  Express  Company  of  which  Ross  was  president,  upon  a 
draft  upon  a  forged  indorsement  by  the  payee.  The  draft  was  drawn 
upon  Holt  by  a  creditor  and  was  payable  to  one  T.  D.  Ford.     It 

18  Xeely  v.  State,  fiO  Ark.  60,  2S  S.  W.  800.  27  L.  R.  A.  503,  46  Am.  St. 
Rep.  148  (1804),  in  which  a  minor  l)()n,u;ht  whisky  "for  two  siek  teachers." 
The  court  held  this  a  sale  to  the  minor,  and  therefore  illegal. 

10  Approved  in  McClure  v.  Cent.  Trust  Co..  165  N.  Y.  108,  58  N.  E.  777,  53 
L.  R.  A.  153  (1900),  hut  cf.  Alexander  &  lOdKar  Lumlier  Co.  v.  McGeehan,  124 
Wis.  325,  102  X.  W.  571  (1905),  in  which  the  court  pointed  out  that  one  dealing 
with  the  ajrent  of  a  known  principal,  in  the  rcfj;ular  course  of  conducting  the 
princiiial's  i»usiness  l)y  .su<h  agent,  is  iiresumptively,  in  the  absence  of  any 
evidence  contra,  dealing  as  agent  on  the  credit  of  the  princii)al.  Forrest  v. 
McCarthy.  30  Mi.sc.  Kcp.  125,  61  N.  Y.  Supp.  853  (1899).  in  which  the  plain- 
tiff's testiujony  clearly  showed  she  consciously  dealt  with  defendant  as  the 
representative  of  his  jtrinciitai,  and  that  she  had  liad  previous  dealings  of  the 
.'iame  sort.  The  question  is  not  whether  one  is  agent,  is  acting  as  such,  or  is 
kuown  to  be  such,  but  whetlier  in  the  given  transaction  it  was  understood  by 


Cll.  3)  LIABILITY    OF    THE    AGEXT    TO    THE    THIRD    PERSON  0l5 

fell  into  the  hands  of  a  stranger,  who  forged  the  indorsement  of  T. 
D.  Ford,  and  the  draft  so  indorsed  was  cashed  by  the  Express  Com- 
pany. Plaintiff,  supposing  the  indorsement  genuine,  paid  the  Ex- 
press Company,  and  afterwards  was  compelled  to  pay  a  second  time 
to  the  creditor.  The  Express  Company  claimed  to  have  acted  merely 
as  agent  in  the  collection. 

Earl,  Com.  The  Express  Company,  when  it  presented  the  draft 
to  the  plaintiffs  for  payment  and  received  payment,  did  not  disclose 
its  agency;  therefore  it  is  liable,  as  if  actually  principal  in  the  trans- 
action. It  was  so  decided  in  Canal  Bank  v.  Bank  of  Albany,  1  Hill, 
287.  It  was  not  sufficient  that  the  defendant  acted  as  agent ;  to 
shield  itself  from  lial)ility  it  should  have  disclosed  its  agency.  Such  is 
the  rule  as  to  all  agents.  To  shield  themselves  from  liability  for  their 
acts  they  must  give  the  names  of  their  principals.  Such  is  the  rule 
in  reference  to  the  transfer  of  negotiable  paper.  If  the  transferrer 
be  only  an  agent,  if  he  did  not  at  the  time  disclose  the  name  of  his 
principal,  and  the  bill  or  note  proves  to  be  a  forgery,  he  is  personally 
liable  for  the  consideration  received.  Gurney  v.  Wormsley,  4  Ell.  & 
B.  133:   Morrison  v.  Currie,  4  Duer,  79;   2  Pars.  Notes,  38. 

It  matters  not  that  the  general  business  of  the  express  company 
was  to  act  as  agent  for  others.  It  could  have  owned  this  draft  and 
have  collected  it  as  principal.  Knowledge  in  plaintiffs  that  defendant 
might  have  acted  as  agent  was  not  enough ;  and  it  was  not  the  duty 
of  the  plaintiffs  to  inquire,  before  paying,  whether  the  defendant  was 
acting  as  principal  or  agent.  It  was  the  duty  of  defendant,  if  it  de- 
sired to  be  protected  as  agent,  to  have  given  notice  of  its  agencv. 
The  drawees  of  a  draft  are  supposed  to  know  the  signature  of  the 
drawer,  but  are  not  supposed  to  have  the  same  knowledge  of  the 
signature  of  an  indorser.  By  acceptance  and  payment  the  drawees 
do  not  admit  or  guarantee  the  genuineness  of  the  indorsement  by  the 
pavee.  Canal  Bank  v.  Bank  of  Albany,  supra;  1  Pars.  Notes,  322; 
Id.'  590. 

This  is  therefore  a  clear  case  for  affirmance.-" 

fho  icirtics  Hint  tlio  fliird  porsdii  dcnlf  on  llic  credit  of  tlio  nsoiit.  or  on  tlmt 
of  till'  |>riii<M|i!iI.     \\'oiMliiii;;(oii  v.  Cowlcs,  112  Msiss.  :',()  (]S7:{). 

TIm'  fact  that  out-  is  a  factor  or  hroUcr  would  not  relievo  liini  from  the 
necessity  of  disclosing'  liis  prineiiial.  if  he  would  escape  i»ersonal  liahilitv. 
Ilamliii  V.  Ahell,  IL'O  .Mo.  ]SS.  LM  S.  W.  HKi  (\SU[);  Ar^'ersinu'cr  v.  .Mac.NauuJi- 
toii.  114  N.  Y.  nisn.  21  N.  K.  lOliL',  11  Am.  St.  Rep.  CST  (ISS!)).  And  tlie  same 
thlnu  Is  true  of  an  an<-tioneer.  Mey«'r  v.  Kedmond,  141  Apj).  l)iv.  I'J.'l,  V2~t 
N.  Y.  Siii.p.  \u:,2  (litHO;  .Mills  v.  Ilnnt.  20  \V<-nd.  4.;i  (18;j,S).  Cf.  next  case 
over. 

20  Tlie  dissenting;  ojiinioii  of  Ifeynolds,  C,  Is  omitted. 


676        EFFECTS  AND  CONSEQUENCES  OF  THE  RELATION    (Part  3 

/ 

MERCER  V.  LEIIIY. 

(SuproTiie  Court  of  Michigan,  11)05.     139  Mich.  447,  lOli  N.  W.  972.) 

Assumpsit  by  Mercer  against  Eeihy, 

Hooker,  J.^*  Coombs  stole  some  horses,  and  brought  them  to 
defendants'  auction  rooms,  where  they  were  sold  at  auction  to  the 
plaintilT,  who  afterward  sued  the  auctioneers  to  recover  the  money 
paid,  and  a  judgment  of  no  cause  of  action  was  rendered  by  the  cir- 
cuit judge  before  whom  the  case  was  tried  without  a  jury.  Plaintiff 
appealed,  and  alleges  error  upon  the  finding  of  fact  that  the  auc- 
tioneer sufficiently  disclosed  his  principal  to  relieve  the  defendants, 
his  employers,  from  liability.     *     *     * 

The  rule  is  well  established  that  an  auctioneer  who  docs  not  dis- 
close his  principal  is  presumed  to  contract  upon  his  own  behalf,  ex- 
cept where  he  expressly  contracts  upon  the  understanding  that  he 
will  not  do  so.  On  the  other  hand,  if  he  discloses  the  fact  of  agency 
and  his  principal,  the  law  presumes  that  he  does  not  contract  upon 
his  own  behalf,  but  for  the  principal.  The  question  here  seems  to 
be  whether  anything  less  than  a  disclosure  of  the  name  of  the  prin- 
cipal is  sufficient,  and  a  number  of  authorities  are  cited  which  use 
language  to  the  effect  that  a  disclosure  of  the  name  of  the  principal 
is  essential.  Many  of  these  are  cases  where  there  is  nothing  to  indi- 
cate that  there  was  an  agency;  others  that  the  principal  was  not 
present,  and  no  clue  to  his  identity  could  be  found  in  the  facts  stated; 
while  there  are  others  which  show  that  there  was  an  absent  principal, 
yet  the  language  used  makes  such  indefinite  reference  to  him  as  not 
to  afford  an  opportunity  to  immediately  ascertain  who  he  is. 

Such  is  the  case  of  Neely  v.  State,  an  Arkansas  case  reported 
in  60  Ark.  66,  28  S.  W.  800,  27  L.  R.  A.  503,  46  Am.  St.  Rep.  148, 
where  a  minor  bought  intoxicating  liquor,  which  he  said  was  for  two 
teachers  at  a  neighboring  college,  without  naming  or  otherwise 
identifying  them.  Raymond  v.  Proprietors  of  Crown  &  Eagle  Mills, 
2  Mete.  (Mass.)  319,  is  another  case  where  the  court  held  that  it  was 
not  error  to  submit  the  question  of  the  sufficiency  of  the  disclosure 
to  the  jury,  where  an  agent  stated  that  goods  which  he  was  buying 
were  for  the  C.  &  E.  Mills,  the  language  being  ambiguous.  So  in 
Cobb  v.  Knapp,  71  N.  Y.  350,  27  Am.  Rep.  51,  the  statement  that 
the  property  was  for  the  Blissville  Distillery  was  held  not  conclu- 
sive. In  each  of  these  cases  except  the  first  there  is  an  implication 
that  the  facts  shown  might  be  found  sufficient,  otherwise  they  should 
not  have  gone  to  the  jury.  Tliey  were  not  so  strong  in  favor  of  the 
agent  as  the  case  before  us,  because  the  opportunity  to  ascertain  was 
not  immediately  present;  and  in  the  case  last  mentioned  there  was 
testimony  not  only  that  the  plaintiff  did  not  know  who  were  the  pro- 

21  Part  of  the  opinion  is  omitted. 


Ch.  3) 


LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON 


GT7 


prietors  of  the  distillery,  but  that  the  defendant  directed  the  property 
to  be  charged  to  him. 

In  Hanson  v.  Roberdean,  Peake,  N.  P.  163,  it  is  indicated,  as  it  is 
in  many  later  authorities,  that,  where  the  auctioneer  fully  discloses 
the  fact  of  his  agency  and  his  principal,  the  presumption  arises  that 
iTe'Tr not  contracting  upon  his  own  behalf,  and  that  the  law  recog- 
nizes~the"traiisaction  as  one  on  behaH  of  the  principal.  In  2  Kent, 
Com.  630','33r,' it  is' said:  "If  a  person  would  excuse  himself  from 
responsibility  on  the  ground"  of  agency,  he  must  show  that  he  d^  ' 
closed  his  principal  (not  the  name  of  his  principal)  at  the  time  of  mak- 
ing the_contract,  and  that  he  acted  on  his  behalf."  Other  authorities 
quoTecTfrom  text-writers  and  other  sources  are  found  in  Neely  v. 
State,  60  Ark.  66,  28  S.  W.  800,  27  L.  R.  A.  504,  46  Am.  St.  Rep. 
148.    See,  also,  Reinhardt  on  Agency,  §  303. 

We  are  of  the  opinion  that  the  statement,  frequently  found,  that 
the  agent,  to  avoid  personal  Hability,  must  disclose  the  name  of  his 
principal,  is  due  to  the  fact  that  such  is,  in  the  nature  of  things,  the 
natural  and  ordinary,  and  many  times  the  only  convenient  and  prac- 
ticable, way  of  identifying  him.  The  important  information  to  be 
given  to  the  purchaser  is  that  the  auctioneer  is  an  agent,  acting  for  a 
principal  whom  he  discloses,  and  it  would  seem  that  the  accurate 
giving  of  his  principal's  name  is  not  indispensable  where  other  means 
of  clearly  pointing  out  and  identifying  him  are  adopted. 

The  testimony  in  this  case  indisputably  shows  that  the  principal 
was  present,  and  in  the  presence  of  the  plaintiff  identified  himself  to 
a  degree  sufficient  to  carry  that  question  to  a  jury,  or  to  the  court, 
where,  as  in  this  case,  a  jury  has  been  waived.  It  is  equally  certain 
that  the  auctioneer  disclosed  the  fact  of  agency,  and  it  is  inferable 
that  he  designed  to  and  did  inform  those  present  that  he  was  not 
selling  the  property  as  his  own,  but  for  and  on  behalf  of  a  man  who 
came  from  Ypsilanti,  was  present,  and  upon  whom  he  called  to  ap- 
pear and  make  himself  known."  We  are  of  the  opinion  that  the 
court  did  not  err  in  treating  the  question  as  one  of  fact,  subject  to 
decision  by  him.  Of  course,  we  cannot  review  his  finding  upon  the 
merits. 

The  judgment  is  afTirmcd. 

22  Wlicn  the  third  party  knows  perfectly  well  of  the  agency  It  Is  not  nec- 
essary f(»r  the  aKciit  to  disclose  It.  Warren  v.  Dickson,  127  111.  IIH  (IS(ili). 
"The  aueiit  need  not  say  lu  so  many  wurds,  'I  am  adiiiK  m(>roly  as  aKciil  for 
A.,  wlio  is  my  i.riiK-ii.;il.' "     I'.rowii  v.  Ames.  .^)0  Minn.  47(i.  <Jl  N.  W.  4-4S  (is'.)l). 

It  Is  not  cnon^'h  ho\v<'Vcr  that  tlie  third  party  has  the  means  of  asccrlainin>; 
the  princiiial,  and  knows  that  the  a^cnt  is  acting  as  asent.  The  principal 
must  in  some  way  he  disclosed.  De  Kemer  v.  Hrown,  105  N.  Y.  410,  HO  N.  K. 
129  (1901) ;  McClnre  v.  Cent.  Trust  Co.,  105  N.  Y.  lOS,  58  N.  E.  777,  53  L.  R. 
A.  153  (1900) ;   Cobb  v.  Knapp,  71  N.  Y.  348,  27  Am.  Kep.  51  (1877). 


<L^ 


078 


yL^4^ 


Wf 


EFFECTS    AM)    CUNSKglKNrKS   OK   Till;    UKliAlToN  (^i'urt   3 


(      \) 


\ 


\\.  For  Mo\i;v  Paio  nv  Mistaki:,  Fraud,  ktc. 
GARY  V.  WEBSTER. 

(rom-t  of  Kiiiii's  lionch,  17LM.     1  Straii,i,'o.    ISO.) 

Pratt.  C.  J.  WIkto  money  is  paid  to  llie  servant  and  lie  misap- 
plies it,  the  party  has  his  remedy  against  the  master  or  servant  at 
eleetion. 

The  defendant  was  a  clerk  of  the  South-Sea  Company,  and  took 
in  the  payments  on  the  third  subscription ;  the  plaintiff  paid  him 
£600..  and  he  by  mistake  never  entered  it  in  the  hook,  but  however 
paid  it  over  to  the  company.  And  the  Chief  Justice  ruled,  that  no 
action  would  lie  against  him.  That  if  he  had  not  paid  it  over  the 
plaintiff  would  have  had  his  option,  either  to  charge  him  or  the  com- 
pany ;  as  in  the  common  case  of  payment  to  a  goldsmith's  servant, 
who  does  not  carry  it  to  the  account  of  his  master,  the  party  has  an 
election  to  go  against  either :  he  may  charge  the  servant,  because  till 
the  money  is  paid  over  the  servant  receives  it  to  his  use;  or  he  may 
pass  by  the  servant  and  make  his  demand  upon  the  master,  because 
the  payment  to  the  servant  is  made  in  confidence  of  the  credit  given 
him  bj)'  the  master. 


vjA.' 


SHEPARD  V.  SHERIN. 


.     / 


"TSuprenie  Court  of  Minnesota,  1890.     43  Minn.  382,  45  N.   W.  718.) 

Action  to_ recover  money  paid  by  mistake.    There  was  judgment  for 
i)laintiffV  and  defendant  appeals. 

.     GiLFiLLAN,  C.  J.     On  the  jevidence,  there  cotild  be  no_c[uestion  of_ 
the  main  facts  in  the  case,  especially  that  the  overpayment  was  merely^ 
ih rough  mistake  of  fact,  and  not  through  any  fraud  or  fault  on  the_ 
j)art  of  defendant;    that  he  received   it  expressly   for  his  principal. 
R.  W.  Sherin,  and  had  paid  the  money  over  to  him  the  same  day. 
These  facts  were  found  by  the  court  below ;    and  on  the  motion  for 
a  new  trial  the  court,  as  appears  from  its  memorandum  filed,   had 
no  doubt  of  the  propriety  of  those  findings.     But  the  coiLrLajsp  found 
as  a  fact  that  the  defendant  so  paid  over  the  money  without  notice, 
of  any  mistake;  and,  because  it  thought  this  findin?r  vya^  not  j|?stified 
By  the  evidence,  it  ordered  a  new  tna!.^     The  evidence  as  to  notice 
would  not  have  jiis'tTfied  any  finding  of  notice  to  defendant  that  would 
have  changed  the  proper  result  of  the  action.     The  law  regulating  the 
liability  of  an  agent  to  the  party  paying  it  for  money  paid  to  him  for. 
his  principal  through  mistake  is  well  settled.    We  find  it  as  well  stated 
as  anywhere  in  Elliott  v.  Swartwout,   10   Pet.   137,  9  L.   Ed.  373: 
"When  the  money  is  paid  voluntarily,  and  by  mistake,  to  an  agent,  and, 
he  has  paid  it  over  to  his  principal,  he  cannot  be  made  personally 


^  £^--^7^- 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON/    /         G79 

respons[ble_L_but_if,.-hcfQr.e  paying^  it  oyerj^  he  is^  appnsed  of  the  \vi\%- 
take^and  required  not  to  pay  it  over,  he  is  personally  liable."  See, 
aTsoT'Buller  v.  Harrison,  1  Cowp.  566;  Hearsey  v.  Pruyn.  7  Johns. 
179;  La  Farge  v.  Kneeland,  7  Cow.  456;  Mowatt  v.  :\IcLelan,  1 
Wend.  173. 

The  notke  of  the  misjake^  and  requirement  not  to  pay  to  the  priuj- ^ 

ci£al^ieed3noM)e  formal.  The  rule  that,  if  he  pays  o~ver  without 
notice,  he  is  not  irahle,  is'for  the  agent's  protection;  and,  to  deprive 
him  of  the  protection,  the  notice  to  him  should  be  sufficient  to  apprise 
him  what  the  mistake  is,  and  that  by  reason  of  it  the  party  paying 
it  to  him  intends  to  reclaim  it.  ,    / 

The  only  notice  of  which  there  was  any  evidence  came  about  i"  y-y^^^^ 
this  way:    The  prmcipal  held  the  note  and  morts^age  of  one  r.urmws.  ^          ^ — 
The  latter  had  arranged  for  a  loan  from  plaintiff,  and,  as  a  part  oT^   ^^ 

the  money  to  be  loaned,  the  latter  was  to  pay  off  the  note  and  mort-     .. 

ga^e.  '  The  prmcipal  had  authorized  defendant  to  recei^^e  a  specified    _ 

^ufFras  due  on  the  note  and  mortgage,  and  on  receiving  it, to  deliver_a_- 
satTsfaction  piece  executed  by  the  principal.     The  sum  specified  was 

~pai3  to  him,  and  he  delivered  the  satisfaction.  "^The  mistake  claimed 
was  in  the  amount  due.  Burrows  testified  that  after  the  payment  "I 
went  out  and  saw  Sherin.  I  told  him  I  thought  they  had  made  a 
mistake.  They  had  figured  the  note  too  much.  He  said  he  had  got  /^,  ,*  ^^ 
to  go  to  the  train,  and  said,  if  there  was  anything  wrong,  my  son  [the 
principal]  would  make  it  right."  This  was  all  the  evidence  of  notice. 
Had  such  notice  been  given  by  the  plaintiff,  it  would  have  been  hardly  ^ 

~^fficTenL;__farit  wmild'ttbThave  apprised_ defendant  that  he  intended  ^ 

to  reclaim  whatever  might  have  been  overpaid.     But  Jt_was  by  one ^ 

who  had  iio^aulhority  in  the  matter.     According  to  the  arrangement 

"ISeUveen  plafntiff   and  Burrows,  the   former  could   charge  the   lattery  / 

with  only  what  was  actually  due  on  the  note  and  mortgage,  and  paid 
\iy  him.  In  what  was  overpaid,  plaintiff,  and  not  Burrows,  was  solely 
interested.  As  relates  to  notice  that  could  affect  the  rights  of  the 
parties,  the  finding  of  the  court  that  there  was  none  was  the  only 
finding  that,  on  the  evidence,  could  be  made. 

The  resi)ondcnt  points  out  various  rulings  on  the  trial  which  he 
claims  to  be  erroneous,  and  sufficient  to  justify  an  order  granting  a 
new  trial.  Thcv  have  no  bearing  on  the  matter  of  notice,  the  point 
as  to  which  jjlaintiff's  case  failed,  and  therefore  they  could  not  preju- 
dice him.    Ordei 


23  The  concurriiig  ojiiiiion  of  IUckiiison,  J.,  Is  onilttod. 

In  cases  like  the  alxivf  third  pfr-sniis  iiiiist  seek  tlifir  rciiu'tly  af,'aliist  tlio 
I»riii<ii)al,  (JiaimtT  v.  Ilalliawny,  17  .Mi<li.  .')(»<)  (l.S(i!»i,  cvccitt  wlicii  tlir  a^riit 
lin.s  iir)t  (haimrd  liis  r.ri_'iiial  position.  In  that  case  ho  may  be  sued  to  re 
eovt-r  hnc^  tlie  money  pair!  liim  iiy  mistake.  I'uucoust  v.  Diusuiore,  105  M^ 
471,  75  Atl.  4.'j,  l.'U  Am.  St.  ll«'l».  5S2  (I'JOU). 


\\\ 


4rt" 


/L  ( 


G80  EFFECTS   AND   CO.NSKQL  ENCKS   OF  THE    KEEATIUN  (i^Urt  3 

BULLER  V.  HARRISON." 

(Court   «>l'   Riiiu's  IUmk'Ii,   3777,  2  (\>\vp.  5G5.) 

Upon  shewing::  cause  why  a  new  trial  should  not  be  granted  in  this 
case,  Lord  Mansfield  read  his  report  as  follows: 

This  was  an  action  for  money  had  and  received,  brought  by  the 
plaintiff  against  the  defendant,  to  recover  back  a  sum  of  £2,100.  paid 
him  as  due  upon  a  policy  of  insurance,  as  agent  for  the  insured, 
Messrs.  Ludlow  and  Shaw,  resident  at  New  York.  This  sum  the 
plaintiff  had  paid,  thinking  the  loss  was  fair.  Notice  of  the  loss  was 
given  by  the  defendant  to  the  plaintiff  on  the  20th  of  April.  Part  of 
the  money  w^as  paid  at  that  time,  and  the  remainder  on  the  6th  of 
May  following;  on  which  day  the  defendant  passed  the  whole  sum 
in  his  account  with  Messrs.  Ludlow  and  Shaw,  and  gave  credit  to 
them  for  it  against  a  sum  of  £3,000.  in  which  they  stood  indebted  to 
him.  On  the  17th  of  May,  notice  was  given  by  the  plaintiff  to  the 
defendant  that  it  was  a  foul  loss.  At  this  time,  nothing  had  happened 
to  alter  the  situation  of  the  defendant,  or  to  make  it  different  from 
what  it  was  on  the  20th  of  April.  He  had  accepted  no  fresh  bills,  ad- 
vanced no  sum  of  money,  nor  given  any  new  credit  to  his  principals ; 
but  aft'airs  between  them  and  him  remained  precisely  in  the  same 
situation  as  on  the  20th  of  April.  The  question  at  the  trial  was, 
whether  this  action  could  be  maintained  against  the  de^^endant,  as 
agent  of  the  insured ;  which  depended  on  this ;  whether  me  defend- 
ant's having  placed  this  money  to  the  account  of  his  principals,  in 
the  manner  before  stated,  was  equivalent  to  a  payment  of  it  over. 

In  general  the  principle  of  law  is  clear;  that  if  money  be  mispaid 
to  an  agent  expressly  for  the  use  of  his  principal,  and  the  agent  has 
paid  it  over,  he  is  not  liable  in  an  action  by  the  person  who  mispaid 
it:  because  it  is  just,  that  one  man  should  not  be  a  loser  by  the  mis- 
take of  another;  and  the  person  who  made  the  mistake  is  not  without 
redress,  but  has  his  remedy  over  against  the  principal.  On  the  other 
hand  it  is  just,  that  as  the  agent  ought  not  to  lose,  he  should  not  be 
a  gainer  by  the  mistake.  And  therefore,  if  after  the  payment  so 
made  to  him,  and  before  he  has  paid  the  money  over  to  his  principal, 
the  person  corrects  the  mistake;  the  agent  cannot  afterwards  pay 
it  over  to  his  principal  without  making  himself  liable  to  the  real 
owner  for  the  amount.  But  the  present  case  turns  upon  this;  that 
the  agent  was  precisely  in  the  same  situation  at  the  time  the  mistake 
was  discovered,  as  before.  At  the  trial  I  inclined  to  think  the  plaintiff 
ought  to  recover;   but  did  not  direct  the  jury;    and  they  found  for 

24  Accord:  Smith  v.  Binder,  75  111.  492  (1874).  Contra:  Cabot  v.  Shaw,  148 
Mass.  459,  20  N.  K.  99  (18S9).  There  is  no  presumption  that  the  agent  has 
paid  the  money  over  to  the  principal.  He  must  prove  it.  Law  v.  Nunn,  3 
Ga.  90  (1S47).  He  must  .show  that  he  actually  parted  with  the  money,  or 
something  equivalent  thereto.  U.  S.  Nat.  Bank  v.  Nat.  Park  Bank,  59  Hun, 
495  13  N.  Y.  Supp.  411  (1891),  affirmed  129  N.  Y.  647,  29  N.  E.  1028  (1891). 


Ct.S)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  681 

the  defendant.  I  am  satisfied  I  mistook  in  leaving  it  open  to  the 
jury :  For  it  is  clearly  a  question  of  law,  not  a  matter  of  fact :  And 
in  conscience  the  defendant  is  not  entitled  to  retain  the  money.  There- 
fore I  should  have  left  it  to  the  jury  in  this  manner ;  if  you  are  satis- 
fied that  the  money  was  paid  by  mistake,  and  the  defendant's  situa- 
tion not  altered  by  any  new  circumstance  since,  but  that  every  thing 
remained  in  the  same  state  as  it  was  on  the  20th  of  April,  you  ought 
to  find  for  the  plaintiff. 

Mr.  Bearcroft  and  Mr.  Davenport,  who  shewed  cause,  insisted  that 
the  defendant  had  a  right  to  retain  the  money  in  question. 

Mr.  Wallace  and  Mr.  Dunning  were  in  support  of  the  rule;  but 
Lord  Mansfield,  thought  the  case  so  clear,  that  his  lordship  stopped 
Mr.  Dunning,  as  being  unnecessary  to  give  himself  any  trouble. 

Lord  Mansfield.  I  am  very  glad  this  motion  has  been  made: 
for  I  desire  nothing  so  much  as  that  all  questions  of  mercantile  law 
should  be  fully  settled  and  ascertained;  and  it  is  of  much  more  con- 
sequence that  they  should  be  so,  than  which  way  the  decision  is.  The 
jury  were  embarrassed  on  the  question  whether  this  was  a  payment 
over.  To  many  purposes,  it  would  be.  It  is  now  argued,  that  this 
is  not  a  mere  plak'ing  to  account,  but  a  making  rest.  If  it  were,  it 
would  not  vary  the  case  a  straw.  I  verily  believe  the  jury  were  en- 
tangled in  considering  it  as  a  payment  over.  There  is  no  imputation 
upon  a  man  who  trusts  to  a  misrepresentation  of  the  insured.  It  is 
greatly  to  his  honour ;  but  it  makes  it  of  consequence  to  him  to  know, 
how  far  his  remedy  goes  if  he  is  imposed  upon.  The  whole  question 
at  the  trial  was,  whether  the  defendant,  who  was  an  agent,  had  paid 
the  money  over.  Now,  the  law  is  clear,  that  if  an  agent  pay  over 
money  which  has  been  paid  to  him  by  mistake,  he  does  no  wrong; 
and  the  plaintiff  must  call  on  the  principal ;    And  in  the  case  of  INIuil- 

man  versus ,  where  it  appeared  that  the  money  was  paid  over, 

the  pbintiff  was  nonsuited.  But,  on  the  other  hand,  shall  a  man, 
though  innocent,  gain  by  a  mistake,  or  be  in  a  better  situation  than 
if  the  mistake  had  not  happened?  Certainly  not.  In  this  case,  there 
was  no  new  credit,  no  acceptance  of  new  bills,  no  fresh  goods  bought 
or  money  advanced.  In  short,  no  alteration  in  the  situation  which 
the  defendant  and  his  principals  stood  in  towards  each  other  on  the 
20th  of  April.  What  then  is  the  case?  The  defendant  has  trusted 
Ludlow  and  Co.  and  given  them  credit.  He  trafficks  to  the  country 
where  they  live,  and  has  agents  there  who  know  how  to  get  the  money 
back.  The  plaintiff  is  a  stranger  to  them  and  never  heard  of  their 
names.  Is  it  conscientious  then,  that  the  defendant  should  keep  money 
which  he  has  got  by  their  misrepresentation,  and  should  say,  though 
there  is  no  alteration  in  my  account  with  my  principal,  this  is  a  hit, 
I  have  got  the  money  and  I  will  keep  it?  If  there  had  been  any  new 
credit  given,  it  would  have  been  proper  to  have  left  it  to  the  jury  to 
say,  whether  any  prejudice  ha«l  hajjpencd  to  the  defendant  by  means 
of  this  payment:     Bui  here  nv  prejudice  at  all  is  proved,  and  none 


7 

I 

9 


682  EKKi'.rTs  AM>  c'oNsixjii:.\('i:s  ok  tiiI':  kim-ation        (I'art  3 

i^  to  be  inferred.  Under  tliese  eireninslanees  I  think  (and  Mr.  Jus- 
tice Aston  willi  whom  I  have  talked  tho  matter  over  is  of  the  same 
opinion)  that  tlie  dcfentkint  has  no  defence  in  point  of  law,  and  in 
point  of  eiiuity  and  conscience  he  ought  not  to  retain  the  money  in 
question. 

Mr.  Justice  W'lijjcs  and  Mr.  Justice  AsiiiivusT  were  of  the  same 
opinion. 

PiiK  Curiam,     Rule  lor  a  new  trial  absolute. 


MOWATT  V.  McLELAN.=» 

(Supreme  Court  of  Judicature  of  New   York,  1S2.S.     1   Weiul.  173.) 

Savagiv,  C.  J.  This  was  an  action  to  rtcover  back  money  paid 
by  mistake.  The  defendant,  as  attorney  for  Mrs.  Charity  Wright,j__^ 
brought  three  actions  of  dower.  The  defendant  in  those  actions 
vouched  to  warranty  the  ancestor  of  the  Mowatts.  the  plaimiiT^.  Thr 
suits  were  compromised  by  the  payment  of  $1,000  to  the  defciuhuit, 
as  the  attorney  of  Mrs.  Wright;  on  the  receipt  of  which,  Mrs.  Wright 
executed  a  release  of  her  dower,  and  her  children  released  their  in- 
terest, and  the  suits  were  withdrawn.  The  defendant  paid  over  to  bis 
client's  orders  $800,  and  retained  $200  for  His 'costs  ahcl  counsel  fees, 
which  is  found  to  be  a  moderate  compensation.  Upon  making  this 
payment  and  settlement,  the  defendant  took  a  receipt  in  full.  Soon 
after  the  compromise,  a  conveyance  was  found  from  Wright  and  wife 
to  Col.  Burr,  executed  about  thirty  years  previous.  The  money  was 
paid  by  the  plaintiffs  the  24th  November,  1821,  and  this  suit  brought 
in  1827,  to  recover  from  the  defendant  the  $200  retained  by  him  for 
his  fees. 

These  facts  are  found  by  a  special  verdict  in  the  court  of  common 
pleas  for  the  city  of  New  York,  on  which  that  court  gave  judgment 
for  the  defendant.  f 

Two  questions  arise  in  this  case:  1.  Whether  Mrs.  Wright  is  lial)le 
to  refund  the  sum  of  $1000  thus  received  by  her?  and  if  sof^2.  Is  the 
defendant  liable  to  refund  the  $200  retained  by  him  for  his  costs? 
As  the  first  question  is  one  upon  which  Mrs.  Wright  has  not  been 
heard,  and  as  that  question,  we  are  informed  by  counsel,  will  be  dis- 
cussed in  a  suit  now  pending  against  Mrs.  Wright,  I  shall  consider 
first  the  latter  question,  assuming  for  the  present  argument  the  lia- 
bility of  Mrs.  Wright.  In  Duller  v.  Harrison,  1  Cowper,  566,  Lord 
Mansfield  says:  [For  Lord  Mansfield's  statement  of  the  law,  see 
ante,  p.  681.]  •/X'^ 


25  Accord:  Holland  v.  Russell,  1  Best  &  S.  4^101  E.  C.  L.  424  (1861). 
Payment  to  the  jtrinelpal  relieves  the  agent  of  nahHity  po  the  third  person 
even  thoutih  afterward  the  principal  returns  the  money  to  the  agent  in  set* 
tlement  for  his  services.     Bogart  v.  Crosby,  80  Cal.  195,  22  Pac.  84  (1889). 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIUD    PERSON  0S3 

The  case  of  Edwards  v.  Hodding,  5  Taunt.  815,  was  an  action 
against  the  defendant  as  agent  and  auctioneer  for  the  deposit  made 
by  the  plaintiflf,  as  purchaser  of  a  freehold  estate  at  auction.  The  de- 
fendant had  paid  over  the  deposit  after  notice  that  the  purchaser  was 
dissatisfied  with  the  title,  and  therefore  the  payment  over  did  not  pro- 
tect him.  In  the  case  of  Cox  v.  Prentice,  3  ]\Iaule  &  Sel.  345,  the 
defendant,  as  agent  of  his  correspondent  at  Gibraltar,  had  sold  the 
plaintiffs  a  bar  of  silver,  for  which  they  paid  more  than  the  value, 
from  the  mistake  of  the  assay-master.  Upon  discovering  the  mistake, 
the  plaintiff's  applied  to  the  defendant  for  a  return  of  the  money,  of- 
fering to  return  the  silver.  The  defendant  refused,  on  the  ground 
that  he  had  forwarded  his  account  to  his  correspondent,  in  which  he 
had  credited  him  with  the  full  sum;  it  appeared,  however,  that  the 
account  was  still  unsettled  between  them.  Lord  Ellenborough  states 
the  principle  of  the  agent's  liability  where  there  is  no  change  of  cir- 
cumstances, and  says,  here  it  is  admitted  that  no  money  has  been  paid 
over  by  the  defendant  to  his  principal,  nor  has  there  been  any  other 
thing  done  by  him  to  create  a  change  of  circumstances.  He  then  ar- 
gues the  case  upon  the  liability  of  the  principal.  Bayley,  justice, 
speaking  of  the  case  of  Duller  v.  Harrison,  says,  "That  case  decides, 
that  if  things  remain  in  the  same  state  as  they  did  here,  the  action 
will  lie  against  the  agent."  The  same  point  has  been  so  decided  in 
this  court.  Hearsey  v.  Pruyn,  7  Johns.  182,  and  7  Cowen,  460,  La 
Farge  v.  Kneeland.  In  the  latter  case.  Kneeland  had  received  money 
for  Braham  and  Atwood,  which  the  plaintiff  was  entitled  to  recover 
from  them ;  but  the  defendant  had  passed  it  to  the  credit  of  his  prin- 
cipals, and  that  credit  was  passed  to  the  credit  of  another  account. 
This  we  considered  equivalent  to  a  payment.  It  closed  the  account 
between  the  agent  and  his  principals,  and  therefore  we  held  the  agent 
was  discharged.  In  this  respect,  that  case  differed  from  the  cases  of 
Buller  V.  Harrison  and  Cox  v.  Prentice.  In  both  these  cases  the  ac- 
count remained  oi)en ;  no  change  of  circumstances  had  taken  place; 
an  erroneous  credit  had  been  given,  wiiich  might  be  balanced  by  a 
corresponding  charge  on  the  debit  side  of  the  account ;  no  settlement 
had  taken  place,  nor  any  closing  of  the  accounts  between  the  parties. 

In  the  case  now  under  con_sideralion^_the  money  was  honestly  and 
fairly  received  byTfTcTrefendant  as  agent  for  his  cli^nj:,  wTiqJ^]wc  "ow 
assume,  ^ught  to  pay  it  back.  The  defendant  disposed  of  the  whoIe~~ 
of  it  aci'-nling^Jb  tlie  directions  ot  his~cTient,  paid  her  $500,  paid 
^?i^)  to  one  Elias  Baldwin,  retained  $200  to  himself,  and  finrilly  sv\- 
t!(d  his  accounts  and  concerns  with  his  principal,  by  taking  i  n  ■  ]  ' 
in  full.  The  $200  never  passed  out  of  his  hands;  and  it  sctnis  to 
be  conceded,  that  if  he  had  paid  the  whole  sum  to  ^Trs.  Wriglit,  and 
slieliaJT^iifriiinnia'ck  $200  in  other  money,  this  action  could  not 
be  sustained.  And  is  it  possible  that  the  rights  of  parties  in  this  court 
depend  upon  idle  and  unmeaning  ceremonies?  If  the  transaction  was 
what  it  purports,  it  was  in  reality  a  payment  by^IllC  MUfUlldnnt  trr  his 


GS4  EFFECTS   AND    CONSKQLKNCKS    OF  TllK    IJELATION  (i'art   3 

client,  of  the  inoney  in  Jiis  hands,  which  he  had  received  as  her  agent, 
and  payment  by  her  to  her  attorney  of  his  costs.  'Tjvisclosed  the  ac-' 
count  i)et\yceiT  tlicni."  It  is  not  to  be  correctccF  by  a  charge  in  an 
open  account.  There  Is  no  foreign  correspondent  either  in  America 
or  at  Gibrahar,  as  in  the  cases  above  cited,  of  Buller  v.  Harrison  and 
Cox  V.  Prentice.  If  the  phiintift's  recover  here,  the  defendant  must 
resort  to  his  action  to  recover  his  money.  This  the  plaintiffs  can  also 
_do^  and  indeed  have  done.  And  here,  too,  it  is  alleged,  if  the  defend- 
ant should  be  driven  to  his  action  against  his  client,  his  remedy  is 
gone  by  lapse  of  time.  The  plaintiffs  do  not  sue  till  the  statute  of 
limitations  is  closing  upon  them ;  and  already  more  than  six  years 
have  elapsed  since  the  settlement  between  the  defendant  and  his  client. 
I  am  of  opinion  that  the  defendant  is  not  liable,  and  that  the  judg- 
ment of  the  court  below  be  affirmed. 


BURROUGH  V.  SKINNER.'^' 
(Court  of  King's  Bench,  1770.     5  Burrow,  2639.) 

The  defendant  was  an  auctioneer;  and,  in  that  character,  had  sold 
to  the  plaintiff  an  interest  in  land,  for  which  the  plaintiff  had  paid  him 
a  deposit  of  f50.  but,  upon  an  objection  to  the  title,  and  the  want  of 
disclosure  of  certain  circumstances  which  ought  to  have  been  disclosed 
at  the  time  of  the  bidding,  the  plaintiff  (the  purchaser)  declined  going 
on  with  the  contract :  and,  in  the  opinion  of  the  court,  she  had  suffi- 
cient reason  for  so  doing.  She  therefore  required  the  auctioneer  to 
pay  her  back  his  deposit  of  £50.  The  auctioneer  refused.  Whereupon, 
the  bidder  brought  this  action  against  him,  to  recover  it.  The  auc- 
tioneer paid  £8.  into  court.  The  cause  was  tried :  and  the  plaintiff  ob- 
tained a  verdict.  The  auctioneer  moved  for  a  new  trial;  and  had  a 
rule  to  shew  cause. 

But,  upon  shewing  cause, 

The  Court  were  clear,  that  the  action  lay  against  the  auctioneer. 
The  money  does  not  appear  to  have  been  paid  over  by  him  to  his  prin- 
cipal. But  if  it  had  been  so,  yet  the  objection  appears  to  have  been 
made  before  it  either  was  or  ought  to  have  been  so  paid  over.  He 
was  a  stake-holder,  a  mere  depositary  of  the  £50.  and  ought  not  to 
have  parted  with  it,  till  such  time  as  the  sale  should  be  finished  and 
completed,  and  it  should  appear  in  the  event  to  whom  it  properly  be- 
longed. 

They  also  thought  that  the  auctioneer  had  acknowledged  himself  to 
be  liable  to  the  action,  by  paying  money  into  court. 

They  therefore  unanimously  discharged  the  rule  for  shewing  cause 
why  there  should  not  be  a  new  trial. 

26  Approved  In  Read  v.  Riddle,  48  N.  J.  Law,  3.59,  7  Atl.  487  (1886);  Mar- 
tin V.  Allen,  125  Mo.  App.  G3G,  103  S.  W.  138  (1907). 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  685 

y 

SADLER  V.  EVANS,  or  LADY  WINDSOR'S  CASE." 

(Court  of  King's  Bench,   1766.     4  Burrow,  1984.) 
Amotion  having  been  made,  on  behalf  of  the  plaintifiF,  to  set  aside  a 

noivisuit:^ — 

On  the  last  day  of  Easter  Term  last  (1766),  Mr.  Justice  Aston  re- 
ported from  jNIr.  Baron  Perrot  who  tried  the  cause,  That  this  was  an 
action  for  money  had  and  received  to  the  plaintiff's  use;  and  that  the      ^ 

""counsel  for  the  plaintiflF,  who  opened  the  cause  at  the  trial,  stated  the     ,. 
acHonTo  be  brought  with  intention  to  try  the  right  of  Lady  Windsor  .. 
to  a  quitrent  of  one  shilling,  and  to  another  sum  of  six-pence  for  mises.^ 

"They  stated,  that  the  defendant  was  her  receiver;  and  demanded  them 
oTthe  plaintiff,  as  such.  That  the  plaintiff'  paid  the  Is.  6d.  to  the  de- 
f endant ;  and  took  a  receipt  for  them,  by  which,  the  defendant  ac- 

•— knowledged  to  have  received  them  for  the  use  of  Lady  Windsor. 
That,  in  fact,  these  sums  were  not  due  to  Lady  Windsor ;  and  that  they  , 
were  therefore  received  without  any  good  consideration ;  and  conse- 
quently,  that  this  action  well  lay  against  the  defendant  into  whose  hands 
they  were  paid.  And  they  were  prepared  with,  and  would  have  called 
evidence  to  the  right. 

But  the  judge  (Air.  Baron  Perrot)  was  of  opinion,  that  under  these 
circumstances,  the  action  did  not  lie  against  the  defendant.  That  noth- 
ing could  be  more  absurd  than  to  make  the  collector  or  receiver  of  an- 
other person  liable  to  an  action  for  every  payment  that  was  voluntarily 
made  to  him  ;  and  to  leave  him  to  be  defended,  or  deserted,  by  his  prin- 
cipal, as  such  principal  should  think  fit.  That  it  was  (in  his  opinion)  >■ 
yet  still  more  absurd,  as  he  did  not  see  how  a  verdict  given  in  this 
cause  could  ever  be  received  in  evidence  for  or  against  the  right  which 
might  in  a  future  cause  come  to  be  tried.  That  if  this  action  lay  in 
such  a  case  as  this,  it  would  lie  against  every  attorney  who,  by  his 
client's  direction,  should  demand  and  receive  money  as  due  to  his 
client,  which  the  supposed  debtor  might  voluntarily  pay,  and  after- 
wards think  fit  to  dispute.  He  thought  that  if  the  one  shilling  and 
six-pence  had  been  paid  over  to  Lady  Windsor,  the  plaintiff  might 

27  Approved  liy  Ivord  Koiiyoii,  ('.  J.,  in  (iriM-nway  v.  Ilnrd,  4  T.  R.  TmW  (ITt^Jj. 
In  su'h  cases  the  moment  tlie  money  Is  in  (he  agent'.s  hands  it  is  virtn.illy  in 
the  princiital's  hands,  ("olcrldfte,  .T..  in  I'.amfonl  v.  Siiuttieworlh,  11  .\d.  «fc 
VA.  Ol'O,  .'W  R.  C.  L.  4SS  (1S40).  'J'Imtc  is  no  privity  iictwccn  the  agent  and 
the  tiiird  jieison,  nor  any  liduejary  relation.  Iliiis  v.  Goullon.  |1S0:'>1  1  Q.  It. 
350.  Tlie  right  of  tlie  firineipai  cannot  he  tried  in  an  action  against  the 
agent.  Sliiiilierd  v.  Underwood,  T..'")  111.  47r»  (ISTO).  Th(>  cause  ol'  action,  it' 
any,  Is  against  the  princijial.  Haiiey  v.  Cornell,  <;0  Mich.  107,  .T5  N.  W.  .W 
(1SH7).  The  contract  is  that  of  the  [irlncipal.  and  not  of  the  agent.  IIulTman 
V.  Newnnn.  r..'»  Neb.  71.^.  76  N.  W.  400  (IHOS). 

See  especially  the  leading  cn.se  of  Colvln  v.  Ilolhrook,  2  N.  Y.  I'JC  (1847), 
approved  and  followed  in  l<'i.sher  v.  Meeker,  US  .\iii>.  Div.  901,  KW  N.  Y. 
Supj).  'J<H   (l!t07),  and  Costigan   v.   Newl.in<I,  1'2  Harli.    l.'.O  (IS.VJ). 

The  nde  does  not  api>ly  where  the  principal  has  no  right  to  tlie  money,  and 
could  not  recover  it  from  the  agent.  Winniugham  v.  Fuucher,  Wl  Mo.  App- 
458  (1893). 


^^Ciyf^J'^.yL^ 


^..  J 


Ia  ()8G  KFKKyfTS   AND    CO>i*10QUKN('I':S    OF   TllK    KKLATION  (Part    W 

easily  jirovc  it:   and  ifu  was  not  paid  over,  yet  the  payment  to  her  re- 
i.ei\er  was  payment  to  her;  ami  therefore  the  action  ought  to  have 
been  brought  against  her. 
.  ^^^'^'^      TiiK  CC)rKT,  on  Thurstlay   12lli  June  last,   \vere  unaninu)us,  that 

>-x^  Ui)on  the  facts  stated  in  the  report,  the  plaintiff  ought  uol  to  recover 

against  the  defendant,  in  this  action;  and  that  the  actH»ii  Mught  to  have 
been  brought  against  Lady  \\'indsor  herself,  and  not  agamsi  |n  i-  ag^enjj 
and  there_fore  they  discharged  the  rule  for  setting  a-idc  lln  imii  suit. 
They  thought,  tlig. principles  upon  wliich..  act  ions  fni-  monc}  had  and 
received^  to  the  plaixitifl's  use  .are.  Founded^  did  not  api)ly  to  the  cir- 
cumstances  of  the  present  case..  It  is  a  liberal  action  foiuidcd  ujpiiii 
large  principles  of  ecjuity,  where  the  defendant  can  not  conscicntinuslv 
hold, iJic  money.     The  defence  is  any  equity  that  will  rebut  the  action^ 

?        "  This  money  was  paid  to  the  known  agent  of  Lady  W.     J  Ic  is  liable 

to  her  for  it;  whether  he  has  actually  paid  it  over  to  her,  or  not  :  lie 
received  it  for  her.  And  Lord  Mansfield  expressed  a  dissent  to  the 
case  of  Jacob  versus  Allen,  in  1  Salk.  27,  and  his  approbation  of  Pond 
versus  L^nderwood,  in  2  Ld.  Raym.  1210,  1211,  which  is  contrary  to  it. 
^  He  said,  he  kept  clear  of  all  payments  to  third  persons,  but  where  'tis 

j^  '  to  a  known  agent :  in  which  case,  the  action  ought  to  be  broup-hf  against 

the  principal,  unless  in  special  cases,  (as  under  notice,  or  mala  fi(lej 
But  they  were  unanimous,  both  upon  principles  and  authorities, .  iiial; 
where  a  judge  at  nisi  prius  non-suits  the  plaintiff,  and  is  mislaken; 
the  Court,  upon  motion,  may  set  aside  the  non-suit.  " 

Rule  discharged. 


MOORE  V.  SHIELDS. 

(Supreme  Court  of  Judicature  of  Indiana,  1889.     121  Ind.  2G7,  23  N.  E.  89.) 

Suit  to  recover  a  sum  of  money  paid  to  defendant  for  a  township 
warrant,  or  note,  issued  in  violation  of  his  official  duty,  and  without 
any  consideration,  by  a  township  trustee.    Judgment  for  defendant. 

Mitchell,  C.  J.^®  *  *  *  There  was  evidence  tending  to  ]^rove 
that  the  appellants  were  paid  a  comparatively  large  sum  for  negotiat- 
ing the  township  warrant  in  question,  which  was  absolutely  worthless. 
They  urged  the  plaintiff  below  to  purchase,  and  recommended  the 
paper  as  good,  wdthin  their  knowledge.  There  was  evidence  tending 
to  show  that  they  knew  the  paper  was  irregularly  issued,  without  any 
consideration  whatever ;  in  short,  that  it  was  fraudulently  issued.  Un- 
der these  circumstances  they  received  the  plaintiff's  money;  the  latter 
paying  it  over  to  them  in  reliance  upon  the  declaration  made  by  them, 
that  they  had  purchased  a  number  of  similar  warrants  as  an  invest- 
ment, and  that  they  regarded  them  as  good  as  county  or  government 
bonds.  It  is  said  that  the  appellants  were  merely  agents  or  brokers  to 
sell  the  warrant ;  and  that  they  are  hence  not  liable,  after  having  paid 

2  8  Part  of  tlie  opinion   is  omitted. 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  687 

over  the  money  to  their  principal.  The  conclusion  does  not  follow. 
"Even  an  auctioneer  or  broker  who  sells  property  for  one  who  has 
no  title,  and  pays  over  to  his  principal  the  proceeds,  with  no  knowledge 
of  the  defect  of  title  or  want  of  authority,  is  held  liable  for  its  con- 
version to  the  real  owner."  Hills  v.  Snell,  104  Mass.  173 ;  Alexander 
V.  Swackhamer,  105  Ind.  81-86,  4  N.  E.  433,  5  X.  E.  908,  55  Am. 
Rep.  180,  and  cases  cited. 

Much  more  is  a  broker  liable  who  sells  and  obtains  money  for  worth- 
less paper,  which  he  knows  has  been  fraudulently  issued,  in  violation 
of  law,  even  though  he  may  have  paid  the  money  over  to  his  principal. 
Where  one  person  receives  the  money  of  another  under  such  circum- 
stances, that,  in  equity, — in  good  conscience, — he  ought  not  to  retain  it, 
or  otherwise  dispose  of  it,  except  to  return  it  to  the  person  from  whom 
it  was  received,  an  action  for  money  had  and  received  will  lie  to  re- 
cover it  back.    ]\IcFadden  v.  Wilson.  96  Ind.  253. 

In  an  action  for  money  had  and  received,  there  need  be  no  privity 
of  contract  proved,  other  than  such  as  arises  out  of  the  fact  that  the  de- 
fendant has  received  the  plaintiff's  money  under  circumstances  which 
make  it  against  conscience  that  he  should  retain  it.  Walker  v.  Conant, 
65  Mich.  194,  31  N.  W.  786;  People  v.  Speir,  77  N.  Y.  144;  3  Amer. 
&  Eng.  Cyclop.  Law.  860.  "If  one  man  has  obtained  money  from  an- 
other through  the  medium  of  oppression,  imposition,  or  deceit,  such 
money  is,  in  contemplation  of  law,  received  for  the  use  of  the  injured 
party."  In  such  a  case  the  law  implies  a  promise  on  the  part  of  him 
who  is  in  the  wrong  to  return  the  money  to  the  lawful  owner.  Mc- 
Queen v.  Bank,  2  Ind.  413;  4  Wait,  Act.  &  Def.  469-171.^'^ 

The  application  of  the  principles  above  stated  justify  the  judgment. 
We  have  found  no  error.    The  judgment  is  affirmed,  with  costs. 

20  If  any  person  gets  money  into  his  liinuls  illegally  he  cannot  disoliarge 
himself  by  paying  it  over  to  another.  Tnwnson  v.  Wilson.  1  Canipl".  •">!>'o 
(180S1.  per  Ld.  Kllenliorough  ;  Tjirkin  v.  Ilapgood.  HC.  Vt.  r.!»7  (1SS4);  Wallis 
V.  Slielly  {V.  r.)  ;{(>  Fed.  747  (1.SS71 ;  lioioliino  v.  Cook.  (i7  X.  J.  Law.  4(17.  51 
Atl.  4S7  (lOOli);  Frye  v.  Lockwood,  4  Cow.  4n4  (ISlin).  in  which  it  ajipeared 
that  the  principal  was  really  conducting  the  defense,  thongh  the  action  was 
against  the  agent.  See.  also.  O'Conner  v.  Clopton.  (10  Mis.s.  349  (ISS'J).  in 
which  the  agent  was  re<|nired,  to  pay  hack   nsurious  interest. 

The  agent  is  also  liable  when  he  receives  the  money  without  aniliority.  ami 
the  prin<ipal  refuses  to  enter  into  the  contract.  Sinnnonds  v.  Long,  so  Kmu. 
?."i.  101  ra<-.  1070,  L'.'!  li.  U.  A.  (N.  S.»  ."):!  (lOOOt;  V.  S.  v.  I'iuover  (D.  C.I  :! 
Fed.  .".0."i  (issoi.  in  whi<li  llu'  agent  received  money  in  good  faith,  hut  on  a 
forgeil  indorsement.  When  an  act  of  bankruptcy  has  been  conunitted  by  the 
principal  before  the  agent  pays  over  money  to  him  the  agent  will  be  liable 
for  the  money.  K.\  i)arte  Fdw.irds,  1.'!  (^.  M.  I  >.  747  (1SS41.  Fven  if  the  agent 
acts  in  good  faith,  he  will  be  liable  if  his  principal  had  no  right  to  the  money. 
as  where  tlw  iirincipal  inteiid<<l  to  obtain  re|ircsenla(ion  to  her  deceased  hus- 
band, and  the  agent  received  several  debts  and  paid  them  over  to  her.  When 
the  widow  failed  of  appointment  as  Icgiii  lepresenlalive.  the  agent  w;is  held 
liable  for  the  amounts.  Sliarland  v.  .Miblou,  ">  Hiire,  ICO  (IMC.).  In  these 
ca.ses  the  third  i>erson  may  ele<t  wlildi  to  hold,  the  i)rin(iiiiil  or  tlm  agent, 
but  an  eh'ftion  to  hold  one  is  inconsist4'nt  with  an  Intent  to  hold  the  other. 
The  remedies  are  not  concurrent.  Kufaulu  (Irocery  Co.  v.  Mo.  Nat.  r.Jink,  lis 
Ala.    40S.   LM    South.   ."ISO  (IsyS). 


688  JiFFKCTS  AND   CONSEQUENCES   OF  TUE    UELATION  (Part  3 


n.  OWKN  .^-  CO.  V.  CRONIC 

(Queen's  Bonch  Division  of  (ho  liisli  Court  of  Justice.     [1805]  1  Q.  B.  Div. 

2t)5.) 

Judd  &  Co.,  licinc:  financially  embarrassed,  pnt  their  business  into 
the  hands  of  trustees,  by  whom  Cronk  was  appointed  receiver.  Owen 
&  Co.  had  printing  done  by  Judd  &  Co.,  and  were  presented  by  the 
manager  with  a  bill  which  they  claimed  to  be  extortionate,  but  he  re- 
fused to  return  to  them  the  special  blocks  and  type  furnished  by  them 
until  they  paid.  Under  this  "duress  of  goods,"  of  which  Cronk  had 
no  knowledge,  they  gave  the  manager  a  check,  which  Cronk  indorsed 
and  paid  into  his  receivership  account.  Action  to  recover  the  excess 
charges. 

Lopes,  L.  J.  The  case  is  not  a  difficult  one  to  decide  when  once 
the  facts  are  ascertained.  It  is  said  that  the  defendant  was  a  receiver, 
not  a  mere  servant.  Upon  the  facts,  it  appears  to  me  that  he  was  an 
agent,  not  a  principal,  and  in  my  opinion  the  learned  judge  has  come  to 
a  right  conclusion.  The  next  question  is,  Had  the  defendant  any 
knowledge  that  the  money  had  been  improperly  obtained  from  the 
plaintiflfs?  In  my  opinion,  there  is  no  evidence  that,  at  the  time  when 
the  check  was  paid  to  Macintosh,  the  defendant  knew  anything  of  the 
circumstances  under  which  the  payment  was  made.  The  next  ques- 
tion is,  Did  the  defendant  pay  over  the  cheque  to  his  principals  before 
he  had  any  notice  that  it  had  been  wrongly  obtained  from  the  plain- 
tiffs ?  The  learned  judge  has  come  to  the  conclusion — and  I  think  right- 
ly— that  he  did.  I  think  the  law  is  clearly  settled  that  if  an  agent  has 
received  for  his  principal  money  the  payment  of  which  has  been  wrong- 
fully obtained,  and  he  pays  it  over  to  the  principal  before  he  has  any 
notice  of  the  wrong,  he  is  protected  from  any  liability  to  the  person 
who  paid  the  money.  But  if,  on  the  other  hand,  the  agent,  with  notice 
of  the  wrong,  pays  the  money  to  his  principal,  he  v^ill  nevertheless  be 
personally  liable  to  the  person  who  made  the  payment.  Here  the  de- 
fendant, being  an  agent,  paid  the  cheque  to  the  account  of  his  prin- 
cipals before  he  had  had  any  notice  that  it  had  been  improperly  ob- 
tained from  the  plaintiffs.  He  has  complied  with  the  requirements 
of  the  law,  and,  therefore,  the  action  cannot  be  maintained  against  him, 
and  the  decision  of  the  learned  judge  was  right.^" 

Appeal  dismissed. 

30  The  opinions  of  Esher.  M.  R.,  and  Rigby,  L.  J.,  are  omitted.  Hauenstein 
V.  Ruh,  7.3  N.  J.  Law,  98,  62  Atl.  184  (190.j) ;  McDonald  v.  Napier,  14  Ga.  89 
(IS.'j.'ii,  in  which  the  agent  was  paid  a  judgment  to  save  the  third  person  from 
a  levy  in  execution,  and  the  judgment  was  afterward  set  aside.  The  case 
contains  a  discriminating  discussion  of  what  will  and  what  will  not  protect 
the  agent. 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  CS9 


WILLIA^IS  V.  EVERETT. 

(Court  of  the  King's  Bench,  1811.     14  East.  5R2.) 


jX 


Lord  EllEnborough,  C.  J.,^^  delivered  the  judgment  of  the  Court. 
This  was  a  case  argued  in  this  court,  in  the  last  Hilary  and  Easter 
terms,  on  a  motion  to  set  aside  a  nonsuit,  which  took  place  at  a  trial 
before  me  at  the  sittings  at  Guildhall  after  last  Michaelmas  term.    Xhe. 


action  was  for  money  had  and  received,  brought  by  the  plaintiff  to  re- 
— TOT^T  £300.,  being  part  of  the  amount  of  a  bill  of  £1126.  2s.,  remitted 
by"  one  James  Kelly  from  the  Cape  of  Good  Hope  to  the  defendant's  ^ 
house,  m  a  letter  dated  Cape  Town,  8th  July  1809;  in  which  Kelly  , 
says,  "I  remit  you  by  the  W'arley  ill26.  2s.,  which  I  particularly  re- 
quest you  will  order  to  be  paid  to  the  following  persons,  who  will  pro- 
duce their  letters  of  advice  from  me  on  the  subject,"  etc.  Amongst 
the  persons,  he  names  the  plaintiff  Williams  (wine  merchant,  Grace- 
church  street),  for  i300.  And  he  afterwards  made  another  remittance 
for  £500.  on  the  same  terms.  And  then  he  adds :  "I  desire  the 
amounts  paid  each  person  to  be  put  on  the  back  of  their  respective 
bills,"  etc.  "and  that  every  bill  paid  off  be  cancelled."  William?  by 
his  attorney,  long  before  the  bills  became  due,  gave  the  def en- lint  "" 
Everett  notice  6T  a  letter  he  had  received  from  Kelly,  ordering  his  debt 
of  £30Q.  to  be  paid  out  of  that  remittance,  and  offered  him  an  indemni- 
ty  ot  a  Banking  house  if  he  would  hand  over  the  bill  to  him ;  but  Everett 
refu-sed  to  Indorse  the  bill  away,  or  to  act  upon  the  letter;  admitting. 
^"tT7:7\Aever,  that  he  had  received  the  lettej  directing  the  application  of 
the  money  in  the  manner  already  stated.  The  question  at  the  trial 
was,  whether  the  plaintiff  was  entitled  to  receive  from  the  defendants  /^ 

the  amount  of  his  demand  on  Kelly  for  £300.  out  of  the  bill  for  £1126.         * 
2s.  which  was  admitted  to  have  been  received  by  the  defendants  when 
it  became  due.     *     *     *     The  question  which  has  been  argued  before 
us  is,  whether  the  defendants,  by  receiving  this  bill,  did  not  accede  to 
the  purposes  for  which  it  was  professedly  remitted  to  them  by  Kelly, 
and  bind  themselves  so  to  apply  it ;  and  whether,  therefore,  the  amount 
of  such  bill  paid  to  them  when  flue  difl  not  instantly  become  by  opera- 
tion of  law  money  had  and  received  to  the  use  of  the  several  persons 
mentioned  in  Kelly's  letter  as  the  creditors  in  satisfaction  of  whose 
bills  it  was  to  be  applied,  and  of  course,  as  to  £300.  of  it,  money  had 
and  received  to  the  use  of  the  plaintiff,   jt  will  be  observed,  that  there 
is  no  assent  on  the  part  of  the  defendants  to  hold  this  money  for  the__, 
puri)0sc.";  mcnlicjned  in  the  letter ;  but,  on  the  contrary,  an  express  re-; 
fusal  to  the  creditor  so  to  clo.    If,  in  order  to  constitute  a  privity  bg-,, 
tween  flie  plaiiuiff  and  defeniSants  as  to  the  subject  of  this  demand,  an 

•  1  r.'irt   of  the  ripiiiloii   Is  omitted. 
Goi)i).I'i{.&  A. 


Q 


Y*'"^ 


090  EFFECTS   AND   CONSKQITENCES   OF  THE    UELATION  (Part    3 

assent  express  or  implied  be  necessary,  the  ,as,sent  ean_i.ii  iliis-xase  be 
"Oiily  an  implied  one,  and  that  too  imi)lied  against  the  express  dissent. 
of  the  parties  to  be  eharged.  V>y  the  act  of  receivnig  the  bill,  the  de- 
fendants agree  to  hold  it  till  paid,  and  its  contents,  when  paid,  for  the 
use  of  the  remitter.  It  is  entire  to  the  remitter  to  give,  and  coiuiter- 
mand,  his  own  directions  respecting  the  bill  as  often  as  he  pleases,  and 
the  persons  to  whom  the  bill  is  remitted  may  still  hold  the  bill  till  re- 
ceived, and  its  amount  when  received,  for  the  use  of  the  remitter  him- 
self, until  by  some  engagement  entered  into  by  themselves  with  the 
person  who  is  the  object  of  the  remittance,  they  have  precluded  them- 
selves from  so  doing,  and  have  appropriated  the  remittance  to  the  use 
of  such  person.  After  such  a  circumstance,  they  cannot  retract  tlie. 
consent  they  may  have  once  given,  but  are  bound  to  IkiI  1  it  for  the 
"use  of  the  appointee.  If  it  be  rnoney  had_^nd  rccejved  ioi^thc  use 
of  the  plaintiff  under  the  orders  which  accompanied  the  remittance^ 
it  occurs  as  fit  to  be  asked,  -iCffen' did  it  become_so7_~T't  could  not 
be  so  before  the  money  was  received  on  the  bill  becoming  due :  and 
at  that  instant,  suppose  the  defendants  had  been  robbed  of  the  cash 
or  notes  in  which  the  bill  in  question  had  been  paid,  or  they  had 
been  burnt  or  lost  by  accident,  who  would  have  borne  the  loss  thus 
occasioned?  Surely  the  remitter  Kelly,  and  not  the  plaintiff  and  his 
other  creditors,  in  whose  favour  he  had  directed  the  application  of  the 
money  according  to  their  several  proportions  to  be  made.  This  ap- 
pears to  us  to  decide  the  question :  for  in  all  cases  of  specific  property 
lost  in  the  hands  of  an  agent,  where  the  agent  is  not  himself  responsible 
for  the  cause  of  the  loss,  the  liability  to  bear  the  loss  is  the  test  and 
consequence  of  being  the  proprietor,  as  the  principal  of  such  agent. 
The  case  of  De  Bernales  v.  Fuller  and  Co.,  which  has  been  urged  in 
argument  on  the  part  of  the  plaintiff,  is  clearly  distinguishable  from 
the  present  by  this  circumstance,  that  the  defendants  in  that  case,  i.  e. 
Fuller  and  Co.,  had  antecedently  received  the  bill,  which  was  to  be 
paid  at  their  house,  from  Newnham  and  Co.,  the  bankers  of  the  plain- 
tiff De  Bernales,  the  holder,  for  the  very  purpose  of  receiving  payment 
for  them,  the  Newnhams,  of  such  bill :  and  having  taken  the  bill  for 
this  purpose,  the  Court  thought  that  Fuller  and  Co.  could  not  by  them- 
selves or  their  clerk  renounce  this  purpose,  but  must  apply  the  money, 
brought  by  Fuller's  clerk  specifically  for  the  discharge  of  that  bill  then 
lying  at  their  house,  to  that  very  purpose  and  no  other;  and  that  they 
were  in  effect  to  be  regarded  in  that  case  as  the  plaintiff  De  Bernales' 
agents,  through  the  intervention  of  Newnham's  house,  for  the  purpose 
of  that  receipt,  and  could  therefore  hold  and  apply  it  to  no  other. 
Here  no  agency  for  the  plaintiff  ever  commenced,  but  was  repudiated 
by  the  defendants  in  the  first  instance.  We  are  of  opmion,  there JQie^. 
that  upon  no  principle  of  law  can  the  defendants  be  said  to  stand  in_ 
such  privity-  in  respect  to  the  plaintiff,  as  that  the  £300.  claimed  by  this 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  691 

action  can  be  said  to  have  been  money  had  and  received  to  the  plain- 
{Tff*g'~nggTjoi  coiirse,  therefore,  the  nonsuit  must  stand,  and  the  rule 
lor  settinir  it  aside  be  discharged.^- 


SECTION  2.— IN  TORT 


BULKELEY  v.  DUNBAR.^^ 

(Court  of  Exchequer,  1792.     1  Anstruthers,  37.) 

The  bill  stated,  that  one  Valentine,  the  ageiU  in  London  for  the 
plamtiffs  (merchants  at  Lincoln),  having  received  bills  from  them. 
to  De^y  IiiiTi  indorsed  on  their  account  as  required,  was,  by  menaces, 
^compelled  to  endorse  them  to  the  defendants  for  a  debt  of  his  own. 
The  bill  prayed  a  discovery  of  these  matters,  and  that  the  notes  niight 
t5e  delivered  up.  The  defendant,  Dunbar,  in  his  answer  said,  that  he 
"liad  only  acted  as  agerif 'fof  the  defendant  DufT,  and  disclaimed  havrng 

3  2  There  is  much  confusion  in  thecascs.  In  Hall  v.  Maision.  17  Mass,  r.T'> 
(1822),  it  is  laid  down  as  settled  law  that  "it  A.  proiuisi's  U.  lor  a  valuable 
consideration  to  pa.v  C,  the  latter  may  inaintani  assninpsit  for  the  money."' 
The  court,  perhaps  properly,  distinguishes  the  case  from  Williams  v.  Everett, 
suitra,  on  the  ground  that  in  that  case  there  was  no  promise  to  pay,  hut  a 
positive  refusal  of  the  agent  to  act.  This  was  approved  in  Lawrence  v.  Fox, 
20  N.  Y.  208  (lSi59)  (vigorous  dissenting  opinion  hy  Comstock,  J.),  the  court 
holding  that  "the  law  operating  on  the  act  of  the  parties  creates  the  duty, 
establishes  a  i)rlvity,  and  implies  the  promise  and  obligation  on  which  the 
a<-tion  is  foun<l('(l."  Tlie  application  of  the  doctrine  was  strictly  limited  in 
New  York.  P.arluw  v.  Myers,  i'A  N.  Y.  4."{,  21  Am.  Kep.  .')SL'  (lS7(i)  with  review 
of  cases;  Wheat  v.  Rice,  97  X.  Y.  29fi  (1SS4»,  in  which  the  i)romise  was  not 
made  to  pay  any  definite  parties,  hut  only  indefinite  creditors;  and  it  may 
be  doubte<l  if  it  ajiiilied  to  an  agent  receiving  money  from  his  principal  for 
a  third  persr)n.  but  making  no  undertaking  to  pay  according  to  directions; 
Seaman  v.  Whitney,  24  Wend.  2(;(),  :!."i  .Vm.  Dec.  OlS  (1,S40),  not  disproved  in 
the  later  cases.  Sec.  also,  Meyer  v.  Stitz,  9  N.  Y.  Siipp.  80.")  (IS'.);));  Burton 
V.  Larkin,  .'50  Kan.  24(;,  1.".  I'ac.  .'lOS,  .^,!)  Am.  Kep-  T)!!  (1SS7).  In  Massachusetts 
the  siime  limitations  are  to  be  noted,  and  it  is  diflicult  to  reconcile  latt>r  cases 
will)  Hail  V.  Marstcii,  supra,  liordcn  v.  I'.oardman,  ir)7  Mass.  410,  ."12  N.  E. 
4(19  HS92).  See  also  the  early  cases  of  Denny  v.  Lincoln,  5  Mass.  385  (1809). 
and  Freeman  v.  (Mis,  9  Mass.  272,  (i  .\m.   Dec.  0(5  (1812). 

In  Maine  the  doctrine  of  Hall  v.  Marsten,  sui)ra,  has  been  given  a  very 
broad  ait]ilication.  Keeiie  v.  Sage,  75  Me.  l."!S  (188:5),  which  the  Xew  Jersey 
court  has  declined  to  follow;  .N'olan  v.  Mant<tn,  40  N.  J.  Law,  2.'11,  50  Am. 
Kep.  40:{  (issj).  following  the  e.'irlier  c.Mse  of  Sergeant  v.  Stryker,  10  N.  .1. 
Law,  404,  .■!2  Am.  Dec.  HH  (l.s:!7).  In  the  case  of  money  received  by  thi' 
agent  from  Ills  principal  for  a  third  person  it  would  seem  that  his  duty  is 
to  his  principal  alone.  Colvin  v.  Holbrook,  2  N.  Y.  120  (IMS);  HaU  v.  Lau- 
derdale, 40  N.  V.  70  (IS7I),  until  the  agent  i)romises  to  i)ay  the  third  per.son, 
Coodwin  v.  Ii<iwden.  51  Me.  424  (lS(!7i,  or  enters  into  some  engagi'ment  with 
the  tliird  person  to  jiav  it  over,  Stevens  v.  Hill.  5  I^sp.  247  (1S05|.  per  Lord 
Kllenboron-h.  Tierman  v.  Jackson.  5  Pet.  5S(),  599,  8  L.  Ed.  2:i4  (is.-.l).  T'n- 
til  the  au'iMit  has  done  some  act  re<'o[:nl/,ing  the  api)roi)riation  of  the  money 
to  the  iiiirticiilar  purposes  specified,  the  money  is  at  the  risk  of  the  principal 
and  subject  to  his  rec-ill.  'ricrman  v.  Jackson,  suiira  ;  .Malcolm  v.  Scott,  5 
Exch.  001   (1S.-.0). 

■■>•■»  Accord:  f'ampbell  v.  Hilhn.'in.  15  IV  Mon.  .508,  01  Am.  Dec.  195  (ls5l(: 
Uilpy  v.  Hell.  IL'O  Ir.wji.  OlS,  ;),">  N.  W.  170  (r.»():!(. 


c 


(ill-        KFFECTS  AND  CONSKQUENCKS  OF  THE  RELATION    (Part  3 

anything  in  tlie  notes;  and  Uici-efarc-iusistcJ  xuiJjeiiig.striKk  out  as  a 
party;  and  only  examined  as  a  witness.  Exceptions  to  this  answer 
were  taken,  antl  allowed. 

By  the  Court.    When  an  agent  commils  a  {rau.cL_bc .is-answerable 

as  principal,  U)jhej)erson  injured,  who  is  not  to  be  sent  roun^  to  seek 

'  the  party  benefited  Vy  the  fraud.     If  the  money  or  notes  had  been 

^received" bona  fide  by  the  agent,  and  he  had  paid  il  (>\Hr  Ixlon-  action 

''l)ronoht,  that  would  have  been  a  good  defense;  but   lu-rc  there  is  a 

""^direct  charge  of  fraud,  which  must  be  answered.      .\nd  this   is  not 

^such  a  criminal  charge  as  will  screen  him  from  the  discovery  souprht. 

\/ 

GARRETT  v.  SPARKS  BROS. 

(Supreme  Court  of  Washiu.uton,  1911.     Gl  Wnsli.  .'{97.  112  Tac.  .501.) 

GosE,  J.  This  is  a  suit  to  recover  money  alleged  to  have  been  ob- 
tained from  the  plaintiff  through  the  fraud  of  the  defendant.  There 
was  a  verdict  and  judgment  for  the  plaintiff.  The  defendant  has  ap- 
pealed. 

There  is  abundant  evidence  to  support  the  judgment.  The  testi- 
mony of  the  respondent  shows  that  the  appellant  was  acting. as  agent 
/^  for  the  Plantations  Company  for  the  sale  of  certain  tracts  of  orchard 

land;  that  the  appellant  represented  to  the  respondent  that  the 
Plantations  Company  owned  a  piece  of  land  called  "Plantations,"  di; 
vided  into  small  tracts,  free  and  clear  of  all  incumbrances;  that, the 
respondent,  believing  and  relying  upon  the  representations,  paid  the 
appellant  $1,000  on  the  purchase  price  of  one  of  the  tracts;  thai  llie 
representations  were  false,  and  that  the  Plantations  Company,  as  the 
appellant  w^ell  knew,  did  not  own  the  land,  but  that  it  had  only  a 
contract  of  purchase,  which  it  later  forfeited. 

The  appellant  argues  that  the  only  issue  is  "the  responsibility  of 
an  agent  to  answer  to  a  third  person  for  the  default  of  a  disclosed 
principal."  On  the  contrary',  the  issue  is  the  liability  of  the  appellant 
to  answer  for  its  own  fraud.  Tlie  aniullaiit  cites  in  sui)port  of  its 
contention  Wdson  v.  Wold,  21  Wash.  398,  58  Pac.  223,  75  Am.  St. 
Rep.  846;  Nelson  v.  Title  Trust  Company,  52  Wash.  258,  100  Pac. 
730,  and  Davis  v.  Lee,  52  Wash.  330,  100  Pac.  752,  132  Am.  St.  Rep. 
973.  They  have  no  aj^jjlication  J;_o_  the^present  issue.  It  is  funda- 
/  mental  that  a  party,  whether  acting  for  himself  or  another,  is  hablc 

P'^-i  \,'<^  '  in  damages  for  his  own  fraud.  The  fact  that  the  principal  is  also 
liable  does  not  relieve  from  responsibility  the  party  who  actually 
commits  the  wrong.  In  such  cases,  the  liability  of  the  principal  can 
only  rest  upon  the  delict  of  its  agent.  The  party  who  has  been 
wronged  may  elect  to  sue  either  or  both.^*  . 

The  judgment  is  affirmed, 

84  "Where  intent  is  neces.sar.y,  as  in  malicious  proser ufion  or  fraud,  the 
agent  must  share  the  wrongdoing.  He  will  then  he  a  principal,  for  in  torts 
all  are  wrongdoers,  and  tlie  rule  of  principal  and  agent  does  not  exist.     Car- 


/ 


/5  / 


Ch.  3)  LIABILITY    OF    THE   AGENT    TO    THE    THIRD    PERSON  693 

PERKINS  V.  SMITH." 
(Court  of  King's  Bench,  1752.     1  Wilson.  328.) 

In  trover,  the  jury  find  a  special  verdict  which  in  substance  is 
shortly  this.  That  upon  the  22d  of  September  1749  Hughes  was  pos- 
sessed of  the  goods  in  the  declaration  as  his  own  property,  and  be- 
came a  bankrupt  that  day,  that  the  plaintiff  is  assignee  under  the 
commission;  that  upon  the  23d  of  September  1749,  the  defendant 
Smith,  who  is  servant  and  riding  clerk  to  Mr.  Garraway  to  whom 
the  bankrupt  was  considerably  indebted,  went  to  the  bankrupt's  shop 
(to  try  to  get  his  master's  money)  and  found  it  shut  up,  and  that 
the  bankrupt  delivered  to  Smith  the  goods  in  the  declaration,  who 
gave  a  receipt  for  the  same  in  the  name  of  his  master,  and  sold  the 
same  for  his  master's  use. 

It  was  objected  that  the  action  was  improperly  brought  against  the 
servant  Smith,  who  acted  wholly  in  this  matter  for  his  master,  and 
that  the  conversion  is  found  to  be  to  the  use  of  his  master,  which  is 
the  gist  of  an  action  of  trover:  after  two  arguments  at  the  bar,  the 
court  gave  judgment  for  the  plaintiff. 

Lee,  Chief  Justice.  The  point  is,  whether  the  defendant  is  not  a 
tort-feasor,  for  if  he  is  so,  no  authority  that  he  can  derive  from  his 
master  can  excuse  him  from  being  liable  in  this  action. 

Hughes  the  bankrupt  had  no  right  to  deliver  these  goods  to  Smith ; 
the  gist  of  trover  is  the  detainer  or  disposal  of  goods  (which  are  the 
property  of  another)  zvrongfully;   and  it  is  found  that  the  defendant 

rahor  v.  Allen,  112  Iowa,  108,  S3  N.  W.  902  (1!)00) ;  Wchor  v.  Wober,  47  Mich. 
r.<;9.  11  N.  W.  3S!)  (18S2):  Gutchess  v.  Wliitney.  4(5  Baiit.  i:?f)  (IsdC));  IltHker 
V.  Do  (Jrott.  l.'j  How.  Vvtio.  (N.  Y.)  314  (isn7»,  distintiuisliin;;  luMwoen  an  agent 
as  an  uiuonsrious  instniiiicnt  and  a  knowing  participant  in  a  fraud;  Wimple 
V.  Tatterson  (IVx.  Civ.  App.)  117  S.  W.  KKM  (100!)).  excusing  the  agent  when 
lie  honestly  believes  tlie  representations  made  by  him. 

S5  Accord;  Mel'heters  v.  Page,  83  Me.  234.  22  Atl.  101,  23  Am.  St.  Rep.  772 
(1891).  Ct.  <^}rr'enway  v.  Fisher,  1  (".  &  P.  190.  12  K.  C.  L..  118  (1824).  Many 
of  Ihe  Eutrlish  eases  of  eonversir)n  by  an  agent  involve  the  disi)os;il  of  goods 
of  a  bankrupt,  which  may  account  for  the  somewhat  extreme  aitplication  of 
the  doevrine  of  conversion  against  the  agent.  See  Stephens  v.  Klwell,  4  M.  & 
S.  2r)9.  10  Key.  Reji.  4riS  (181.''i),  a  leading  case.  Many  American  cases  refuse 
to  go  po  far,  and  criticise  the  extensive  ajiiilicalion  of  the  action  of  trover 
I'gainst  an  agent  who  lias  acted  in  good  f.-iilli  for  bis  principal.  See  Rogers 
V.  Huie.  2  r'al.  571.  no  Am.  Dec.  .'503  (Is.VJi.  wbicb  limits  tlie  agent's  liability 
to  (ases  where  he  lias  either  appropriated  the  goods  of  (be  third  person  to 
his  own  use,  or  has  by  some  otber  act  dejirived  tlie  owner  of  bis  property 
with  wrontifnl  intent,  expressed  or  Implied.  In  Sjiooiier  v.  Holmes,  102  Ma.ss. 
rA)'.'..  r»  Am.  Uep.  491  (1S09(,  lliougb  extending  tbe  liability  to  an  ageni  wbo  In 
good  faitli  sells  the  goods  of  a  tbird  person  supposing  tlnMii  to  beloiii.'  to  his 
principal,  tbe  coifl'*^  nevertheless  <'arefiiliy  limits  tbe  application  of  tbe  doctrine 
toaii.'igeiit  acting  le  irond  failb.  For  intereslliig  discussions,  see  lial'Myelle  Co. 
P.ank  v.  Mr-tcalf.  40  Mo.  Api).  191  (1890);  Lee  v.  Rayes.  18  C.  B.  599,  2  Jur. 
(N.  S.)  1093,  25  L.  .T.  <:.  P.  219,  NO  F.  < '.  L.  599  (ls.-,0);  and  Fowler  v.  liol- 
11ns,  U  R.  7  ^^  P..  010.  41  L.  J.  <i.  P..  277,  27  F.  T.  Rep.  (.\.  S.l  lOs.  -0  W.  R 
868  (1872),  allirmed  In  L.  R.  7  M  F.  <  '"^  T.'T,  11  F.  .F  ().  P..  109.  :;:;  F.  T.  Ifep. 
N.  S.  73  (l<i74). 


<>n4  EFFECTS    ANP    CONSKQITENCES   OF  THE    RELATION  (Part   3 

himself  dis/'oscd  of  thcni  to  his  fnastcr's  use,  which  his  inastcr  could 
give  him  no  authority  to  do;  and  this  is  a  conversion  in  Smith,  this 
c1isf>osal  hcing  his  own  tortious  act ;  the  act  of  scIUjkj  the  goods  is 
the  con7'ersion,  and  whether  to  the  use  of  himself,  or  another,  it  makes 
no  dilYerencc ;  I  am  very  well  satisfied  that  this  servant  has  done 
wrong,  and  that  no  authority  that  could  be  derived  from  his  master 
before,  or  after  the  fact,  can  excuse  him. 

The  finding  that  the  defendant  disposed  of  the  goods  for  his  mas- 
ter's use  is  oidy  the  conclusion  of  the  jury,  and  does  not  bind  the  court, 
the  taking  upon  him  to  dispose  of  another's  property  is  the  tortious 
act.  and  the  gist  of  this  action.  Judgment  for  the  plaintiff  per  totam 
curiam. 


HEUGH  V.  EARL  OF  ABERGAVENNY  AND  DELVES."" 

(Superior  Courts  of  Euglaiid  aud  Ireland,  1874.     23  W.  R.  40.) 

The  bill  in  this  suit  stated  that  the  plaintiff  was  owner  of  certain 
land  in  Kent,  abutting  on  that  of  the  defendant,  the  earl  of  Aber- 
gavenny, and  that  some  dispute  having  arisen  between  the  plaintiff  and 
the  said  defendant  as  to  a  weir  situate  on  the  plaintift''s  land,  the  said 
defendant  and  the  defendant  Delves,  a  land  agent  who  professed  to 
act  on  his  behalf  had  respectively  threatened  and  still  intended  to  en- 
ter forcibly  on  the  plaintiff's  land  and  to  pull  down  and  destroy  the 
weir.  The  bill  prayed  for  an  injunction  to  restrain  the  defendants 
from  so  doing. 

The  defendant  Delves  demurred  to  the  bill  for  want  of  equity  on 
the  ground  that  he  had  no  interest,  being  a  mere  agent  acting  under 
the  instructions  of  the  other  defendant. 

JessEL,  M.  R.,  said  there  could  be  no  agency  as  between  wrong- 
doers. Want  of  interest  was  no  defense  to  a  charge  of  tort,  though 
committed  under  the  direction  of  another.  The  wrongdoer  became 
personally  liable.    The  demurrer  must  be  overruled. 


DENNY  V.  ^L\NHATTAN  CO. 

(Supreme  Court  of  New  York,  184G.     2  Denio,  115.) 

Case,  for  alleged  violation  of  duty  by  defendants,  as  agents  of  the 
Planters'  Bank  of  Tennessee,  in  refusing  to  permit  a  transfer  to  plain- 
tiffs on  the  transfer  books  of  the  Planters'  Bank,  kept  by  them,  of  281 
shares  of  stock  in  that  bank,  alleged  to  belong  to  plaintiffs  as  trustees. 

Per  Curiam.  We  entertain  a  pretty  strong  impression  that  the 
plaintiffs  have  failed  to  show  a  good  title  to  the  stock ;  but  our  deci- 
sion will  be  put  upon  another  ground,  concerning  which  we  have  had 

3c  Acrord:  Thorp  v.  Burling.  11  .Johns.  285  (1814).  Ignorance  of  the  tres- 
pass will  not  save  the  agent.    Iligginson  v.  York,  5  Mass.  .'341  (ISOOi. 


/- 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  695 

no  doubt  from  the  moment  the  case  Avas  opened.  If  the  plaintiflFs  hav2 
a  cause  of  action  against  any  one,  it  is  not  against  the  defendants, 
but  against  the  Planters'  Bank  of  Tennessee.  The  defendants  were 
not  the  agent  of  the  plaintiffs  and  owed  them  no  duty.  They  were  the 
agent  of  the  Planters'  Bank;  and  for  a  neglect  to  discharge  their 
agency,  they  are  answerable  to  their  principal  and  to  no  one  else.  If 
third  persons  are  injured  by  the  neglect  of  a  known  agent,  the  rule  is 
respondeat  superior,  and  generally  the  action  must  be  brought  against 
the  principal. 

Judgment  for  defendants. 


FELTUS  V.  SWAN." 

(Supreme  Court  of  Mississippi,  1884.     G2  Miss.  415.) 

Action  for  damages  resulting  from  the  neglect  and  refusal  of  dc- 
fendantTas" agent  oTtlie'bwneT'of  a  plantation,  to  keep  open  a  drain,  by 
reason  of  wItJcji  water  was  backed  up  rni  the  land  of  plaintiff.    Tlie^ 
court  belaaisustained  a  demurrer  to  the  declaration. 

Campbell,  C.  J.     The  appellee  being  a  mere  agent  was  not  lia]2le_ 
for  an  omission  of  dutj  except  to  his  principal.    Story  on  Agency,  §§ 
"308,  309;  Wharton  on  Agency,  §§  535,  536;   Dunlap's  Paley's  Agen- 
cy, 396. 

The  proposed  amendment  would  not  have  made   the   declaration 

goo^.lof  whatever  motive  operated  on  the  agent,  the  charge  against 

"Tiim  was  only  that  he  had  failed  to  do,  and  not  that  he  had  (Imic  any- 

tfiuignnialiciously,  and  for  nonfeasance  or  omission  to  act  at  all  the 

"agent  is  answerable  only  to  his  employer. 

'Affirmed. 


X 


GREENBERC  v.  WTTTTCO:\IB  LUMBER  CO.  et  al. 

(Supreme  Court  of  Wisc-onsiii,  LSD.l.     00  Wis.  225,  03  N.  Wl  9.1,  28  L.  R.  A. 
4:V.>,  48  Am.  St.  Kep.  911.) 

irtinn  for  datpages  for  personal  injury  caused  by  a  defective  saw 
in  defendants'  sawmill.  Defendant  Seniple  was  manager  of  the  mill. 
The  case  came  up  on  dcmurn  r~.  , 

N"i-:w.\iA.\,  J."  f.Vftcr  holding  that  the  comj)laint  states  a  cause 
of  action  as  to  the  company:]  *  *  *  Whether  the  c(Mnplaint 
states  a  cause  of  action  against  the  defendant "TarTah  Sempte  Is  more 
complex.  He  was  the  agent  or  servant  of  the  Whitcomb  Lumber 
Company,  charged  with  the  oversight  and  management  of  its  op.-ra- 
tions,  and  with  the  duty  of  i)roviding  a  safe  machine  for  the  work 

a7  Afford:  I>el!wif.v  v.  IJodif renu,  .'Jl  Lu.  Ann.  112:;,  41  Am.  Itt-p.  45(;  (1882). 
Cf.  tlif  fJiHfH  followim;. 

:"  I'art  of  the   ri|iiiiion    is  omlttfd. 


()l)G  EFFECTS  AND  coNsi:Qri:Noi:s  OF  'I'lii;  uKi.ATioN       (Part  3 

ill  which  the  plaintift"  was  cnj;ai;cd.  The  iirinciplc  is  well  settled  that 
the  agent  or  servant  is  responsible  to  third  i)ersons  only  for  injuries^ 
wliich  are  oeeasioned  by  TiisTiTlsTeasaiiee,  aniTnot  for^tliosc  occasionetl 
by  his  mere  nonfeasanec.     Some  confusion  has  arisen  in  the  cases, 

"from  a  failure  to  observe  cloarly  the  distinction  between  nonfeasance 
and  misfeasance.  These  ternis  are  very  accuratelydefined.  an_d  their 
applicjiUon_to_ciucstioiis_of  negligence  pointed  out,  by  Judge  M.C'tcalt 
iiTBell  V.  Josselyn,  3  Gray,  309,  63  Am.  Dec.  741.  "XOni.  a  uice.^ 
says  the  learned  judge,  "is  the  omission  of  an_act^\vliiili  a  pci  mi  mi-lit 
to  do;    misfeasance  is  the  improper  doing  of  an  art   wliicli  a  iin-MH 

'  niigTif  Iriw-Tully  do;  malfeasance  is  the  doing-  of  an  act  which  a  person 
ought  not  to  do  at  all."  — — — 

Tlie'appTication  of  these  definitions  to  the  case  at  bar  is  not  difficult. 
It  was  Seniple's  duty  to  ha\  c  had  this  machine  safe.  His  neglect  to  do 
so  w^s  nonfeasance.  But  that  alone  would  not  haye  harmed  the  plain- 
tiff,  if  he  had  not  set  funi  to  work  upon  it.    To  set  him  to  work  upon 

.  ,  ■  -       -J     -I>l      T  1     •     -  I         ^ 

this  defective  and  dangerous  machine,  knowmg  it  to  be  dangeroii3. 
was  doing  improperly  an  act  which  one  might  law  fully  do  in  a  oroppr 
manner.  It  was  misfeasance.  Both  elements,  nonfeasance  and  mis- 
feasance, entered  into  the  act,  or  fact,  which  caused  the  iilaint ill's 
damages.  But  the  nonfeasance  alone  could  not  have  produced  it.  Tlie 
misfeasance  was  the  efficient  cause.  For  this  the  defendant  Scniple  is 
responsible  to  the  plaintiff.     Mechem,  Ag.  §  569  et  seq. ;    14  Am.  \ 

"~"Eng.  Enc.  Laws  873,  and  cases  cited  in  note  4;  Wood,  Mast.  &  Scrv. 
(2d  Ed.)  667;  Osborne  v.  Morgan,  130  Mass.  102,  39  Am.  Rep.  437.3'' 
The  complaint  states  but  a  single  cause  of  action.  It  is  the  -aiiic 
cause  of  action  against  both  defendants,  arising  from  the  same  acts  <>i 
negligence, — the  master  for  the  negligence  of  its  servant;  the  scrxant 
for  his  own  misfeasance.  Both  master  and  servant,  benng  lialilc  f'lr 
the  same  acts  of  negligence,  may  be  joined  as  defendants.     Woixl, 

—Mast.  &  Serv.  supra:  Wright  v.''Wnc6"x,  19  Wend.  343,  32  Am.  Dec. 
507 ;   Phelps  v.  Wait,  30  N.  Y.  78. 

The  order  appealed  from  by  t.be  .Whitcomb  Luinber  Coinpau}  is 
afifirmed,  and  the  order  appealed  from  by  the  plaintiff  is  reversed. 


39  See  the  illuniinatiiig  discussion  of  Cobh.  P.  J.,  in  So.  Rv.  Co.  v.  Grizzle, 
124  Ga.  735,  53  S.  E.  244,  110  Am.  St.  Rep.  1!)1  (1006),  which  holds  that  when 
once  the  agent  has  entered  upon  the  performance  of  his  contract  with  his 
principal  he  is  responsible  for  omissions,  or  commissions,  in  the  execution  of 
liis  agency  whereby  some  third  person  is  injured,  to  the  same  extent  as  if 
he  had  committed  the  wrong  in  his  own  behalf.  Also,  Ellis  v.  McNaughton, 
76  Mich.  237,  42  N.  W.  1113,  15  Am.  St.  Rep.  308  (1889). 


Ch.  3)  LIABILITY    OF    THE    AGENT    TO    THE    THIRD    PERSON  OUT 

BAIRD  V.  vSHIPMAN. 

(Supreme  Court  of  Illinois,  1590.     132  111.  16.  23  N.  E.  3S4,  7  L.  R.  A.  128, 

22  Am.  St.  Rep.  504.) 

Per  Curiam.     The  following  opinion  of  the  appellate  court  fully 
presents  the  question  arising  upon  this  record: 

"GarxETT,  p.  J.    This  is  an  appeal  from  a  judgment  for  damages, 
founded  on  the  alleged  negligence  of  appellants,  by  which  the  death 
"Ufjoseph  Garnett,  appellee's  intestate,  is  said  to  have  been  caused. 
"The  place  where  the  injury  happened  was  in  a  barn  skuated  onprem- 
ises  on  Michigan  avenue,  in  Chicago,  belonging  to  Aaron_  CT  Good: 
man,  who  was  then,  and  foi^severalyears  before  had  beeiv-a-^esid- 
or  Hartford,    Conn.      Appellants   were    his    agents    for   renting   the., 
premises  during  the  years  1884  and  1885,  and  during  both  years  were 
carrying  on  the  real-estate  business  in  Chicago.     On  the  trial,  evi- 
dence was  given  tending  to  show  that  they  had  in  fact  complete  cou- 
~~tfol  of  the  premises,  with  the  residence  and  barn  thereon,  repairiji^_. 
"■  the  "same,  in  their  discretion;    and  there  was  no  proof  that  in  such 
-maTters  they  received  any  directions  from  the  owner.     The  propertV- 
-Was  rented  by  appellants  to  Emma  R.  Wheelerand_A^  R^  Tillman 


from  April  1,  1884,  to  April  30,  1885,  and  to  Emma  R.  Wheeler 
from  May  1,  1885,  to  April  30,  1886.  Both  leases  were  in  writ- 
ing, and  by  the  terms  of  each  lease  the  tenants  covenanted  to  keep 
the  premises  in  good  repair.  The  tenant  iaJJie  last  lease  rented  tlie- 
premises  to  Nellie  E.  Pierce,  who  occupied  the  same  from  April  28 
to  Feptember,  1885.  The  evidence  tends  to  prove  that  when  the  lease 
was  made  to  Emma  R.  Wheeler  the  large  carriage  door  to  the  barn 
was  in  a  vcr\  in m  cure  condition,  and  that  appellants,  through_one 
Warner,  the  ni.nia-cr  of  their  renting  department,  verbally  agreed 
^vlth^TrsTXVhr.  1(  r  lu  put  the  premises  in  thorough  repair.  Nothing 
was  done  to  improve  the  condition  of  the  door ;  and  on  June  12^ 
1885,  while  the  fleceascd.  aTrcxjjrcRSilian  l2>^  pccupatibn ,  was  t-n gaged^^ 
ItTdelivering  aJoaj"(2rElJ.liLl'lltLi'?  tJic. barn. for JinejiJ  "the  parlies  liv- 
ing  m  tjhfijiaiise^  the  door,  weigliing  about  400  pounds,  fell  from  its 
'Tastcmngs,  and  injured  him  Uj_siich  an  extent  that  he  died  the  next 
day. 

"Appellants    make   two   points:    (1)  That    the    verdict    is   clearly 
against  the  weight  of  the  evidence;    (2)  that  they  were  the  agents 
of  the  owner,  (Gcjodman.)  and  liable  to  him  only  for  any  negligence  . 
attributable  to  them. 

■"!  here  is  nothing  more  than  the  ordinary  conflict  of  evidence 
found  in  such  cases,  presenting  a  question  of  fact  for  the  jury;  and 
the  finding  mu.st  be  respected  by  this  court,  in  deference  to  the  well- 
settled  rule. 

I'Tlie  other  point  is  not  so  easily  disposed  nf.  An  a-cnt  is  liable 
to  lu^  princijial  only  for  mere  breach  of  his  princi- 


t;j)8 


lOKFKCTS   AND   CONSKQIKNOIOS   OF   TUK    RELATION  (Part    '.\ 


\ 


pal;  but  he  must  liave  due  regard  to  tlic  rights  aud  safety  ofthii'il 
persons.  He  eannot  in  all  cases  find  shelter  behind  his  principal.  lfj_ 
in  the  course  of  his  ag^ency  he  is  intrusted  with  the  operation  of  a .. 
dangerous  machine,  to  guard  himself  from  pcrsonaj^  liability,  lie  Jinisi 
use  proper  care  in  its  management  and  supervision,  so  that  others,  in 
the  use  of  orilinary  care,  will  not  suffer  in  life,  limb,  or  property^ 
Suydam  v.  Moore,  8  Barb.  358.  Phelps  v.  Wait,  30  N.  Y.  7i>.  It  is 
not  his  contract  with  the  principal  which  exposes  him  to,  or  protects 
him  from,  liability  to  third  persons,  but  his  common-law  obligation 
to  so  use  that  which  he  controls  as  not  to  injure  another.  That  ob- 
ligation is  neither  increased  nor  diminished  by  his  entrance  upon  the 
duties  of  agency ;  nor  can  its  breach  be  excused  by  the  plea  that  his 
principal  is  chargeable.  Delaney  v.  Rochereau,  34  La.  Ann.  1123,  44 
Am.  Rep.  456. 

"If  the  agent  once  actually  undertakes  and  enters  upon  the  execu- 
tion of  a  particular  work,  it  is  his  duty  to  use  reasonable  care  in  the 
manner  of  executing  it,  so  as  not  to  cause  any  injury  to  third  persons 
which  may  be  the  natural  consequence  of  his  acts ;  and  he  cannot 
escape  this  duty  by  abandoning  its  execution  midway,  and  leaving 
things  in  a  dangerous  condition,  by  reason  of  his  having  so  left  them 
without  proper  safeguards.  Osborne  v.  Morgan,  130  Mass.  102,  39 
Am.  Rep.  437. 

1^  "A  number  of  authorities  charged  the  agent,  in  such  cases,  on  the 
p-!ground  of  misfeasance,  as  distinguished  from  nonfeasance.  Mcchem, 
lin  his  work  on  Agency,  §  572,  says :  'Some  confusion  has  crept  into 
certain  cases  from  a  failure  to  observe  clearly  the  distinction  between 
nonfeasance  and  misfeasance.  As  has  been  seen,  the  agent  is  not 
liable  to  strangers  for  injuries  sustained  by  them,  because  he  did  not 
undertake  the  performance  of  some  duty  which  he  owed  to  his  prin- 
cipal, and  imposed  upon  him  by  his  relation,  which  is  nonfeasance. 
Misfeasance  may  involve,  also,  to  some  extent,  the  idea  of  not  doing, 
as  where  the  agent,  while  engaged  in  the  performance  of  his  under- 
taking, does  not  do  something  which  it  was  his  duty  to  do  under  the 
circumstances, — does  not  take  that  precaution,  does  not  exercise  that 
care,  which  a  due  regard  for  the  rights  of  others  requires.  All  this 
is  not  doing;  but  it  is  not  the  not  doing  of  that  which  is  imposed 
upon  the  agent  merely  by  virtue  of  his  relation,  but  of  that  which 
is  imposed  upon  him  by  law,  as  a  responsible  individual,  in  common 
with  all  other  members  of  society.  It  is  the  same  not  doing  which 
constitutes  actionable  negligence  in  any  relation.'  To  the  same  effect 
are  Lottman  v.  Barnett,  62  Mo.  159;  Martin  v,  Benoist,  20  Mo.  App. 
263;  Harriman  v.  Stowe,  57  Mo.  93;  Bell  v.  Josselyn,  3  Gray,  309, 
63  Am.  Dec.  741. 

"A  case  parallel  to  that  now  in  hand  is  Campbell  v.  Sugar  Co.,  62 
Me.  552,  16  Am.  Rep.  503,  where  agents  of  the  Portland  Sugar  Com- 
pany had  the  charge  and  management  of  a  wharf  belonging  to  the 
company,  and  rented  the  same  to  tenants,  agreeing  to  keep  it  in  re- 


.OL 


^ 


'^'/yj^^ 


Ch.3) 


LIABILITY    OP    THE    AGENT    TO    THE    THIRD    PERSON 


699 


pair.  They  allowed  the  covering  to  become  old,  worn,  and  insecure, 
bv  means  of  which  the  plaintiff  was  injured.  The  court  held  the 
agents  were  equally  responsible  to  the  injured  person  with  their 
principals. 

"Wharton,  in  his  work  on  Negligence,  §  535,  insists  that  the  dis- 
tinctioiTjjnjliis  class  of  cases,  between  nonfeasance  and  mis  feasance,^         -^ 
"can  no  longer  be  sustained,*"  that  the  true  doclrine  is  that  when  an_  //^^ 
_agent  is  employed  to  work  on  a  particular  thing,  and  has  surrendered  -^^yf/i/ 
"the  thing  In  question  into  the  principal's  hands,  then  the  agent  ceases  L^      -^ 

"to  1)6  liable  to  third  persons  for  hurt  received  by  them  from  such  ^    -< 


40  The  whole  distinction  between  nonfeasance  and  misfeasance  is  vigorous- 
ly attacked,  and  the  basis  of  decision  in  such  cases  is  put  instead  on  the  uiax- 
ini  sic  utere  tuo  ut  alionum  non  hedas,  in  Lousch  v.  John  Davis  &  Co.,  oO 
Wash.  204,  70  Pac.  4;)1.  r.9  L.  R.  A.  802,  94  Am.  St.  Rep.  848  (1902).  The 
rule  that  the  agent's  liability  to  third  persons  in  tort  depends  on  whether  the 
wrong  consists  in  a  nonfeasance  or  a  niistVasance  seems  to  go  back  to  Lord 
Holt's  statement  in  Lane  v.  Cotton,  1  Ld.  Kaym.  64G.  12  Mod.  488  (1701),  that, 
"a  servant  or  deputy  (piatenus  such  cannot  be  charged  for  neglect,  but  the 
principal  only  shall  be  charged  for  it;  but  for  a  misfeasance  an  action  will 
lie  against  a  servant  or  deputy,  but  not  quatenus  dei»uty  or  servant,  but  as  a 
wrongdoer."  As  has  been  pointed  out.  not  only  was  this  a  dissenting  opinion. 
but  this  question  was  not  even  involved  in  the  case,  nor  was  it  involved  in 
Stone  v.  Cartwright.  G  T.  R.  411  (179.j),  which  was  cited  as  authority  for  it." 
Xevcrthelosf  so  weighty  was  the  word  of  rx)rd  Holt,  that  his  dictum  in  a 
"n^s.'iiting  "oimiToii  was  "fonowed  by  Story  on  Agency,  §  308,  and  by  great  num- 
bers of  decisions,  many  of  which  found  it  necessary  to  newly  define  nonfeas- 
ance in  order  to  f:isten  liability  on  an  agent  for  a  wrong  done  to  a  third  per- 
son, which  ordinarilv  would  be  called  mere  neglect,  or  nonfeasance.  See  Bell 
V.  Josselyn,  3  Gray^  .309,  03  Am.  Dec.  741  (18r)5) :  Osborne  v.  Morgan,  130 
Mass.  102,  39  Am.  Rep.  437  (1881).  approved  in  Stiewel  v.  Borman,  03  Ark. 
30,  37  S.  W.  404  (1890);  Hagerty  v.  .Montana  Ore  Purchasing  Co.,  38  Mont. 
go'.  98  Pac.  G4:{,  2.'>  L.  R.  A.  (X.  S.)  35G  (i;i(t8i:  Gas  Co.  v.  Connor.  114  Md. 
140.  157.  78  Atl.  72.").  32  L.  R.  A.  (N.  S.)  809  (1910);  Schlosser  v.  Railway  Co., 
20  N.   D.  40G,   127   \.  W.  .".02  (1910). 

Others,  by  following  the  rule,  and  adhering  to  the  ordinary  meaning  of  non- 
feasance, arrive  at  decisions  in  conflict  with  these  last.  Delaney  v.  Roch- 
ereau,  34  La.  Ann.  112:5,  44  Am.  Rep.  4r.G  (1882);  Ilenshaw  v.  Noble,  7  Ohio 
St.  22G  (18r)7» ;  Krwin  v.  Davenyiort.  9  Helsk.  44  (1871):  Feltus  v.  Swan,  su- 
pra; Drake  v.  Hagan.  108  Tenn.  2G5,  G7  S.  W.  470  (1902);  Van  Antwerp  v. 
Linton.  89  Hnn.  417.  3."»  N.  Y.  Supp.  318  (1.S9."»),  <iting  the  dictum  of  Andrews, 
J.,  in  Murray  v.  Csher,  117  N.  Y.  542,  2:;  N.  K.  504  (1889). 

Still  others  hold  that  the  liability  does  not  grow  out  of  any  privity  of  par- 
ties or  f)f  any  relation  of  agency.  It  does  not  rest  in  contract  at  all,  but  on 
the  common-law  obligation  of  all  to  so  use  what  they  control  as  not  to  in- 
jure another,  whether  in  the  use  of  their  own,  or  of  the  projierty  of  another 
ns  agent.  In  this  view  the  i|\iestion  is.  was  there  a  duty  !ind  has  it  been  vio- 
lated".' Lough  V.  .lolin  Davis  &  Co.,  su))ra;  Kills  v.  So.  Ry.  Co..  72  S.  C.  U".."., 
52  S.  E.  228.  2  L.  R.  .\.  (.N.  S.)  .'578  (1905).  Note  to  P.aird  v.  Shiimian.  supra. 
in  22  .\ni.  St.  Rep.  512;  note  to  Mayer  v.  Thompson-llnlchiiison  I'.ldg.  Co..  10  1 
Ala  Gil  KJ  Sontli.  <',ii(».  .5:5  Am.  St.  Rej).  88.  in  ijs  L.  R.  A.  4;;:5  (1S91);  I'jirry  v. 
Smith,  L.  R.  4  C.  P.  Div.  :'.25,  48  L.  J.  C.  P.  731,  41  L.  T.  Rep.  (N.  S.)  9:5,  27 
\V.   R.  801   (1.S75). 

Acronling  to  all  the  cases  tho  agent  Is  not  liable  for  injuries  (hie  to  causes 
otitslde  the  scope  of  his  ag<-ncy  and  of  his  acts  under  It.  Kuhnert  v.  .\ngell, 
10  N.  D.  59,  84  N.  \S .  579,  88  Am.  St.  Rep.  G.75  (1900).  But  he  is  liable  for 
acts  of  misfeasance  in  the  performance  of  his  agency.  Harriman  v.  Stowe, 
57  Mn.  9:5.  The  principal  is  also  liable.  'J'lie  liability  of  the  agent  is  primary, 
that  of  the  principal  secondary.  If  the  agent  is  lnn<tcent,  so  is  the  prin«i|pal. 
P.radh'v  V.  no^uilbal.  1.54  Cal.  420,  97  Pac.  875,  129  Am.  SI.   Keii.   171   (19(»si. 


/ 


V^ 

^ 


r 


700  EFFiu'TS  AND  ("ONsi'.i.ir i:nci:s  of  riii;  kelation        (i\iit  3 

ihiiij;',  though  (he  hurt  is  rtMUt)U'ly  chic  to  the  agent's  neghgence,  the 
reason  being  thai  the  causal  rchition  between  the  agent  and  the  per- 
son hurt  is  broken  by  the  inlerpDsition  of  the  principal  as  a  distinct 
center  of  legal  responsibilities  and  duties,  but  that,  even  where  there 
is  no  such  interrupting  of  causal  connection,  and  the  agent's  negli- 
gence directly  injures  a  stranger,  the  agent  having  liberty  of  action 
in  respect  to  the  injury,  then  such  stranger  can  recover  from  the 
agent  damages  for  the  injury. 

"The  rule,  whether  as  stateil  by  Mechem  or  Wharton,  is  sullficient 
to  charge  appellants  with  damages,  under  the  circumstances  disclosed 
in  this  record.  They  had  the  same  control  of  the  premises  in  ques- 
tion as  the  owner  would  have  had  if  he  had  resided  in  Chicago,  and 
attended  to  his  own  leasing  and  repairing.  In  that  respect,  appellants 
remained  in  control  of  the  premises  until  the  door  fell  upon  the  de- 
ceased. There  was  no  interruption  of  the  causal  relation  between 
them  and  the  injured  man.  They  were,  in  fact,  for  the  time  being, 
substituted  in  the  place  of  the  owner,  so  far  as  the  control  and  man- 
agement of  the  property  was  concerned.  The  principle  that  makes 
an  independent  contractor,  to  whose  control  premises  upon  which  he 
is  working  are  surrendered,  liable  for  damages  to  strangers  caused 
by  his  negligence,  although  he  is  at  the  time  doing  the  work  under 
contract  with  the  owner  (Whart.  Neg.  §  440),  would  seem  to  be  suffi- 
cient to  hold  appellants.  The  owner  of  cattle,  who  places  them  in  the 
hands  of  an  agister,  is  not  liable  for  damages  committed  by  them 
while  they  are  under  control  of  the  agister.  It  is  the  possession  and 
control  of  the  cattle  which  fix  the  liability ;  and  the  law  imposes  upon 
the  agister  the  duty  to  protect  strangers  from  injury  by  them.  Ward 
V.  Brown,  64  111.  307,  16  Am.  Rep.  561 ;  Ozburn  v.  Adams,  70  111. 
291. 

"When  appellants  rented  the  premises  to  Mrs.  Wheeler  in  the  dan- 
gerous condition  shown  by  the  evidence,  they  voluntarily  set  in  mo- 
tion an  agency  which,  in  the  ordinary  and  natural  course  of  events, 
would  expose  persons  entering  the  barn  to  personal  injury.  Use  of 
the  barn,  for  the  purpose  for  which  it  was  used  when  the  deceased 
came  to  his  death,  was  one  of  its  ordinary  and  appropriate  uses,  and 
might,  by  ordinary  foresight,  have  been  anticipated.  If  the  insecure 
condition  of  the  door  fastening  had  arisen  after  the  letting  to  Mrs. 
Wheeler,  a  different  cjuestion  would  be  presented;  but,  as  it  existed 
before  and  at  the  time  of  the  letting,  the  owner  or  persons  in  control 
are  chargeable  with  the  consequences.  Gridley  v.  Bloomington,  68 
111.  47;  Tomle  v.  Hampton,  129  111.  379,  21  N.  E.  800.  Neither  error 
is  well  assigned,  and  the  judgment  is  affirmed." 

We  fully  concur  in  the  legal  proposition  asserted  in  the  foregoing 
opinion,  and  deem  it  unnecessary  to  add  to  what  is  therein  said  in 
support  of  that  pro|j(jsition.    The  judgment  is  affirmed. 


Ch.  4)  LIABILITY    OF    THIRD    PEUSONS    TO    THE    AGENT 


701 


7 


CHAPTER  IV 
LIABILITY  OF  THIRD  PERSONS  TO  THE  AGENT 


SECTION  L— IN  CONTRACT 


GUNN  V.  (^ANTIKE. 
(Supreme  Court  of  Judicature  of  New  York,  1813. 


10  Johns.  .•iS7.) 


Assumpsit  for  money  had  and  received,  to  the  use  of  plaintiff.    Gunn 
was  agent  to  collect  money  for  Stephen  Simmons  and  gave  the  con- 

TfacFfoXanTine  for  collection.     Cantine  collected  and  refused  to  ac— 

"count  to  Gunn. 

— ^ER   Curiam.     It  appears  affirmatively,  _from  the  case,  that  the 
plaint[ff  had  no  beneTTcTarinterest  in  the  money  collected.  _He.  was  a 

nmere  attorney  emi)loyed  by  Simmons  to  collect  this  debt ;   and  there 
w"ai~no  express  promise  by  the  defendant  to  pay  the  money  collected 

~Tcrtli£  plaintiff. "  , 

'      The  letter  of  attorney  was  revocable  at  pleasure^  and  the  law  will 
not  rais_e_any  assiTnipsifTo  the  plaintiff  from  the  facts  in  this  case. 

TTiTsTs^bylio  means,  so  strong  a  case  as  that  of  Pigott  v.  Thompson, 
3  Bos.  &  Pull.  147,  and  yet  in  that  case  the  agent  was  not  permitted 
to  sue  in  his  own  name.    The  defendant  is  entitled  to  judgment. 
Judgment  for  the  defendant!  '         ", 

— /   i- 


Aa^A^C 


TH.'XTCHER  v.  WINSLOW. 


(Circuit  Court  of  the  I'liited  States,  18L'8.    5  Mason,  58,  Fed.  Cas.  No.  i:?.sr,:i.) 

Assumpsit  on  certain  notes  made  by  Lewis  Rousmanierc,  payable 

to'Ttre'defendant  [Andrew  Winslnw],  or  his  order,  at  the  Merchants' 

"TTaiil-  in  Newport.    TTie  declaration  contained  various  counts  against 

'"TirFTTcfcmTanTTaTintlorsee,  in  favour  of  the  plaintiff  [David  Thatcher] 

as  indorser.     Plea,  tlie  general  issue. 

^t  the  trial,  the  defence  turned  principally  upon  the  point  of  for- 

geryofthe  defendant's  name,  as  indorser,  by  Rousmaniere.    Another 

"lioTnt  was  made,  viz.,  that  the  plaintiff  was  not  the  owner  of  the  notes 

1  Arcrd:  (V)ck(.  v.  DIcUciis.  4  V.tk.  L'n,  L'fi  Am.  Dec.  214  (isr^:{).  An  M«cnt 
niMv  sue  In  his  own  iiiuiic  on  n  note  iiidorsi-d  in  lilaiik  and  put  into  his  hands 
for' collc.tlon.  unless  his  il^ht  Is  conl n.vcrtcd  hy  evidence.  Orr  v.  Lacy.  4 
Mclx«an,  24:j,  Fed.  Cas.  No.  lO.HSO  (is IT). 


r/- 


"Oli  KFl'lX'TS    AM)    CONSIXH'I'.NTKS    OF   TlllO    KlOl.Al'lON  (Part    3 

in  c|u,ciJLi.oii,.but  that  Uicy  bclouocd  to  the  Akrj:l}iU.lts.".J^>'i'ilL2.t  New- 
port, by  which  hank  they  were  originally  discounted;  and  that  the 
notes,  since  the  ileatli  of  Rousnianiere  (who  coinniitted  suicide)^  liad" 
beeri  dcliyered  to  theplainliiT  by  the  Merchants'  [5ank  for  llie  purpose 
of  suing  the  same  in  his  own  name  in  the  circuit  court;  and  that 
pTaintilT  had  no  interest  whatsoever  therein.  A  witness,  called  for 
the  plaint  itT,  upon  his  cross  examination,  fully  established  the  latter 
point. 

Storv,  Circuit  Justice.     If  the  facts  stated  by  the  witness  on  this 
last  point  are  not  denied,  I  think  the  cause  is  at  an  end.     Unless 
the  plaintiffjs.  a. real. holder  of  the  ndte.  and  has  some  inlerrst  m  it,. 
he    cannot   maintain    an    action    as    indorsee    a^^;aiiist    ilic    di  fendant, 

_Tj^?reJ:he  pr_oofjs^tliat  tlieJMe r chants ',Iiaiil<  is  the  re  :il  holder,  and 
the  plaintiflf  is  merely  an  agent  forthejjanjv.  ._..I  ta_ke_  it  uotto  be 
competent  for  a  mere  agent  to  maintain  an  action  on  a  neg'odajj^le^ 
note  in  his  hands,  although  it  be  with  the  con^sent"ot""fiis'  principal. 
ITeniust  be  the  owner  of  t.Ue_note^or  have  some'suEstantial  interest 
therein.    Primajacie  indeed  the  possession  of  fi^rh  a  n^t?  if  ^yid^n'"" 

_of  the  ^party's  being  a  holder  for  a  valuable  consideration,  and  unless 
the  note  has  been  previouslj  .stolen,  or  received  by  him  under  sus- 
picious  circumstances,  he  is  not  bound  to  prove  bv  other  evidence. 
that  he  is  such  a  bona  fide  holder.  But  if  it  is  admitted  or  prnved. 
aliunde,  that  he  is  but.a_mere  agent,  and  holds  the  note  j^s  such,  he  is 
not  competent  to  recover  a  judgment  upon  it  m  his  own  name.  See 
Gunn  V.  Cantine,  10  Johns.  387;  Gilmore  v.  Pope,  5  Mass.  491. 
The  plaintiff  discontinued  his  suit. 


;  SARGENT  V.  MORRIS. 

(Court  o|f  King's  Bench,  1820.    3  Barn.  &  Aid.  277,  22  R.  R.  .882, 
5  E.  C.  L.  166.) 

Declaration  stated,  that  the  defendant  was  the  owner  of  a  vessel  ly- 
ing in  the  river  Gaudalquiver,  and  bound  to  London;  and  the  plaintiff, 
at  the  special  instance  and  request  of  the  defendant,  caused  to  be  ship- . 
ped  on  board  the  vessel  certain  goods,  to  be  taken  care  of,  and  safely 
and  securely  conveyed  by  the  defendant  within  the  vessel ^  11"^kr  ^hp 
deck  thereof,  to  London,  and  there  to  be  safely  dplivpred    rlrv  p,nd  wpII. 

^orLclitioned,  for  the  plaintiff;    and  in  consideration  thereof  ^^  3.^4  Q^  ^ . 
certain  freight  to  be  paid  by  plaintiff  to  defendant,  he  undertook  to 
take  care  of  and  safely  convey  the  said  goods  and  merchandizes,  w  ith-, 
in  the  vessel,  and  under  the  deck  thereof,  and  deliver  the  sarjiaa^  ai'oi  e 

__^said.  Breach,  that  the  defendant  placed  and  put  the_goods  Ti]ion  ilie 
deck  of  the  vessel,  and  otherwise  conducted  himself  with  greai  iiegli- 
gence,  by  reason  whereof  the  goods  were  greatly  damaged.  Plea_nor}- 
a'^'^umjjsit.     At  the  trial  before  Abbott,  C.  J.,  at  the  London  sittings 


l/'[/K^ 


Ch.  4)  LIABILITY    OF    THIRD    I>I:HS()NS    TO    THE    AGENT  703 

after  last  Trinitj^  term,  it  appeared  that  the  goods  were  shipped  by 

Bayo  &  Son  of  Seville,  and  that  they  were  the  parties  interested  in  the 

~goo"ds.     By  tlie.bill  of  lading,  the  Captain  acknowledged  t>)  have   rc- 

ceived  6n~boar!lthe  vessel^  and  under  the  deck  thereof,  of  Don  Tedro 

Bayo_&^ii»  the  goods  therein  mentioned ;  and  it  then  proceeded  in  the 

Tollowing  words:    "I  undertake  to  deliver  the  same  to  you,  and  in. 

your  name,  according  to  custom  and  usage,  to  Mr.  Sargent  or  his  as- 

-signsTpaying  freight,"  etc.     The  plainjiff  on   receiving  advice  of  the 

"  shipiilent,  effected  an  insurance  on  account  of  Bayo,  and  advanced  the 

J^remuimiTrTtwas  objected,  that  the  action  ought  to  have  been  brought    ,- 

bvBayo  &  Son,  and  not  by  the  present  plaintiff.    The  Lord  Chief  Jus-  

''~Tice~directed  the  jury  to  find  a  verdict  for  the  plaintiff,  with  liberty  to  / 

the  defendant  to  move  to  enter  a  nonsuit.    A  rule  nisi  having  been  ob- 
tained accordingly. 

BavlEy,  J.    This  is  an  action  on  a  special  contract;    and  the  dec- 
la  ration_^tates,  that  ihe  plaintiff  caused  to  be  shipped  on  board  the  de- 
"^endanFr vessel,  certain  goods,  to  be  carried  and  delivered  to  the  plain- 
""tiflr,  and  that  he  undertook   and  promised  the  plaintiff   accordingly. 
""TTie  declaration  therefore  describes  the  plaintiff  as  the  original  ship- 
"pFr,  and  the  .original  contract  as  having  been  made  with  him.     Now  I 
takTthe  rule  to  be  this  :   if  an  agent  acts  for  me  and  on  my  behalf,  but    / 
in  his  own  name,  then,  inasmuch  as  he  is  the  person  with  whom  the 
contract  is  made,  it  is  no  answer  to  an  action  in  his  name,  to  say,  that 
he  is  merely  an  agent,  unless  you  can  -also  show,  that  he  is  prohibited 
from  carrying  on  that  action  by  the  person  on  whose  behalf  the  con- 
Iract  was  made.    In  such  cases^_ho\yever,  you  may_bring  your  action, 
""either  in  the  name  of  the  party  by  whom  the  contract  was  made,  or  of 
"~lhe  party  for  whom  the  contract  was  made.-     In  policies  of  insurance. 
it  is  a  common  practice  to  bring  your  action,  either  in  the  name  of  the 
agent  or  principal.     In  this  case  the  contract  appears,  by  the  t;erms  of 
the  bill  of  lading,  to  have  been  made  with  the  Spanisli-liouse..    Then 
for  whfMii  was  it  made?  why,  upon  the  evidence  in  the  cause,  on  ac- 


/ 


count  of  the  Spanish  house.     It_^is,  however,  urged,  that  inasmuch  as        / 
Sargent  had  made  certain  advances  on  ^heir  account,  they  were  his,      ^ 
goods  at  the  time  of  the  shipment.    Now^in  the  first  place,  there  is  no 
evidence  to  show,  that,  at  the  time  oj  the  shipment,  he  had  made  any 
advance  whatever.     At  that  tinie,.th.c  right  of  action  was  vested  in  the 


^ 


party  to  whom  the  goods  belonged.    What  was  done  suljsequently  does 
not  affect  this  point.    A's  to  the  advance.  I  take  it  to  have  been  made  in      /  X 

'   ;  ordinary  way  in  which  an^^cnt  niakes  an  advance  f«>r  his  pr^inci  -    ^ 

In  Tliislcy  V.  Dowcll,  S7  Tox.  L'.''.,  'J<5  jTAV.  0  JO  (1^01),  tli'o  coiiil   lays  Howi 
the  rnlf  tliat  yiio  who  rorit nuts  ua  umit  caiiiiot   iiiaiiit.iTii   an  a<Onn   in  lil^ 


,     \\\n  nanic  and  riglit   niinii  the  <onira(i.     To  this  general   rnl.'  fli-ic  ar.'  nmr 

X|   -<*TrpTTr1nns:      H)   \Vh<M-e   th»^  agent  eoiilruels  ill   his  own    n i  '         '  li 

-firrr'rnot  disclose  his  ijrincipal  ^^ho  ia  unlinowu ;  (.*'.)  whirr,  hx  ihc  n  i  ■  ■! 
trfiMe,  thn  agent  is  antliori/.ed  to  act  as  owner  of  llie  pro|ieriy  ;  (ii  win  ic  Ihe 
ntrent  has  an  interest  in  tlie  suhjeet-nialfci:  oT  the  eonlrael,  and  In  this  ease 
Wlictiier  lu'  professed  tfi  aet  as  aurent  or  not. 


/I 


/ 


TO'!  EFFKr'i's  AND  co\si:t.tri:xcKs  of   riii';  i!i:i..\ tion        (Part  3 

pal,  in  respect  of  which  \\c  would  be  entitled  to  sue  liis  priticii^al,  on 

"uTuSse  credit  tlie  ad\aucc  was  made.     if.  indeed,  the  goods  had  rcii-dici 

his  ]iossession.lie  nii,<;ht  have  hail  a  hen  till  he  had  been  repaid;    but 

"~no  lien  can  take  place  till  the  goods  come  into  his  posscssibn.     'i'he 

prospect  of  a  lien  made  in  respect  of  advances  subse(|uent  to  the  ship- 

iiicnt,  never  can  satisfy  the  allegation  of  the  plaintid.  that  he  1iad_ 

caused  the  goods  to  te  shipped,  and  that  the  defendants  edntraelc^ 

"with  him  to  deliver;   the  contract,  in  fact,  was  not  with  him,  Init  witii 

jBaya    For  these  reasons,  it  seems  to  me,  that  the  contract  is  not  made 

out  in  evidence,  and  that  the  action  cannot  be  suiipurted.^ 


MILLER  V.  STATE  BANK  OF  DULUTIL* 

(Supreme  Court  of  Minnesota,   1S94.     57  Minn.  319,  59  N.   W.  309.) 

Suit  by   Miller  for  balance  of  money  deposited  by  him  as  agent. 
Tire  bank  claimed  the  equitable  right  to  set  off  against  the  deposit 
notes  indorsed  by  Simon  Clark  &  Co.  and  held  by  the  bank.    Judgment 
for  plaintiff,  new  trial  denied,  and  defendant  appeals. 
~''    GiLFiLLAN,  C.  J.     Plaintiff  was  agent  for  Simon  Clark  &  Co.r  and. 
as  such,  deposited  money  of  theirs  with  defendant  to  the  credit  of  h.ini- 
self — "A.  J.  Miller,  Agent."    Afterwards  Simon  Clark  &  Co.  made 
an  assignment  in  insolvency.  '  Whether  plaintiff  could  or  could  not^ 
while  his  agency  continued,  maintain  an  action  in  his  own  name  on  the 
deposit,  he  certainly  could  not  after  his  relation  to  the  deposit  ceased 
"~by  the  revocation  oFhis  agency"  wTtli  respect  to  it. .  ^ 
'^''^^Mle  assignrfient  of  his  principals,  Simon  ClarTc  ^  Co.,  worked  such 
revocation.    Order  reversed.  '"' 


//ua/— 


LETERMAN  v.  CHARLOTTE SVILLEyLU]\/BER  CO. 

(Supreme  Court  of  Appeals  of  Virginia,   1910.     110  Va.A§2i  Qfi  S/  E.  281.) 

Assumgsit.    Judgmen;^  for  planitjit. 

Buchanan,  J.-'"'  In  the  viewTwe  take  of  this  case,  the  only  question 
necessary  to  be  considered  is  whether  or  not  the  trial  court  erred  in 
striking  out  the  special  plea  filed  by  Leterman  (the  plaintiff  in  error), 
who  was  defendant  in  that  court. 

One  objection  made  to  the  plea  is  :  "That  the  plea  sets  forth  the  fact 
that  the  contract  between  the  plaintiff  and  defendant  was  entered  into 
by  the  defendant  on  behalf  of  a  firm,  composed  of  himself  and  one 
Alfred  Wollberg,  which  matter  has  been  already  formally  and  finally 

3  The  opinions  of  Alilujtt,  C.  .T.,  and  Best,  .T.,  are  omitted. 

4  Accord:     Sims  v.  P,ond,  5  B.  &  Ad.  389,  2  N.  &  M.  UOS,  27  E.  C.  L.  97  (18.33). 
'  I'art  of  the  opinion  is  omitted. 


Ch.  4)  LIABILITY    OF    THIRD    PERSONS    TO    THE    AGENT  705 

adjudicated  by  submitting  that  question  to  a  jury  at  a  former  term  of 
this  court,  as  is  shown  in  writing  filed  by  the  plaintiff,  by  counsel,  as 
one  of  the  grounds  for  excluding  said  plea." 

The  only  effect  of  the  verdict  of  the  jury  upon  the  issue  raised  by 
the  plea  in  abatement  for  the  nonjoinder  of  Alfred  Wollberg  as  a  party 
defendant  was  to  establish  the  fact  that  the  contract,  for  the  breach  of     _ 
which  the  plaintiff  sought  to  recover  damages,  was  made  with  Leter.-,- 
man  personally,  and  not  with  the  firm  of  Leterman  &  Wollberg,  and[__^ 

■~~Tliat  the  plaintiff'  had  the  right  to  sue  the  former  for  a  breach  of  the 
contract.  It  did  not  determine  that  Leterman,  in  making  that  contract, 
may  not  have  been  acting,  as  averred  in  his  special  plea,  in  behalf  of 
the  firm  of  Leterman  &  Wollberg.    That  question  was  not  involved  in 

the  issue  on  the  plea  in  abatement.   ^An_agent  may  eye-O^become  liable 

on  a  contract  contrary_io.,his  actual  intention;   but,  if  he  contracts  .in / 

such  a  form  or  under  such  circumstances  as  to  make  himself  person-        /^  ^  ^     j^ 
'  ally  responsible,  he  cannot  after\vards,_whether  his  pnncipa!  was  or  "^        ^— "Xi-^^^ 
was"  not  known  at  the  time  of  tiie  contract,  relieve  hrmsel^  of  that  re- 
spdnsTbHity!    2  Clark  &  Skyles  on  Agency,  §  566.  and  cases  cited;    1 

"TVlin.  Irist.  235-237 ;   3  Rob.  Pr.  (New)  54,  and  authorities  cited. 

Another  objection  made  to  the  plea  is  that  it  "attempts  to  set  off  the     / -. 
claim  of  the  partnership  of  Leterman  &  Wollberg  against  the  individ-  -      '^^■y^ 
ual  demand  of  the  plaintiff  against  the  defendant."  ^ 

JWhere  a  person  enters  into  a  simple  contract,  oral  or  in  writing, 
other  than  a  jriegotiable  instrument,  in  his  own  name,  when  he  Is  Tn 
fact  acting  as  the  agent  of  another  and  for  his  benefit,  without  disclos- 
mghTT principal,  the  other  party  to  the  contract  may,  as  a  general 
ruTe,  hold  either  the  agent  or  his  principal,  when  discovered,  personally 
liable  on  th^  contract.  But  he  cannot  hold  both.  1  Min.  Inst.  pp.  236, 
237,  and  cases  cited;  3'Tvob.  Pr.  (New)  50,  and  cases  cited;  Clark  & 
Skyles  on  Agency,  §§  457,  568. 

It  is  also  equally  well  settled  that  upon  such  a  contract  either  the 
agent  or  the  principal  may  sue;    the  defendant,  where  the- principal         -^-"'^ 


' — sues  upon  it,  being  entitled  to  be  placed  in  the  same  situation  at  the      /L 
~1imc  of  the  disclosure  of  the  real  principal  as  if  the  agent  had  been  the 
^contracting  party.     National  Bank  v.  Nolting,  94  Va.  263,  26  S.  K. 
'**gZ6;    3  Rob.'  Pr.  (New)  36,  and  cases  cited;    1  Min.  Inst.  239,  and 

cases  cited  ;  Clark  &  Skyles  on  Law  of  Agency,  §  614.  ^ 

If  the  agent  of  the  undisclosed  principal  be  sued  by  the  oUicr  party / 

to  the  contract,  the  latter  may  recmer  such  damages  as  have  resulted        "^^    } 
from  (he  breach  of  it  on  the  agent's  part.    On  the  other  hand.  If      i  li 
agent  sues,  he  may  recover  such  damages  as  have  resulted  by  rc.ix.n  kA  v. 

the  1)reach  of  the  contract  by  the  other  partyi^oinless  his  principal  in-  V^? 

tcrfcrcs  in  the  suit;   and  he  is  entitled  to  recover  the  full  measure  oF"""'  /r       ^ 

damages  in  the  same  manner  as  though  the  action  had  been  brought  by 
the  princii)al.     See  Clark  &  Skyles  ori^Agency,  §  624;    Mei!ll«lll  Ull 
Goi)r).rR.&  A. — 15 


706  KFFECTS   AND    rOXSKQUENCKS   OK  THK    KICI-ATION  (Part   3 

Agency,  §§  755.  y  03 ;  Joscpli  v.  Knox.  3  Camp.  320  322 ;  Gardner  v. 
Davis.' 2  Car.  &  Payne,  49;  United  States  Tel.  Co.  v.  Gildersleve,  29 
Md.  232.  96  Am.  Dec.  519,  522.  523;  Rhoades  v.  P.lackiston.  106 
Mass.  334,  8  Am.  Rop.  3M,  ^.U,  334;  31  Cyc.  LS64;  Shelby  v.  Bur- 
row, 76  Ark.  558.  89  S.  W.  4()4,  1  L.  R.  A.  (N.  S.)  303,  6  Ann.  Cas. 
554.  and  note." 

There  are  exceptions  to  the  ,Q;encral  jirinciples  of  law  stated  above; 
but  they  do  not  affect  the  question  now  under  consideration,  and  need 
not.  therefore,  be  mentioned. 

Since  either  party  to  the  contract  set  up  in  the  special  plea  had  the 
right  to  sue  the  other  for  its  breach,  if  he  failed  to  keep  and  perform 
it  on  his  part,  it  follows  that  either,  when  sued  by  the  other  for  its 
breach,  had  the  right  to  set  up  as  a  defense,  under  section  3299  of  the 
Code,  any  matter  which  would  "entitle  him  either  to  recover  damages 
at  law  from  the  plaintiff  or  the  person  under  whom  the  plaintiff  claims, 
or  relief  in  equity,  in  whole  or  in  part,  against  the  obligation  of  the 
contract"  sued  on. 

"The  plain  purpose  of  that  section,"  as  said  by  Judge  Moncure  in 
Huff  v.  Broyles,  26  Grat.  283,  285,  "was  to  give  precisely  the  same 
measure  of  relief  on  a  plea  filed  under  the  same  as  could  be  obtained 
in  an  independent  action  brought  for  the  same  cause.  *  *  *  "  See 
Am.  ^Manganese  Co.  v.  Va.  Manganese  Co.,  91  Va.  272,  282,  21  S. 
E.  466;  Columbia  Accident  Ass'n  v.  Rockey,  93  Va.  678,  25  S.  E. 
1009;  Mangus  v.  McClelland,  93  Va.  786,  22  S.  E.  364;  Tyson  v. 
Williamson,  96  Va.  636,  32  S.  E.  42;  Kinzie  v.  Riely,  Ex'r,  100  Va. 
709,  42  S.  E.  872. 

By  section  3303  of  the  Code  it  is  declared  that  a  defendant  who  files 
a  plea  under  section  3299  shall  be  deemed  to  have  brought  an  action  at 
the  time  of  filing  such  plea. 

The  defendant  having  the  right  to  set  up  in  a  special  plea  under  sec- 
tion 3299  any  damages  which  resulted  from  a  breach  of  the  contract 
which  he  could  have  recovered  in  an  independent  action,  the  fact  that 
his  recovery  over,  if  any,  was  for  the  benefit  of  Leterman  &  Wollberg, 
furnished  no  ground  of  objection  to  the  special  plea;  for  it  is  settled 
that,  if  the  agent  of  an  undisclosed  principal  sues,  it  is  no  ground  of 
defense  that  the  beneficial  interest  is  in  another,  or  that  the  plaintiff,  if 
he  makes  a  recovery,  will  be  bound  to  account  to  another.  See 
Rhoades  v.  Blackiston,  supra ;  United  States  Tel.  Co.  v.  Gildersleve, 
supra ;  Joseph  v.  Knox,  supra ;  Seaman  v.  Slater  (C.  C.)  49  Fed.  37 ; 
Clark  &  Skyles  on  Agency,  §  619;  Mecheni  on  Agency,  §  755. 

The  damages  claimed  in  the  special  plea,  as  it  avers,  resulted  from 

e  See  also  the  leading  case  of  Rhoades  v.  Blackiston,  106  Mass.  334,  8  Am. 
Rep.  'i'j-  (1871).  Under  the  Code  provision  that  "every  action  must  be  pros- 
ecuted in  the  name  of  the  real  party  in  intei-est,"  except  that  "a  trustee  of 
an  express  trust  *  ♦  *  niay  sue"  in  his  own  name,  the  agent  who  has 
contracted  in  his  own  name  is  held  to  be  a  trustee  of  an  express  trust.  Con- 
siderant  v.  Brisbane,  22  N.  Y.  389  (1800). 


Ch.  4) 


LIABILITY    OF    THIRD    PERSONS    TO    THE    AGENT 


707 


the  failure  on  the  part  of  the  plaintiff  to  do  the  work,  to  recover  the 
price  of  which  he  brought  his  action,  in  the  manner  and  within  the 
time  provided  by  the  contract,  and  the  defendant  had  the  right,  under 
section  3299  of  the  Code,  to  set  them  up  and  to  get  the  benefit  of  them 
in  this  action  as  fully  as  if  he  had  instituted  an  independent  action  to 
recover  them.  No  prejudice  can  result  to  the  plaintiff  from  compelling 
him  on  his  part  to  answer  for  not  performing  the  contract  to  the  agent, 
whom  he  is  holding  for  its  breach,  instead  of  the  principal.  *  *  * 
Reversed. 


FISHER  V.  MARSH. 

(Court  of  Queen's  Bench,  1SC5.     6  Best  &  S.  411,  11  Jur.  X.  S.  795 

Q.  B.  177,  12  L.  T.  Rep.  [N.  S.]  604,  13  W.  R.  834,  US  E.  C.  L.  411 

Declaration  for  127.  for  the  lease  of  land  by  plaintiff  bj_aug<iqn_on 
tfiFoccasion  of  the  Qxiord  races.     Plea,  never  indebted. 

Blackburn,  J.^     I  am  of  opinion  that  the  nonsuit  sliouldj3e_set 
aside,  and  the  rule  foFTliewJrial  made  absolute.     I  think  there  was 

'a  case  to  go  tolhe  jury  that  the  plaintiff  was  entitled  to  maintain 
the  action^     *     *     * 

~^he  ground  of  the  nonsuit  was  that,  although  there  was  a  letting 
and  occupation  under  it,  the  plaintiff  was  not  the  proper  person  to 
sue;  for  notwithstanding  the  defendant  had  made  himself  liable  to 
the  plaintiff's  employers,  yet  unless  he  was  liable  to  pay  the  plaintiff 
the  writ  was  sued  out  in  the  wrong  name.  But  I  think  there  was  evi- 
dence  of  a  contract  with  the  plaintiff  personafly..  The  i^laijitifiLjYa?. 
-*^incleed~aclmg  a-  ;autlf»neer  and  was  known  to  be  such;  and  this  would 

— be  evidence  that  some  other  person  employed  him,  and  that  he  had 

— iTolnterest  in  the  land  beyond  that  of  letting  it  to  the  highest  bidder. 

— TTTe  general  rule  is,  that  when  an  agent  makes  a  contract,  naming  his 

principaTTlhe  contract  iT  fnacTe"  with  the  prtncTpaT  and  not^yiilf  .tlie'  -^      ■' 

— «;eiiL.     nut  L>>~en  where  tlie  prin^pal  i§  kjLQ.wp.  a  contract  in  writing 

"  may'be WaAc  b\-  an  agent  with  a  third  person  ill  such  terms  that  he  is 

-personally  bound  to  ilic  fulfilment  of  it;   as  if  he  says,  "I  JpL'"^  .2.'^^." 

self  contract."  in  i-  a  personal  contract  by  the  agent, 

and  lie  nv  -liliMUgh  the  priii'--;-'  r---  ■"'■ '•'"'■re. 

^  and  clrTi::  .      .    -  decided  iu  iii;.;^:.  M^ 

K:    \\  .    K>4,    where   the   ea.^es   arc   c(jllecled.      In   the   luoenl   case   the 
plaintiff  on  putting  up  this  laud  for  hire  in  effect  said,  "I,lct.the.j.?ind,;. 
and  1   undertake  upon   tin    piir   being  paid  to  nie  that   the  person 
taking  the  lancT  shall  iiave  the  enjoyment  of  it."    Thcu  the.  defendant 
having  Ijid   for  it,  and  being  the  highest  bidder,  there  is  a  clear  con 
tract  by  the  defendant  to  become  tenant.     The  terms  of  the  contract 
were  not  reduced  to  writing;    but  does  the  fact  of  thtT'pTanifin'  bein^ 
aurtiMnecr-pfevenf  tlie  contract  being  with  him?     If  not,  there  was 


•A 


/ 


'  I'art  of  the  orilnion  is  oniittrd. 


708  EFFECTS    AND    CONSKQUKNOKS   OF   THK    KIU.ATION  (Part    3 

evidence  to ^0 Jo  thejury.  There  are  reasons  in  the  present  case  why 
llie  iiiaTntift"  should  cuter  JutO  th c  con t r acl^^'niak ili g  TT i ni s'cH  pcrsonaJTy^" 
Hahle ;  there  are  also  reasons  why  he  should  not :  but  here  was  evi- 
dence on  which  the  jury  mi^jht  say  that  he  had  done  so,  Jinless  ffie" 
fact  oi__the  plaintiff  being,  auctioneer  is  conclusive  to  the^  contrary. 
In'Franklyn  v.  Laniond,  4  C.  B.  637  (E.  C.  L.'R.  voTSS),  the  plam- 
titT  had  bought  railway  shares  at  an  auction  under  circumstances  much 
like  those  in  the  present  case,  and  in  an  action  against  the  auctioneers, 
who  had  not  disclosed  their  principal  at  the  time  of  the  sale,  for  not 
transferring  the  shares,  the  Court  held  the  proper  inference  to  be  that 
the  contract  was  with  the  auctioneer  personally.  That  is  a  distinct 
authority  that  in  the  present  case  there  was  evidence  of  a  contract 
with  the  plaintiff  personally.^ 

Next,  there  being  such  a  contract,  and  the  defendant  having  been 
let  into  possession  under  it,  may  the  rent  be  recovered  in  an  action 
for  use  and  occupation?  The  plaintiff  having  let  the  defendant  into 
possession  under  the  contract,  the  defendant  would  be  estopped  from 
denying  the  title  if  it  were  requisite  that  it  should  be  proved,  and  the 
case  therefore  turns  upon  the  contract  for  use  and  occup;.'.tion.  In 
Evans  V.  Evans,  3  A.  &  E.  132  (E.  C.  L.  R.  vol.  30),  the  auctioneers 
in  effect  said  that  they  were  selling  for  David  Jones,  whose  name  ap- 
peared on  the  conditions  of  sale  as  approving  them.  Now,  prima 
facie,  when  an  agent  makes  a  contract  for  a  person  named,  the  prin- 
cipal and  not  the  agent  is  considered  as  making  the  contract ;  never- 
theless a  case  was  set  up  on  behalf  of  the  plaintiffs  that  the  auctioneers 
were  the  proper  parties  to  sue,  because  the  contract  was  made  with 
them,  and  they  had  an  interest  in  the  premises  as  creditors  of  their 
principal.  The  Judge  had  told  the  jury  that  the  contract  was  with 
the  auctioneers.  The  Court  thought  that  direction  was  not  correct 
with  reference  to  the  conditions  of  sale,  the  construction  of  which 
was  for  them;  not  that  there  was  no  evidence  to  support  an  action 
for  use  and  occupation  by  the  plaintiffs.  And  they  granted  a  new  trial 
on  the  question  of  fact,  which  was  for  the  jury,  viz.,  "By  whose  per- 
mission did  the  occupation  take  place,  and  by  whom  was  the  contract 
made?"  That  appears  from  the  judgments  of  Patteson  and  Coleridge, 
JJ.  Here  the  question  is  solely  whether  there  was  a  case  to  go  to  the 
jury  that  the  plaintiff  had  made  the  contract  personally,  and  for  the 
reasons  which  I  have  expressed  I  think  there  was.^ 

8  The  rule  extends  to  all  contracts  made  in  the  name  of  the  agent,  whether 
the  prinripal  is  known  or  unknown,  Edwards  v.  Ezi^ll,  2  Willson,  Civ.  Cas. 
Ct.  App.  §  270  (1SS4) ;  Carter  v.  So.  Ry.  Co.,  Ill  (>a.  .".S,  2(j  S.  E.  SOS,  50  L. 
R.  A.  '.i~}A  nOW),  especiallv  if  the  agent  has  a  iK'uclicial  interest  in  the  con- 
tract, Whiteliead  v.  Potter.  20  N.  C.  2.57  (1S44).  Cf.  Evrit  v.  Bancroft,  22 
Ohio  St.  172  (1871),  in  which  the  interest  of  the  agent  was  not  in  the  con- 
tract, but  in  the  coniuiissions  he  expected  to  earn  if  the  contract  was  made. 
Neal  V.  Andrews  (Tex.  Civ.  App.)  00  S.  W.  4.59  (1900). 

»  The  opinions  of  Mellor  and  Shoe,  JJ.,  are  omitted. 


Ch.  4)  LIABILITY    OF    THIRD    PERSONS    TO    THE   AGENT  709 

SHORT  V.  SPACKMAN. 

(Court  of  King's  Bench,  1S31.    2  Barn.  &  Adol.  962.  22  E.  C.  L.  402.) 

Assumpsiljorjiot  deliyeringL.goods.  Atjhe jtrial  before  Lord  Ten- 
terden,  C.  J.,  at  the  sittings  in  London  alter  Trinity  term  1831,  a  ver- 
d':ct  was  foundjor  the  plaintiffs  for  £600.  subject  to  a  reference.    The 

""arbitrator  ma^hi^  award,  and  annexed  to  it,  at  the  request  of  the 

'-"deTendantls.  counsel,  a  statement  to  the  following  effect :  The  plain-  ^ 
tiffs  being  brokers,  and  authorized  by  one  Hudson  to  buy  for  him  . 
twenty  tuns. of  "Greenland  whale  oil,  employed  Bentley,  an  oil  broker, 

~To"make  such  purchase  foj  them.     Bentley_a£pHed  to  the  defendant  .. 

~To~s€H-tharquantity  to  tlTe  plaintiffs.    The" defendant  at  first  refused 
to  sell   to  "the  plaintiffs ;    but,  upon  being  informed  by  Bentley  that 
they  were  purchasing  not  for  themselves,  but  as  brokers  for  unnamed 
principals,  he  agreed  to   sell  to   them;    and  bought  and  sold  notes,     ^ 
signed  by  Bentley,  were  sent  by  him  to  the  plaintiffs  and  defendant,     .. 

-irr-^^ich  the  "goodT'were"  stated' to'"be  "Bought  for  Messrs.   Short,     , 

""  Brown,  and  Bowyer"  (the  plaintiffs),  "of  Mt,  W.  F.  Spackman"  (the  • 
defendant),  on  the  terms  therein  specified  to  be  paid  for  by  the  buyers    - 

— iiTTeady  "money.    The  plaintiffs  sent  a  corresponding  bought  note  to     - 
'Hudson,  their  principal;    and  they  afterwards,  under  a  general  au- 

— thOrity   froirTliim,  sbTcTlTie" "goods   for  lii-   :<cc^wi\.   through  another 

"b^roker,  tVMessis.,  BuclTSlCo^'  The  Iiou.l^Iu   and   sold   notes   in  this 
transaction  mentioned  the  plaintiffs  and  I'-uck  >^  Co..  as  the  Jjy^:ii4; 

— and  selling  parties.  On  this_sale  lieiii;^:  cuniniunicat^d  tQ-Jj-ud.snn,  lie — 
retiirned  the  sold  note,  wtiiclThad  been  sent  to  him,  declaring  that  he  __ 

— would  have  nothing  to  do  with  the  oil  as  purchaser  or  seller;   and  to    , 
isTKeplajntiffs  asseiited.     The  defendant  afterwards  refused  to  de 


liver  tneoiTin  j)ur^uance  of 'bis  agreement^  and  the  plaiuliffs,  being   ._. 

"unable  to  fulfill  tli.  ir  c;i-a-cmeut  with  Buck  &.  Co.,  were  obliged  to    ^ 
— pay  them  a  sum  (A  luuMi^y  m  satisfaction,  the  market  having  risen 
"    smce  the  last-nTentiuiied_cpntract.      It  was   contended,   on   behalf  of      ^ 
the^dgifindant,  that  Hudson's  repudiation  ofthc  contract,  and  ilic  ac- 
quiescence of  the  i)laintiffs  therein,  put  an  end  to  tlic  <"  '  '    "   I'c  ,^ 
twecn  th^  plamflffs  and  defeiiiJiiLUt.     The  aiLiirator.  li'                         of     ^      / 
Opinion  that  these  facts  did  not  affect  either  the  rights  of  the  defendant 
as  against  Hudson,  or  the  rights  and  liabilities  of  the  plaintiffs  and 
defendant.    He  therefore  awarded  that  the  defendant  should  pay  the 
plaintiffs  the  amount  of  the  loss  sustained  by  them  in  their  settlement 
with  Buck  &  Co.    A  rule  nisi  was  obtained  this  term  for  .setting  aside 
the  award,  on  the  ground  that  the  action  was  not  maintainable  ui)on 
the  facts  above  stated. 

Lord  TextekdiCn,  C.  J.     I  had  at  first  some  difficiilixiil  coming  to" 
the  conclusion  that_  the  plaintiffs,  situatcfl  as  they  were  in  UliS-JUaafi*— 

'"could  siielipon  the..cQJi.tract  for  tlieir  own_  benefit.     But  on  looking  to 
the  contract  itself,  there  aj)i)ears  noiTimg  tpi^rcycnl  it.     The  forni.of  .    .._ 


710 


ICKKKCTS   AND   CDNSKQlIKNrKS   OF  TIIK    URLATION  (Part   3 


the  boujiht  note  is,  "I>(night  for  Messrs.  Sliort,  Brown,  and  Bowycr," 
twenty  tuns  of  Greenland  uiUut  so  much  pcrtoJL  to  be  vi\\d  for  by_ 
tlie  buyers  in  ready  money.  The  sold  note  is  in  the  like  fpriTii^  In 
both  the  plaint itTs  appear  as  the  principals.  Tlngjcst  of  the  facts  are 
TIeliors  THe  present  question.  The  rule  will  therefore  be  dischargeoT 
Parkk.  J.  There  was  no  fraud  upon  the  defendant  in  this  casg. 
He  was  informed  that  there  was  an  unknown  princiual.  and  such  was 
Ihe  facj^  It  is  found  that  the  plaintififs  were  authorized  by  Hudson 
buy  the  oil  of  the  defendant,  and  the  contract  was  binding  both 
on  them.  and.  if  the  defendant  chose  to  enforce  it,  on  Hudson.  Then 
it  is  said  the  contract  was  put  an  end  to  by  what  is  called  the  repudia- 
tion on  Hudson's  part:  that  is,  by  his  informing  the  plaintiffs  that 
he  would  have  nothing  more  to  do  with  the  purchase  or  sale,  and 
by  their  acquiescing  in  such  determination.  But  this  is  no  more,  in 
effect,  than  if  Hudson  had  thought  proper  to  sell  the  benefit  of  his 
contract  to  any  other  person,  which  he  might  have  done  without  the 
consent  of  the  plaintiffs:  and  his  doing  so  would  have  been  nothing 
to  the  defendant.^"  It  clearly  would  not  have  determined  the  con- 
tract. I  think,  therefore,  that  the  arbitrator  came  to  a  right  conclu- 
sion.^^ 


STEVENSON  v.  MORTIMER. 

(Court  of  King's  Bench,  177S.     Cowper,  805.) 

Action__for_moiiey  had^and  received,  brought  by  pl^^^ntiiffs,  as  owxt- 
ers"oT~a  boat^carrying  chalk  and  lime,  against  defendant,  as  a  custom 
house  officer,  for  excessive  fees  collected  by  defendant  from  the  mas- 
ter of  the  boat. 

Lord  T^IansfiELD  delivered  his  opinion  as  follows. — The  ground 
of  the  nonsuit  at  the  trial  was,  that  this  action  could  not  be  well  main- 
tained by  the  plaintiffs,  who  are  the  ozviicrs  of  the  vessel  in  question ; 
but  it  ought  to  have  been  brought  by  the  master,  who  actually  paid 
the  money.  That  ground,  therefore,  makes  now  the  only  question 
liefore  us:  As  to  which,  there  is  not  a  particle  of  doubt.  Qui  facit 
I»er  alium,  facit  per  se.  Where  a  man  pays  money  \)y  Ins  ayojt,  which 
ought  not  to  have  been  paid,  either  the  agent,  or  princij-al,  may  bring 
an  action  to  recover  it  baclc_  The  agent  may,  from  the  autliority  of 

"TFie  prTnapaf;    and  the  principaf  fnay,''as'proving  it  to  have  Ixcn  paid 
by  his  agent.    If  money  is  paid  to  a  known  agent,  and  an  action  bidught 

■"against  him  for  it,  it  is  an  answer  to  such  action,  that  he  has  paid  it 
over  to  his  principal.  Sadler  v.  Evans,  4  Bur.  1984,  ante,  p.  G85.  J  Icre_ 
the  statute  lays  the  burthen  on  the  master  from  necessity;   and  makes 


10  As  to  the  right  of  every  man  to  elect  with  wliat  partio.s  he  will  deal, 
and  it.s  effect  on  the  rlKht  of  the  agent  or  principal  to  sue,  .see  post,  p.  794. 
u  The  opinions  of  Taunton  and   I'atteson,  JJ.,  are  omitted. 


Ch.  4)  LIABILITY    OF    THIRD    PERSONS    TO    THE    AGENT  711 

him  personally  liable  to  penalties  if  he  neglects  to  perform  the  requisi- 
~  Liorts  of'-it.    But  still  he  is  entitled  to  charge  the  necessary  fees,  &c.  up- 
on his  doing  so,  to  the  account  of  his  oznierY.    And  in  this  case,  there" 
can  be  no  doiiht  of  the  relation  in  which  the  mastef~stood  to  the  plam- 
— -tjitSl    for^'is  the  icitjicss,  and  he  swears,  that  the  money  was  paid_ 
^by  the  order  oi  the  plaintiffs.     Therefore,  they  are  very  well  war- 
ranted  to  maintain, t'r.       '.     i. — If  the  parties  had  gone  to  trial  upon 

—    'An  apprehension  thai _.   (juestion  to  be  tried  was.  Whether  this 

was  a  case  within  the  act  of  parliament,  consequently,  whether  any 
fee  was  due;  the  plaintiff  could  not  have  been  permitted  to  surprise 
the  defendant  at  the  trial,  by  starting  another  ground,  upon  which  to 
recover  a  Norfolk  groat.  An  action  for  money  had  and  received  is 
governed  by  the  most  liberal  equity.  Neither  party  is  allowed  to  en- 
"^rap  the  other  in  form.     But  here,  the  i-laimiff  gave  tiot ice,  that  he 

meant  to  msist  that  too  much  was  taken;    and  therefore,  both  came 

Co' the  trial  witTi  equal  knowledge  of  the  matter  in  dispute.  There- 
tofore, the  rule  for  a  new  trial  must  be  absolute. — Lord  Mansfield 
added,  that  he  thought,  the  plaintiffs  ought  to  let  the  defendant  know 
the  amount  of  the  excess  which  they  claimed;  that  the  defendant 
might  have  an  opportunity  of  paying  money  into  court;  and  the  rule 
was  drawn  up  accordingly. 


KENT  V.  BORNSTEIN.^2 

(Supreme  Judicial  Court  of  Ma.ssachusetts,  18(36.     12  Alien.  .342.) 

Contract  to  recover  back  $50,  paid  by  plaintiff  to  defendant  in 
change "fgrTa  $50  counterfeit  bill.  Judgment  for  plaintiff  and  defend- 
ant alleged  exceptions. 

— 7jTgelow,C  J.'^  The  facts  of  this  case  do  not  bring  it  within  the 
familiar  principle  relied  on  by  the  defendant,  that  a  mere  agent  or 

"servant,  with  wlnom  a  contract,  either  express  or  implied,  is  entered 
into  in  behalf  of  another,  and  who  has  no  beneficial  interest  in  the 
transaction,  cannot  support  an  action  thereon.  The  plaintiff  had  pos- 
session (jf  inoiKN  JK-loiiging  to  another,  for  a  special  purpose  only.    His 

'autTiorii  ritl\  limited.     Tt  was  confined  to  the,mak;ilg..i?X^ale5. 

of  good-  in  ine  -imc  and  the  payment  of  the  money  received  therefor 
to  a  third  person,     lie  had_n_()  autjioriiN    to  deal  wiili   ilie  ni^iie)-   as 

"Tiis^own,  or  to  appropriate  it  Tor  any  purpose  whatever.     yi^i'ijlX. 

"was  merely  to  receive  it  for  goods  which  he  might  sell  in  the  course 

"of  the  day,  and  to  hold  it  in  his  possession  till  the  hour  for  the  daily 

"payment  of  it  over  to  the  sheriff's  keeper  arrived,  when  he  was  bound 

12  AfTonl:  Holt  v.  Kly,  1  K.  &  I'..  TO."),  17  Jur.  S!i2,  72  K.  C.  L.  7!»r>  (is.i:5). 
In  tlu-  nliscn<»'  of  niistJiUe  or  fiiiml  tin-  iiut'iit  cimnot  .set  up  liis  want  of  au- 
thority in  an  a<tion  against  tin-  third  person.  Yelt»*r  v.  Van  ratten.  KKi  III. 
,\lip.  .">•»  (I'.Ki'ji.  The  third  persi.n  Is  not  accountable  for  the  agent's  fault. 
Wlnkley   V.   Koye.  2.S   N.    II.  .".I.*!   (lHr)4). 

13  I'art  of  tlie  opinion  1h  omitted. 


712  EFFICCTS   AND   CONSKQri:NCi;S   OK  Tin:    UKLATION  (Part   3 

to  pay  it  over  to  him.  Any  act  or  doaliiiLj  with  the  money  beyond 
this  was  outside  of  the  scope  of  his  employment.  lie  had  no  author- 
ity to  enter  into  any  contract  concerning  the  money  in  his  hands,  or 
to  exchange  it  for  other  money  with  third  persons.  An  authority  to 
recfiiY£  the  prociieds  of  sales  in  a  shop  did  not  enipowcr  Jhe  plaintiff 
tojexchange  the  money  received  in  small  sums  for  bills  of  larger  de- 
""liominations  with  persons  who  made  no  purchases  of  goods.  No  evT- 
dence  was  offered  to  show  any  usage  of  business,  ciilicr  general  or 
special^  w'hich  would  authorize  the  inference  that  the  plaintiff's  au- 
thority was  extended  beyond  the  precise  terms  of  his  employment,  so 
as  to  embrace  a  transaction  similar  to  that  which  he  entered  into  with 
the  defendant's  agent. 

_In_Jhia_state  of  the  evidencejjt^  is  clear  thai  the  pj.ajniiff_exe££d£d. 
his  authority  in  exchanging  the  smaller  bills  in  his  possession  for  one^ 

.^  of^the  denomination  of  fifty  dollars,  and  he  is  liable  to  his  employer^ 
for  the  loss  occasioned  by  his  unauthorized  act.  It  does  not  appear 
that  the  transaction  has  been  ratified  by  the  principal.  For  aught  that 
we  can  know,  the  plaintiff  is  still  liable  for  the  amount  of  the  genuine 
bills  w'hich  he  exchanged  for  the  counterfeit  one.  It  cannot  there- 
fore be  said  that  the  plaintiff  has  no  beneficial  interest  in  the  cause  uf 

"Action  on  which  this  suit  is  brought.     On  the  contrary,  it  plainly  ap-- 

pears  that  his  right  to  recover  in  this  action  is  the  onJ[^,j]node  in  which 

he  can  indemnify  himself  against  the  rightful  claim  of  his  employer  for 

the  loss  caused' by  his  abuse  of  the  authority  intrusted  to  him.    *    *    * 

Exceptions  overruled. 


SCHAEFER  v.  HENKEi;. 

(Court  of  Appeals  of  New  York,  1878.     75  N.  Y.  378,  7  Abb.  N.  O.  1, 
57  How.  Prae.  97.) 

Action  upon  a  lease  under  seal  executed  by  "J.  Romaine  Brown, 
Agent,"  as  lessor,  and  by  defendant  as  lessee. 

Miller,  J.^*  The  plaintiffs  were  not  parties  to  the  lease  upon 
which  this  action  was  brought.  It  was  not  signed  by  them.  Their 
names  did  not  appear  in  it,  and  there  was  nothing  in  the  lease  to  show 
that  they  had  any  thing  to  do  with  or  any  interest  in  the  demised 
premises  or  the  execution  of  the  lease,  or  that  it  was  executed  in  their 
behalf.  It  was  made  by  one  Brown,  as  lessor,  who  is  described  tlierp- 
in,  and  who  signed  it  as  agent ;  but  it  is  not  stated  in  the  lease  for 
whom  he  acted.  The  covenants  are  all  between  "J.  Romaine  Brown, 
agent,  the  party  of  the  first  part,"  and  the  defendant,  as  party  of  the 
second  part ;  and  it  is  not  made  to  appear  that  the  defendant  had  any 
knowledge  or  intimation  whatever  that  Brown  was  acting  on  the  be- 
half of  the  plaintiffs  or  for  their  benefit.    For  whom  Brown  was  agent 

1*  Part  of  the  opinion  is  omitted. 


Ch.  4)  LIABILITY    OF    THIRD    PERSONS    TO    THE    AGENT  713 

was  not  made  known  to  the  defendant,  and  it  only  appears  by  parol 

proof  upon  the  trial  that  Brown  was  authorized  orally  by  the  plaintiffs 

to  make  a  demise  of  the  premises  described  in  the  lease.    The  signature 

of  BxQvi:ii.is_as.^gent,  and  his  seal  is  attached  to  the  instrument,  and 

the  same^js_iilsa  signed  and„ sealed  by  the  defendant.  ..The  plaintiffs 

without'any  assignment  of  Brown's  interest  under  the  lease,  bnuij:  il 

*— ScnorTto  recover  the  rent  unpaid,  upon  the  ground  that  Brown  merely 

^-TTfTrd  as  their  agent  by  their  authority,  and  that  they  are  the  actual 

*  -parties  in  interest.    The  question  to  be  determined  is  whether  the  ac- 

"■"Tiaal  owners  of  the  lease,  which  is  in  the  nature  of  a  deed  inter  partes, 

which  was  not  and  does  not  on  its  face  show  that  it  was  executed  by 

them,  but  which  does  show  an  execution  by  a  third  person,  claiming  to 

act  as  agent  without  disclosing  the  name  of  his  principal,  and  which 

contains  covenants  between  the  parties  actually  signing  and  sealing  the 

same,  can  maintain  an  action  upon  it  for  the  rent  reserved  therein, 

even  although  the  person  who  executed  the  same,  describing  himself 

"agent  and  party  of  the  first  part,"  had  oral  authority  to  enter  into  the 

contract,  and  acted  as  the  owner's  agent  in  the  transaction. 

The  rule  seems  to  be  quite  well  established  that  in  yem  ral  an  action 
upon  a  sealed  instrument  of  this  description  must  be  brought  by  and 
— in  the  name  of  a  person  who  is  a  party  to  such  instrument,  and  that  a 
~^2third_£ersoi^ or  a  stranger  to  the  instrument  cannot  maintain  an  action 
upon Jlig_same.     The  question  presented  has  been  tin-  suLjcrt  of  fre- 
'      quent  consideration  in  the  courts,  and  I  think  it  is  e-iahli-liLd  in  this 
state  that  where  it  distinctly  appears  from  the  instrument  executed  that 
""  the  seal  affixed  is  the  seal  of  the  person  subscribing,  who  designates 
himself  as  agent,  and  not  the  seal  of  the  principal,  that  the  former  only 
is  the  real  party  who  can  maintain  an  action  on  the  same.    He  alone  en- 
" — t^s  Thtb  the  covenants  and  is  liable  for  any  failure  to  fulfill,  and  he 
— only'c'an  pr<  ■  '  e  r,(her  party.     He  is  named  in  the  indenture  as 

— a"party,  and  .u.  uv...;a  will  not  lie  on  behalf  of  or  against  any  person 
wlio  ih  not  a  party  to  the  instrument,  or  who  does  not  lawfully  repre- 
""se'nt  or  occupy  the  place  of  such  party.  It  is  unnecessary  to  review  all 
"the  decisions  bearing  upon  the  question,  as  in  a  very  recent  case  the 
principle  discussed  has  been  considered  by  this  court,  and  the  whole 
subject,  as  well  as  the  decisions  relating  to  the  same,  deliberately  and 
carefully  reviewed.  See  Briggs  v.  Partridge.  64  N.  Y.  357,  21  Am. 
Rep.  617.  In  the  case  cited  an  action  was  brought  to  recover  pur- 
chase-money unpaid  upon  a  contract  for  the  sale  and  purchase  of 
lands.  The  complaint  alleged  that  the  plaintiffs  entered  into  an  agree- 
ment in  writing  with  one  Ilurlburd,  who  was  acting  under  the  author- 
ity of  the  defendants,  whereby  the  plaintiffs  sold  and  the  defendants 
through  Hurlburd  bought  a  certain  described  piece  of  land,  for  a  price 
named,  which  price  the  defendants,  through  their  agent.  Ilurlburd. 
agreed  to  pay,  as  specified.  The  agreement  was  in  writing,  but  did  not 
show  that  I'artridge  was  a  principal  party,  and  was  signed  and  sealed 


'? 


^^ 


714  KKiMX-rs  ANi>  (.-oNSKgiKNcKs  nF  TiiK  KKLA'i'ioN        (Part  3 

In-  llurlbunl  iiuliviiluiiUv.  The  name  of  l^irtridge  did  not  apjiear  in 
the  instrunieiil,  l>ul  the  phiiiilifTs  olYered  to  prove  lliat  llurlhurd  was 
acting  solely  for  and  under  the  direction  of  Partridge,  who  made  or 
caused  the  first  payment  to  he  made  as  Partridge's  agent  or  trustee  in 
the  transaction,  and  that  his  authority  was  oral,  i^roof  was  also  of- 
fered to  show  that  1  lurlhurd  was  constituted  such  agent  by  i)arol ;  and 
that  the  plaintitTs  diil  not  know  that  Partridge  was  the  real  principal. 
The  complaint  was  dismissed,  and  it  was  held  by  this  court  that  a  con- 
tract of  this  description  under  seal  could  not  be  enforced  as  the  simple 
contract  of  another  not  mentioned  in  or  a  party  to  the  instrument,  on 
proof  that  the  vendee  named  had  oral  authority  from  such  other  to  en- 
ter into  the  contract,  and  acted  as  agent  in  the  transaction ;  at  least,  in 
the  absence  of  proof  of  some  act  of  ratification  on  the  part  of  the  un- 
disclosed principal.  The  opinion  of  Andrews,  J.,  in  the  case  cited, 
fully  covers  the  question  now  presented ;  and  it  appears  to  be  unnec- 
essary to  review  or  examine  the  prior  cases  which  have  a  bearing  upon 
the  subject.  Unless  some  distinction  of  a  vital  character  exists  be- 
tween that  case  and  the  one  now  to  be  determined,  the  former  must  be 
regarded  as  decisive  of  the  case  at  bar. 

The  claim  of  the  learned  counsel  for  the  appellant,  that  as  the  con- 
tract in  case  of  a  lease  is  not  required  to  be  under  seal,  it  may  be  re- 
garded as  a  simple  contract,  upon  which  the  principal  may  sue  or  be 
sued  in  his  own  name,  and  the  seal  may  be  rejected  as  surplusage,  is 
also  considered  in  the  opinion  in  the  case  cited ;  and  without  indorsing 
the  correctness  of  the  cases  relied  upon,  it  is  remarked  that  these  are 
cases  which  hold  this  doctrine ;  "but  the  principal's  interest  in  the  con- 
tract appears  upon  its  face,  and  he  has  received  the  benefit  of  per- 
formance by  the  other  party,  and  has  ratified  and  confirmed  it  by  acts 
in  pais."  It  is  therefore  settled  law,  that  in  order  to  take  a  case  out 
of  the  generafrule,  where  the  contract  is  one  which  is^alid  withoutlT 
s^eal,  and  the  seal  is  therefore  of  no  account,  it  must  appear  that  the 
contract  was  really  made  on  behalf  of  the  principal,  from  the  inslni-^ 
ment,  and  that  the  party  derived  benefit  from  and  accepted  and  con- 
firmed it  by  acts  on  his  part.  Within  this  rule,  it  remains  to  l)e  con-" 
sidered  whether  the  case  at  bar  differs  from  that  cited.  An  attempted 
distinction  is  sought  to  be  maintained,  for  the  reason  that  in  the  case 
cited,  Hurlburd,  the  agent,  did  not  enter  into  the  agreement  to  sell  as 
agent,  while  here  Brown  signs  as  agent,  which,  it  is  claimed,  is  notice 
of  the  capacity  in  which  he  contracts.  This  we  think  is  not  sufficient ; 
and  to  establish  any  real  distinction  it  should  appear  for  whom  he  was 
agent,  and  that  the  parties  claiming  were  his  principals.  The  plaintiffs 
not  being  named  in  the  lease,  and  it  not  appearing  that  they  had  any 
interest  therein,  there  is  no  more  ground  for  claiming  that  Brown  was 
their  agent  than  that  he  was  the  agent  of  some  stranger.  The  use  of 
the  word  "agent"  has  but  little  significance  of  itself,  and  as  the  prin- 
cipals are  not  named,  cannot  be  regarded  as  applying  more  to  one  per- 


Ch.  4)  LIABILITY    OF    THIRD    PERSONS    TO    THE    AGENT  715 

son  than  to  another.  It  did  not  take  away  from  Brown's  obligation, 
because  he  is  named  as  agent.  The  covenants  are  between  the  parties 
who  are  only  named  in  the  instrument  and  no  other  parties.  Any  oth- 
er interpretation  would  be  a  contravention  of  its  obvious  import.  As 
was  said  in  the  case  cited,  "We  find  no  authority'  for  the  proposition 
that  a  contract  under  seal  may  be  turned  into  the  simple  contract  of  a 
'partynot  in  any  way  appearing  on  its  face  to  be  a  party  to  or  inter- 
ested  in  it,  on  "proof  dehors  the  instrument,  that  the  nominal  party  was 
actmg  as  the  a^cnt  '^t  another."  To  render  the  principal  liable,  where 
fHere  is  acontraci  by  deed,  made  by  an  attorney  or  agent,  it  must  be 
made^n  the  name  of  the  principal.  Huntington  v.  Knox,  7  Cush.  374, 
"~7ited"'aiid  approved  in  Briggs  v.  Partridge,  supra.  It  would  be  going 
very  far  to  hold  that  a  distinction  so  trifling  and  unimportant  would 
authorize  a  disregard  of  the  decision  cited,  and  thus  virtUally  estab- 
lish a  new  and  different  principle  than  one  which  has  been  settled 
thereby.     *     *     * 

Rapallo  and  Allen,  JJ.,  dissent.     Judgment  afiirmed. 


NEFF  V.  BADEN. 

(Court  of  Appeals  of  Kentucky,  1S4:!.    3  B.  Mon.  4GS.) 

BrEck,   J.      Xeff   executed   his   obligation  under   seal,   to   James 

Speed,  lawful  agent  of  Baden,  in  which  it  is  recited  that  Speed,  as  the     ^^ 
'""teWftfrSgenTof  Baden,  leased  to  Neff,  for  the  term  of  ten  years,  a  lot 
hT'The  city  of  Louisville,  and  covenanted,  as  the  agent  of  Baden,  to 
■""tceep  hir]gi,,in  possession.    Neff  covenanted  to  pay  Speed  as  agent,  sev- 
enty-five  dollar^,  jx-r  year,  rent,  payable  one  half  semi-aniuially.    ,The 
i-o\ci,anl  i-  -■::    '!:.}    XrtY  alone, 
—  Upon  that  covenant,  Baden  has  brought  this  action  of  covenant,  and      „ 
assigned  as  a  breach,  the  failure  of  Neff  to  pay  one  year's  rent,  which 
had  become  due.     The  defendant  demurred — the  demurrer  was  over- 
ruled, and  judgment  against  him,  to  which  he  prosecutes  this  writ  of 
error.     -.  '"  '"'""_  ^ 

The  only  question  for  consideration  is,  whether  the  action   can  be        /^ 
maintained  in  the  name  of  1  laden. 

The  covenant  is  expres'-i '1  i"  ['■  '.  aihl  we  arc   clrarl}-  of  opin- 

ion  the  action  caiTnpj^c  m:  >'    linuL  ol  na'leii. 

The  numerous  authorii.  i ad  to  lia\e  Ijlcu  examined,  but  we 

think,  do  not  sustain  the  aeliun. 

Thp  jnd[rnieiit-ii^  therefore  revcrscd^.aiid  causy  remanded,  that  the. 
defendant's  demurrer  may_  be  sustained,  iiud  judgment  thcrcou  rair.  . 
dered  tor  d€fcliTda"iTt7"' '" 


• 


>»Cf.  Pott.s  V.  Hlder,  P,  Oliln,  70,  17  Am.  Der.  HSl  (l.Sl!7).  in  wlii.li  the  m;:<miI 
Hiied  on  a  coveuiint  in  liis  mmmic.  miiiI  Tlinrii  v.  Fnniuiir,  (>  \^.  .Mun.  .'5  ()M."t), 
iu  wlilcli  the  court  .sustained  a  dennirrer  to  an  action  by  an  agent  on  u  tov- 
rnaut. 


7 


716  BFFKCTS   AND    CONSliQL'KNOKS   OF   TllK    UKLATION  (Pait   3 

MORRIS  V.  CLKASBY. 

(Court  of  Kiii«'s  IViuli,  JSi:5.     1  Miiulo  &  S.  570.) 

Declaration:    In  cqnsulcration  that  llic  bankrupts  would  deliyer  to 
the  defonilant  gooTb  to  be  sold  on  account  of  the  bankrupts,  the  de- 

Teiulant  liindertobirto  sell  them,  and  to  render  a  true  and  just  account 
^TTTTe'saTe7and  of  The  monies  arising  therefrom.     Breach  ;  that  the  de- 

"fendant  hath   not  rendered  to  the  bankrupts,  or  to"  the  plalntiiTs  as' 

liiforcsaki^.a  just  atul  true  account  of  the  sale,  or  of  the  monies  arising. 
Second  count,  that  the  bankrupts  had  delivered  goods  to  the  dTTendant 
toT)elspld,  but  the  defendant  had  not  rendered  a  just  account  of  the 
said  goods.  Third  count,  for  not  rendering  a  just  account  after  the  re- 
ceipt of  the  monies  arising  from  the  sale.     Fourth  count,  for  not  ren- 

TTenng  a  just  account  of  the  goods  after  the  sale  thereof.    There  weTie  ^" 
also  the  moncv  counts,  and  an  account  stated.     Plea,  non-assumpsit, 
With  notice  of  set-aii. 

At  the  trial  before  Lord  Ellenborough,  C.  J.,  at  the  London  sittings 
after  Hilary  term,  it  appeared  in  evidence  that  on  the  23rd  October 
1810.  the  bankrupts'^Tdered  the  defendant  (a  broker)  to  purchase  J_o£ 
them,  at  his  public  sale,  a  quantity  of  spirit  of  turpentine  for  exporta.- 
tion.  The  defendant  accordingly  made  the  purchase  for  il090.  7s.  4d^^^. 
wlTicTTwas  agreed  to  be  paid  for  in  bills  at  2  months.  5^e  clefendant 
did  not  mention  to  the  bankrupts  at  the  time  of  the  purchase  the  name 
"^dl  the  seller,  nor  did  it  appear  in  the  bill  of  parcels,  nor  did  the  de- 
'^  fendant  deliver  any  written  paper  containing  the  name;  but  in  fact._ 
"'the  goods  belonged  to  Le  Mesurier  &  Co.,  and  were  sold  by  the...d&: 
fendant  as  their  broker  acting  under  a  del  credere  commission;  but 
""  the  bankrupts  never  authorized  him  to  guaranty  their  house  to  Le 
Mesurier  &  Co.,  or  ever  knew  that  he  had  so  done.  Snon^fter  the 
purchase  the  bankrupts  gave  the  defendant  directions  to  ship  the 
goods,  who  then  for  the  first  time  informed  them  that  Le  Mesurier  &, 
Co.  were  the  proprietors,  and  referred  the  bankrupts  to  them  to  get 
the  necessary  documents  for  shipping  the  goods ;  after  wh\r\^^  |[^g  c}e.- 
fendant  paid  Le  Mesurier  &  Co.  the  price  of  the  turpentine j^buiJljg 
precise  time  when  he  made  this  payment  did  not  appear.  The  bank- 
rujjts  having  had  several  interviews  with  Le  Mesurier,  and  difficulties 
having  occurred  in  procuring  the  shipment,  abandoned  their  resolution 
of  shipping,  and  directed  the  defendant  to  re-sell  the  goods ;  who  ac- 
cordingly re-sold  them  at  different  periods,  the  first  of  which  was  on 
the  27th  November,  and  the  last  on  the  31st  of  December,  1810.  The 
produce  of  the  re-sales  was  £683.  4s.  5d.  Before  the  time  stipulated 
for-the  payment  of  the  turpentine  the  banki-upts  bet  anie  i ml) arrasscd, 
and  on  the  10th' of  January,  1811,  stopped  payment.^  The  question 
was,  whether  the  defendant  was  entitled  to  take  credit  in  his  account 
with  the  assignees  of  Smith  &  Co.  for  the  price  of  the  turpentines  so 
paid  to  Le  Mesurier  &  Co.    His  Lordship  stated  the  rule  to  the  jury 


Ch.  4)  LIABILITY    OF    THIRD    PERSONS    TO    THE    AGENT  717 


to  be  this,  that  a  factor  represents  his  principal  until  tlic  principal  is 
disclosed,  bufwhen  that  is  done,  his  character  of  factor  is  at  an  end, 
and  the  pnhcTpal  hec' 'Uks  ilie  person  lo  be  dealt  wiili.  Uiiiil  iliat  lin 
■"paynients  mrt}-  be  ma<lc  b_\-  the  factor,  and  be  the  .-abject  of  set-olt  by _ 
him  fn  liis  account  with  the  principal.  The  jur\-  found  a  verdict  ^for 
the  pTaintiTF,  without  allowing  the  set-off,  and  in  Easter  term  a  rule 
nisi  for  a  new  trial  having  been  obtained. 

Lord  EllE-N'Bi  C.  J.     In  this  case  I  have  not  seen,  nor  am 

likely  to  see,  any  linng  lo  induce  me  to  alter  my  opinion  as  to  the  right 
of  the  broker  to  receive  payment  until  his  principal  appears.  The  mo- 
ment however  the  principal  does  appear,  provided  it  be  before  pay- 
ment, he  comes  into  his  full  rights  to  receive  it ;  that  is  a  rule  for  the 
protection  of   the  principal.     But  yet  if  the  principal  authorize  his 

""agent  to  receive  payment,  such  paLVinent  will  be  good  a^amsfTTiTn.  So 
under  these  circumstances  if  Cleasby  had  received  pa)nient,  it  would 
"have  been  good ;    for  to  this  extent  we  must  give  effect  to  the  del 

"^credere  commission,  that  it  authorized  him  to  receive  payment,  his 
princij)al  not  having  countermanded  such  authority.  The  only  point  on 
which  the  question  for  a  new  trial  is  to  be  considered,  is  how  far  there 
was  a  rifrht  of  set-off  or  mutual  credit  as  it  regards  the  broker.     If  a 


broker  contiaued  the  presumptive  principal^  unqiiestionabl)  e\  er)  lighi. 


of  set-off  belonged  to  him  which  belonged  to  his  prjncipal,b_iu.3djen^ 
once  the  principal  i:^  disclosed,  the  right  of  set-off  no  longer  continues.^ 


The  question  then  must  stand,  on  the  mutual  credit.  I  wish  to  have  it 
better  ascertained,  whether  this  be  considered  as  a  right  of  set-off  or 
of  mutual  credit,  when  the  disclosure  of  the  principal  took  place.^* 
Rule  absolute. 


HOLDEN  V.  RUTLAND  R.  CO. 

•  (Supreme  Court  of   Vermont,    1901.     7.3    Vt.  317,  50  Atl.   1006.) 

Case  for  neghgcnce  in  the  sale  of  a  mileage  book.    Plea  not  guilty.        / 
Judgment  for  defendant  in  a  directed  verdict. 
'       Watson,  ]}'^   Thc^.niilcagc  book  in  question  was  purchased  of  the 
defendant's  ticket  agent  at  Rurlington  by  the  plaintiff,  as  the  agent  of 
Dana  O.  Coles,  1)ut  flie  j)laiiuiff  did  not  make  known  his  agency  nor 
fTiscl«)se  his  jjriin;;  ,  '       In  selling  such  tickets,  the  purchaser's  namc- 
"**   is  re(juired  to  be  si.L;nc'l  to  the  contract  printed  in  the  back  part  of 
the  book.    The  plaintiff,  being  requested  by  the  ticket  agent  thus  to 
5>igii  ftip  tV)M<~1n"fiur^'i^  ,11.  ^iu;ii(d  his  own  naine  thereto,  instead  of 
♦  '■•'"  "''  '''-  oriiuipal.     \',\   force  uf  the  contract  it  is  the  duty  of  the 
'  nter  the  purchaser's  name  in  the  front  part  of  the 
t'0"K  ;i.s  liiL  per.^(jn  to  whom  the  ticket  is  issued  and  entitled  to  trans- 
portation  thereon.     In  the  place  for  so  doing  the  sclhng  agent  cn- 

loT'ie  opinions  of  I.e  IJIanc  nnd  Bayley,  JJ.,  are  omitted. 
17  I'lirt  of  Uh"  opinion  l.s  omitted. 


o 


(^ 


718  EFFECTS   AND    CONSKC}!' KNCKS   OK  TIIK    UIOLATION  (Part    l> 

tcroil   tlio  name  of  "A.   V .   1  loKlcn,'"   insioail  of  "D.  l'\   llnUlcn,"  the 
jilaiiuifF's  name  signed  in  llic  bat^k  part  of  the^HooF^TKc\]^r'cTja^ 
Tlie  ticket  was  tlien  visaed  by  the  phiintill  in  goin^y  from  jjurhnyton  to 
Rutland  antf  return.    Upon  his  return  he  gave  the  l)Ook  to  Coles,  and 

^paid  him   for  the  numl)er  of  miles  used.     About.lwajilQntlis  after;;;__^ 
wards,  the  plaintilT  hired  the  book  of  Coles,  and,  with,  his  daughtcj, 
attem[nod   to   go   from    r.nrhngton   to   Rutland   on  another  journey. 
The   daughter's  name   had   then   been   inserted   in   tlie   bont  part  oT 
the  book  I)y  Coles  as  a  member  of  the  pm-chaser's  faniil\,  and  a  per- 

"sbn  entitled  to  transportation  thereon.     In  making  this  journey  over 

""the  defendant's  road,  the  plaintiff  offered  the  book  for  t'hp  tran<;pnf[a- 
tion  of  himself  and  daughter,  but  the  conductor  refused  to  accept  it. 

"iTiid  they  rode  without  paying  fare  to  Rutland,  where  the  plaintiff 
was  ajrested  at  the  request  of  the  conductor^  and  detained  for  some 
irttTe  time  before  being  released.  Tlie  plaintiff  cliiiim  that  his  name 
sHould  have  been  entered  in  the  front  part  of  the  book  as  the  person 
to  whom  the  ticket  was  issued,  and  that  to  enter  the  name  ofl^JA..  . 
F.  Holden"  instead  was  negligence  by  the  ticket  agent ;  and,  fur-  _ 
ther,  that  the  damages  suffered  by  the  plaintiff  by  reason  of  the  con- 
ductor's refusal  to  accept  the  book  for  transportation  wire  lln'  result 
of  this  negligence,  for  which  the  defendant  is  liable.  The  ctjurt  be- 
low ordered  a  verdict  for  the  defendant,  to  which  the  plaintiff  ex- 
cepted.    W'as  this  error?  is  the  sole  question. 

The  plaintiff  P^rchasecl^  the^  mileage  book   for   Coles,  twm]  ,a.s  ,Kis 
agent.  Imt  lu'  nt,  iiIk  i-  (Hsclosecl  his"agency  nor  hisprincipak    In  •fhese 
circumstances  it  is  a  well-settle'd "rule  oTTaw  tFat  an  action   for  a" 
breach  of  contract  not  under  seal  may  be  brought  in  the  nauic  of    . 
either  the  agent  or  the  principal, — in  the  name  of  the  agent  because 
he  has  been  treated  by  the  defendant  as  the  other  party  to  the  con- 
tract;   in  the  name  of  the  principal  because  he  is  tlie  person  rcalK 
interested  in  the  contract,  for  wdiose  benefit  it  was.=.ma..dej_aml  wilb 
whom  it  is  considered  in  law  as  made.     Dicey,  Parties,  136;    Sims  v. 
Bond,  5  Barn.  &  Adol.  393;   Lapham  v.'Green,  9  Vt.  407.     r.ul  that 
this  rule  of  law  shall  not  be  so. exercised  as  to  work  anjnjiijriifx  ju.  - 
^He~otIier  party  to   the  contract,   other  rules   incident   thereto   are 
equally  w-ell  established.    One  of  these  is  that,  if  the  action  is  brought 
by  the  agent  in  his  own  name,  the  defendant  may  avail  himself  of    , 
^  j     ''those  defenses  which  are  good  against  the  agent  who  is  tlie  plaintilT 

r  /  /  '  r  ^  record;  also  of  any  defense  that  would  be  good  against  thejjrin- 
cipal  in  whose  interest  the  action  is  brought.  Dicey,  Parties,  142; 
2  Smith.  Lead.  Cas.  428.     *     *     * 

When  the  plaintiff  hired  the  book  to  make  the  journey  in  question, 
he  informed  Coles  that  his  daughter  was  going  with  him,  whereupon 
her  name  was  inserted  in  the  book,  as  before  stated.  Assuming  that 
her  name  might  properly  have  been  there  inserted  as  a  member  of 
the  purchaser's  family,  thereby  entitling  her  to  transportation  upon 
the  ticket,  under  the  provisions  of  the  contract  it  could  be  done  only 


h-j 


Ch.  4)  LIABILITY    OF    THIRD    PERSONS    TO    THE    AGENT  719 

by  the  ticket  agent  at  the  station  \vhere  the  ticket  was  sold.    Neither 
the  plaintiff  nor  Coles  had  any  right  _sp_to  insi:rtit  _ *.  ,*     *~ 
"*"   This  defense  being  available  in_an  action  brought  by  the  agent  in^ 
his  own  name,  tlie  verdict  was" properly  ordered.     Let  judgment  be 
affirmed.  ^^ 


SECTION  2.— IN  TORT 


FAULKNER  v.  BROWN. 

(Supreme  Court  of  Judicature  of  New  York,  18.34.  13  Wend.  6.3.) 
Error  from  the  Schenectady  common  pleas.  Faulkner  had  in  his 
possession  a  quantity  of  leather,  belonging  to  one  Van  Slyck,  who 
had  left  the  same  with  him,  and  requested  him  to  take  care  of  it. 
It  was  stolen  from  the  possession  of  Faulkner,  and  sold  by  the  thief 
to  Brown.  Faulkner  demanded  the  leather  of  Brown,  and  on  his 
refusal  to  deliver  it  up,  brought  an  action  of  trover  against  him  in  a 
justice's  court.  The  justice  being  of  opinion  that  Faulkner  was  not 
entitled  to  maintain  an  action  for  the  leather  in  his  own  name,  ren- 
dered judgment  against  him  for  costs.  The  common  pleas  of  Schen- 
ectady affirmed  the  judgment  on  certiorari,  and  the  plaintiff  sued  out 
a  writ  of  error. 

Savage,  C.  J.    Both  courts  were  clearly  wrong.    To  maintain  tro- 
ver, the  plaintiff  must  have  the  general  or  special  property.     The,. 

■'plaintiff  jiere  had  a  special  property  in  the  leather;  Van  Slyck  had 
the""gcneral  proDcrtv.,  The  action  may,  in  most  ca-rs,  be  br.uiglit 
either  by  the  general  or  special  owner  ni  the  goods  for  a  conversion 
by  a  stranger,  andjviclgment  obtained  by  unc  is  a  good  bar  to  the 
action  of  the  other.    2  Saiind.  47,  e.     Possession  under  Jii£_ri.£^ul 

"~  owner  Is  'sufficient  against  a  person  having  no  color  of  right — .Aji., 
~  agister^  a  carrier,  a  (actor,  rnay"  bring  trover ;    even  a  general  bail- 

— »i^n^  »'.ll  Qnl4irp\^f]R7;7it  heingr  macjp  inr;  ^pv  spprial  nnrnose.  but  only 

"  tor  the  bTnefiTof  Jhe  Herhtful  owner.  Here  is  a  general  bailment. 
It  would  be  monstrously  inconvenient  if  a  wrongdoer  couTcf  come 
and  take  things  out  of  the  possession  of  him  who  had  the  possession 
under  the  rightful  owner.  Sutton  v.  Buck,  2  Taunt.  309,  per  Cham- 
bre,  Justice.  Though  a  mere  servant  has  not  such  a  speci_ai_L>rgpcrt.y. 
as  will  enable  InirrTcrmaintain  trover,  yet  a  bailee,  or  trustee,  or  any 

"""rrSiiPaisoV  Uosser  v.  I>anl«'n.  Sl»  (Jn./liU).  7  S.  E.  910.  14  Am.  St.  Kt'P. 
1.'32  (UssS).  in  wliirh  tlie  priii<iiPiil  niid  iyl'<'iil  a;rn'cd  to  Uccp  (he  aj-'ciiry  sc- 
«Tet.  I'.alt*..  Coal  Tar  Co.  v.  Fl.l.li.-r. /u  Md.  liss  (1SS4);  Saladiii  v.  .Mit- 
clH'll.  4."i  111.  ?'.»  (IstiT).  In  \vlii<!i  pari  lyyiiiciil  was  made  to  the  a;;»'iil  Itrloie 
the  prlii.ipal  was  disclosed;  r.inwii  /.  .Morris,  s:5  N.  C.  251  (ISMH.  where 
the  thlril  person  paid  the  au'eiit  iin<hy  a  inisaiiiirehenslon  not  indiKtd  hy  the 
prlnelpjil.  iind  then  set  uj>  this  payni/nt  \>y  way  of  eounlerclaim;  and  Girurd 
V.  TaK-art.  n  Ser^'.  &  K.  It),  I)  Am.  I)e<'.  '.','21  (1818). 


7120  KFFKCTS   AND    CONSKQUKNCKS   OF   'nilC    IJIOI.ATION  (Part   3 

j^ithcr^pcrsoji  nvIio  is  rosponsiMc  to  his  principaJ,__nuiy  inaiiiJiiuL.tlie 
action,  and  the  la.\Y.fuL.p,ossession  of  the  goods  is  prima  facie  evidence 
of  property.     Dvcr  v.  Vandciibcrgh.  11  Johns.  149.  n.  2  v^aund.  47; 

"1  East.  244;  4  East,  214;  1  Salk."2')0;  Cro.  Eliz.  819;  Hotchkiss  v. 
McN'icjvar.  12  Johns.  407,  per  Spencer,  J.  Tlie  defendant  may, 
nndoulitedly,  show  a  paramount  title  in  a  tliird  person,  Schermerhorn 
V.  Wtu  \'olkenlnirgli.  11  Johns.  529,  but  in  this  case  the  plaintiff  is 
the  bailee  of  the  general  owner.  Numerous  other  cases  might  be 
cited,  but  they  are  umiecessary. 
Judgment  reversed. 

PORTER  V.  SCHENDEL.'* 

(Supreme  Court  of  New  York,  Appellate  Term,  1S99.    25  Misc.  Rep.  779, 
55  N.  Y.   Supp.  C02.) 

Per  Curiam.     We  have  carefully  examined  the  evidence  in  this 
case,  and  have  come  to  the  conclusion,  that  there  was  sufficient,  if 
credited,  to  sustain  a  finding  that  the  injury  to  p roper ty_caniplaitt€d— 
of  was  caused  by  the  negligence  of  the  defendant.    It  wag4ierii1i^rly 
the  province  of  the  court  below  to  determine  what  crediLalionid  be — 
given  to  the  witnesses  on  the  trial,  and  we  see  no  reason  foiLX£3aeAs^-- 
_ing  his  judgment  on  this  question. 

We  are  further  satisfied  that,  although  the  plaintiffs  were  not  the 
general  owners  of  the  goods  which  w^ere  injured,  it  was  competent 
for  them  to  recover  the  damages  so  suffered,  in  an  action  instituted 
by  them  in  their  own  names.  They  were  factors,  having  possession 
of  the  goods  in  question  for  sale,  and,  by  special  agreement,  were 
guarantors  of  the  purchase  money  on  sales  made  by  them.  They 
were  also  bound  to  incur  certain  expenditures,  for  which  they  were 
entitled  to  be  reimbursed,  and  they  were  also  to  receive  an  agreed 
commission  on  such  sales.  There  was  some  evidence  in  the  case 
tending  to  show  that,  at  the  time  of  the  injury  complained  of,  the 
consignors  or  general  owners  of  the  property  were  indebted  to  them 
on  open  account  with  respect  to  these  matters.  For  the  amount  so 
due  the  plaintiffs  undoubtedly  had  a  lien  on  the  goods  in  their  hands. 
Story,  Ag.  §  34.  They  had,  therefore,  a  special  property  therein^, 
coupled  with  the  possession  of  the  goods,  sufficient  to  support  their 
right  to  institute  such  an  action  as  this;  and  the  recovery, of  tHe~ 
judgment  here  will  be  a  bar  to  any  action  which  might  hereafter  be 
brought  by  the  general  owner,  to  whom  it  is  the  duty  of  the  plaintiffs 
to  account  for  the  amount  realized  by  them  in  this  action.     1  Am. 

19  Accord:  Williams  v.  Millinffton,  1  H.  Bl.  9,1  (ITSS).  The  agent  in  pos- 
session of  property  may  maintain  trespass  against  a  wrongdoer.  Taylor  v. 
Hayes,  G.'i  Vt.  475,  21  Atl.  (JIO  (IM)l^.  But  see  (ialvcston,  Ii.  cV:  S.  A.  liy.  Co. 
V.  .*^toikton,  15  Tex.  Civ.  Ajip.  145,  'AH  S.  W.  047  (1MJ7),  which  holds  that,  if 
plaintiff  by  his  own  pleadings  or  evidence  shows  that  he  holds  as  agent,  the 
action  must  be  in  the  name  of  the  principal. 


Ch.  4)  LIABILITY    OF    THIRD    PERSONS    TO    THE    AGENT  721 

&  Eng.  Enc.  Law  (2d  Ed.)  p.  1166;  Faulkner  v.  Brown,  13  Wend. 
63 ;  Gorum  v.  Carey,  1  Abb.  Prac.  285 ;  Mechanics'  &  Traders'  Bank 
V.  Farmers'  &  ^lechanics'  Nat.  Bank,  60  N.  Y.  40,  52. 

The  judgment  in  favor  of  the  plaintiff  must  be  affirmed.  Judgment 
afhrmed,  with  costs.  . 

MORAN  V.   DUNPHY. 

(Supreme  Judicial  Court  of  Massachusetts,  1901.    177  Mass.  485,  59  N.  E.  125, 
52  L.  R.  A.  115,  83  Am.  St.  Rep.  289.) 

Tort  on  two  counts,  first,  that  defendant,_with_  intent  to  injure 
plaTntiff  and^induce  and  instigate  his  employer  to  discharge  him,  did 
maliciously,  willfully  and  wrongfully,  by_c.ej:tain  slanderous  charges, 

"^nduceXnd  ins"tTgate  the  said  employer  to  discharge  plaintiff;  second, 
that  Treten^iit,  with  intent  to  injure  plaintiff  and  to  induce  the  said 

""employeFTo'dlschafge  1111117  did  maliciously  and  wrongfully  induce 
said  empToyer  to^discTiafge  him,  etc.     The  case  came  up  on  appeal 

"~Tro"m' a "judgfnent  sustaining  defendant's  demurrer. 

Holmes,  "C.  J.  The  first  count  of  the  declaration  in  this  case  sub- 
stantially follows  the  form  held  bad  in  May  v.  Wood,  172  Mass.  11, 
51  N.  E.  191,  and  Rice  v.  Albee,  164  Mass.  88,  41  N.  E.  122,  and  the 
plaintiff's  argument  is  directed  to  getting  those  cases  overruled.  It 
appears  in  the  Reports  that  the  later  decision  did  not  command  the 
assent  of  all  of  us,  and  it  is  quite  possible,  at  least,  that  if  the  ques- 
tion came  up  now  for  the  first  time  the  majority  might  be  found  to  be 
on  the  side  which  did  not  prevail.  Van  Horn  v.  Van  Horn,  56  N.  J. 
Law,  318,  319,  28  Atl.  669.  But  it  is  not  desirable  that  decisions 
should  oscillate  with  changes  in  the  bench,  and  we  accept  what  was 
decided  as  the  law.  Still  we  deem  it  proper  to  call  attention  to  the 
fact  that  the  cases  cited  go  only  to  a  point  of  pleading.  What  they 
decide,  so  far  as  they  bear  on  the  present  case,  is  merely  that  the 

—  substance^  of  false  statements  by  which  a  defendant  is  alleged  to  have 
induced  a  tTiird  person  to  break  or  end  his  contract  must  be  set  oiit.. 
^~That  wc^  accept.    But  in  view  of  the  scries  of  decisions  by  this  court, 
from  Walker  v.  Cronin,  107  Mass.  555,  through  Morasse  v.  Brochu, 
151  Mass.  567,  25  N.  E.  74,  8  L.  R.  A.  524,  121  Am.  St.  Rep.  474; 
Tasker  v.  Stanley,   153  Mass.  148,  26  N.  E.  417,  10  L.  R.  A.  468; 
Vegelahn  v.  Guntner,   167  Mass.  92,  44  N.   E.   1077,  32  L.  R.   A. 
722,  57  Am.  St.  Rep.  443;    Hartnctt  v.  Association,  169  Mass.  229, 
47  N.  E.  1002.  38  L.  R.  A.  194;  and  Wcslon  v.  Barnicoat,  175  Mass. 
454,  56  N.  E.  619,  49  L.  R.  A.  612— to  Plant  v.  Woods,  176  Mass. 
492,  57  N.  E.  1011,  51  L.  R.  A.  339,  79  Am.  St.  Rep.  330.  wv  axwuA_ 
aflmit  a  doubt  that  maliciously  and  without  justifiable  cause  t"  in<lnce_ 
"aTtrtnl  peTsorTto  etid  his  emploVmnn  of  tlic^pTaTtTfiff,  'whctiiLr  ilu-  in- 
ducement be  lalse  slanders  or  successful  persuasion,  is  an  actionable. 
06T)uTr.&  a. — It; 


\ 


7-L*  KFriX'TS   AND    CHINSKQUENCKS   OF  THK    KKI.A'riON  (Part   3 

tort.     See.  also,  Angle  v.  Railway,  151  U.  S.  1,  13,  14  Sup.  C"t.  240, 
38  L.  Kil.  55. 

\\c  approhoiul  that  tlioro  no  longer  is  any  difTiculty  in  recognizing   ,. 
that  a  right  to  be  protected  from  malicious  interference  may  be  inr„. 
~cident  to  a  right  arising  out  of  a  contracl,  although  a  contract,  so  far_^ 
'^Xs  performance  is  concerned,  imposes  a  duly  only_onJ.ll9J?I!^'21?i2£: 
"^"gain.  in  the  case  of  a  contract  of  employment,  even  when  the  em- 
ployment  is  at  will,  the  fact  that  the  employer  is  free  from  liability , 
for  discharging  the  plaintiff  does  not  carry  with  it  immunity  to  the 
defendant  who  has  controlled  the^mployer's  action  to  the  plaintifif's,, 
~Tiarm7    The  noTiLm  that  the  eiiipToyer's' immunity  must  be  a  noncon- 
ductor, so  far  as  any  remoter  liabihty  was  concerned,  troubled  some 
of  the  judges  in  Allen  v.  Flood  [1898]  App.  Cas.  1,  but  is  disposed 
of  for  this  commonwealth  by  the  cases  cited. -*>     See,  also.  May  v. 
Wood.  172  Mass.  11,  14,  15,  51  N.  E.  191.     So,  again,  it  may  be 
taken  to  be  settled  by  Plant  v.  Woods,  176  Mass.  492,  501,  502,  57 
N.  E.  1011,  51  L.  R.  A.  339,  79  Am.  St.  Rep.  330,  that  motives  may 

20  The  principle  of  liability  in  snch  cases  is  thus  stated  by  Brett,  L.  J.,  in 
Bowen  y.  Hall.  6  Q.  B.  D.  33.3,  45  J.  P.  :'.7:'.,  50  L.  J.  Q.  B.  305,  44  L.  T.  Kep. 
X.  S.  75.  L»9  W.  R.  3(57  (1S81)  (quoted  with  approval  in  Chipley  y.  Atkinson. 
23  Fla.  206,  1  South.  934.  11  Am.  St.  Rep.  3G7  [1SS7]):  "WHiereyer  a  man  does 
an  act  which  in  fact  and  in  law  is  a  wrongful  act,  and  such  an  act  as  may 
as  a  natural  and  probable  consequence  of  it,  produce  injury  to  another,  and 
which  in  the  particuhir  case  does  produce  such  injury,  an  action  on  the  case 
will  lie.  That  if  these  conditions  are  satisfied  the  action  does  not  the  less 
lie  because  the  natunil  and  probable  consequence  of  the  act  complained  of 
is  an  act  done  by  a  third  person,  or  because  such  act  so  done  by  a  third  per- 
son is  a  lireach  of  duty  or  contract  by  him.  or  an  act  illegal  on  his  part,  or 
an  act  otherwise  imposing  an  actionable  liability  on  him.  That  though  it 
has  been  said  the  law  implies  that  the  act  of  the  third  party,  being  one  which 
he  has  free  will  and  power  to  do  or  not  to  do,  is  his  own  wilful  act,  and  there- 
fore is  not  the  natural  and  probable  result  of  the  defendant's  act,  and  though 
this  may  be  so  In  many  cases,  yet  if  the  law  were  so  to  imply  in  every  case 
it  would  be  an  implication  contrary  to  manifest  truth  and  fact.  That  though 
it  has  been  said  that  if  the  act  of  the  third  person  is  a  breach  of  duty  or 
contract,  or  is  an  act  which  is  illegal  for  him  to  do,  the  law  will  not  recog- 
nize that  it  is  a  natural  or  i)robable  consequence  of  the  defendant's  act;  yet, 
if  this  were  so  held  in  all  cases  the  law  would,  in  some  instances,  refuse  to 
recognize  what  manifestly  is  true  in  fact.  *  *  *  That  merely  to  persuade 
a  person  to  break  his  contract  may  not  be  wrongful  in  law  or  fact,  still,  if 
the  persuasion  be  used  for  the  indirect  purpose  of  injuring  the  i)hiintiff  or 
of  tenetiting  the  defendant  at  the  expense  of  the  plaintiff,  it  is  a  malicious  act, 
which  in  law  and  in  fact  is  a  wrongful  act.  and  therefore  an  actionable  act, 
if  injury  issues  from  it.  *  *  *  That  it  cannot  l)e  maintained  that  the 
breach  of  contract  is  not  a  natural  and  probable  conse(iuence  of  the  act  of 
persuading  the  third  person  to  break  his  contract;  the  breach  is  not  only 
the  natural  and  probable  conse(iuence  but  by  the  terms  of  the  proi)osition 
whi<h  involves  the  success  of  the  i)ersuasion,  it  is  the  actual   conseiiuence." 

The  same  rule  has  been  ext<'n(led  to  a  libel  which  injured  the  agent's  busi- 
ness. Weiss  V.  WJiittemore,  28  Mich.  366.  No  liability  attaches  if  the  act  of 
the  tliird  person  was  one  he  had  a  legal  right  to  do,  whatever  the  mutlve, 
and  whatever  the  effect  on  the  agent.  Kaycroft  v.  Tayntor,  6S  Vt.  210,  .35 
Atl.  5."'.,  33  L.  R.  A.  225,  54  Am.  St.  Rep.  882.  A>s  to  the  rule  in  Kligland,  set* 
the  leading  case  of  Allen  v.  Flood  11808]  A.  C.  1,  77  L.  T.  Rep.  N.  S.  717,  67 
L.  J.  (i.  U.  110,  14  ']'.  L.  Rep.  125,  46  W.  R.  258,  and  the  discussion  of  the 
same  in  1  Mich.  Law  Rev.  28, 


Ch.  4)  LIABILITY    OF    THIRD    PERSONS    TO    THE    AGENT  723 

determine  the  question  of  liability;  that,  while  intentional  interfer- 
ence of  the  kind  supposed  may  be  privileged  if  for  certain  purposes, 
yet,  if  due  only  to  malevolence,  it  must  be  answered  for.  On  that 
point  the  judges  were  of  one  mind.  See  176  Mass.  504,  57  N.  E. 
1011,  51  L.  R.  A.  339,  79  Am.  St.  Rep.  330.  Finally,  we  see  no_ 
sound  distinction  between  persuading  by  malevoTent  a d vice^aTi 3~]ac r„ 
-CDTTTpHs-htng  the  same  result  by  falsehood  or  putting  in  fear.  In  all 
TasesTlie  employer  is  controlled  through  motives  created  by  the  de- 
fendant for  the  unprivileged  purpose.  It  appears  to  us  not  to  matter 
which  motive  is  relied  upon.  If  accomplishing  the  end  by  one  of  them 
is  a  wrong  to  the  plaintiff,  accomplishing  it  by  either  of  the  others 
must  be  equally  a  wrong. 

It  follojA,^  from  what  we  have  said  that  wc  arc  of  opinion  that  both 
counts  oj  the~cIeclaration  disclose  a  good  cause  of  action,  although 
the  first,  on  the  authority  of  May  v.  Wood,  172  Mass.  14,  51  N.  E. 
191,  must  be  held  insufficient  in  point  of  form.  The  second  is  not 
within  the  authority  or  reason  of  that  case,  and  is  in  a  form  similar  to 
the  third  count,  which  was  held  good  in  Walker  v.  Cronin.  See 
Lumley  v.  Gye,  2  El.  &  Bl.  216.  As  to  that  the  demurrer  will  be 
overruled.  As  to  the  other  the  demurrer  will  be  sustained,  but  it 
seems  to  us  that  under  the  circumstaiices^  the  plaintiff^  should,  be., 
given  an  "opportunity  to  amend. 

Demurrer  to  first  count  sustained.     Demurrer  to  second  count 
overruled. 


A 


I 


/ 


C/v 


I. 


724i  EFFECTS   AND   CONSEQUENCES   OF  THE    UEI.ATION  (Part  3 

CHAPTER  V 
LIABILITY  OF  PRINCIPAL  TO  THIRD  PERSON 


SECTION  1.— FOR  THE  AGENT'S  CONTRACTS 
I.  Disclosed  Principai, 


WEBSTER  V.  CLARK. 

(Superior  Court  of  Judicature  of  New  Hampshire,  1855.    30  N.  H.  245.) 

Assumpsit  on  an  account  annexed  to  the  writ  amounting  to  $260.22. 
Verdict  for  plaintiff.    _ 

Eastman,  J.^  We  cannot  entertain  any  doubt  of  the  competency 
of  the  evidence  to  show  Neal  to  be  the  agent  of  the  defendant.  He 
occupied  a  store  on  which  was  the  sign  of  "Jo^''"  T.  Ncal,  Agent. 
On  his  cards  and  bills  he  was  designated  in  the  same  way.  To  the 
witness,  who  inquired  of  him  for  whom  he  was  agent,  he  made  a  reply 
"which  induced  the  witness  to  call  upon  Clark,  and  inquire  of  him  if 
"Neal  was  his  agent,  and  upon  the  inquiry  being  thus  made,  Clark 
frankly  answered  that  he  was.  He,  moreover,  agreed  that  goods 
might  be  sent  to  Neal,  as  he  had  desired.  It  also  appeared  that  Clark 
was  frequently  in  and  out  of  the  store,  engaged  in  conversation  with 
Neal.  This  plain  admission  of  the  defendant,  coupled  with  the  other 
circumstances,  was  entirely  competent  to  show  the  agency,  and  thus 
settle  the  first  exception  taken  at  the  trial.  It  is  unnecessary  to  ex- 
amine it  further,  as  it  appears  to  be  yielded  in  the  argument. 

Neal's  agency  being  thus  established,  it  follows  that  whatever  he 

might  do  within  the  legitimate  scope  of  that  agency  would  bind  the 

lli'  I      V-*  defendant,  as  much  so  as  if  done  by  himself.^  Story  on  Agency,  § 

\\\    V^      '-     -n26rPaIey'on  Agency,  200;  2  Kent's  Com.  620;   Lobdell  v.  Baker, 

1  Mete.  (Mass.)  202,  35  Am.  Dec.  358 ;  Towle  v.  Leavitt,  3  Foster's 

Rep.  374. 

Before  any  goods  were  sent,  the  defendant  informed  the  plaintiff,'s_ 
clerk  that  Neal  was  his  agent,  and  that  the  plaintiffs  might  send 
goods  to  Ncal.  Neal,  as  the  defendant's  agent,  accordingly  ordcre£^ 
several  bills  of  goods,  and  afterwards,  between  the  ordering  of  each 
bill,  stated  that  he  had  received  the  goods,  although  he  did  not  spec- 
ify the  quantity.  These  acts  and  admissions  of  Ncal  w.e^re  those.jT 
Clark,  and  were  competent  to  show  "that  he  had  ordered  goods  of  the 

1  Part  of  the  opiiiion  is  omitted. 


-7 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  725 

plaintiffs,  and  had  also  received  goods.  .  The  evidence  was  sufficient 
to^iarge  the^defendant  for  some  goods ;  for  at  least  a  nominal  sum, 
if  nojiiore. .  *     *     * 

Judgment  upon  the  verdict. 

BRENNER  v.  LAWRENCE. 

(Supreme  Court,  Trial  Term,  New  York  County,  1S99.     27  ISIlsc.   Rep.   755, 

58  N.  Y.  Supp.  769.) 

McAdam,  J.     The  defendants  conducted  a  banking  house  under 
the  name  of  Lawrence  &  Simonds.    They  were  indebted  to  the  plain- 

""liflF  in  the  sum  of  $425,  and,  plaintiff  calling  upon  them  for  the  money, 

they  instructed  their  cashier  to  make  out  a  check  in  favor  of  the      

plaintiff  for  the  amount  due.    The  cashier,  according  to  the  custom       ^^ 
of  bankers,   drew   a   check  uporniTs~prihcipals,  signing  it  "H.   M.      "^ 

"~~1^oore,  Cashier."     The  defendants  failed  shortly  afterwards,  so  that 
' — the  check  was  not  p^aid,  and  the  action  is  against  the  defendants  as  ,-> 

drawers  of  the  check  to  recover  the  amount  due.  The  act  of  Moore, 
according  to  the  plain  intention  of  the  parties,  was  the  act  of  the  de- 

'  fendants,  done  in  their  business,  by  their  direction,  for  their  benefit, 

' ^and  bound  them  as  effectually  as  if  the  check  had  been  signed  by 

the  defendants  themselves.  Elwell  v.  Dodge,  33  Barb.  336;  Bank  of 
the  State  v.  Muskingham  Branch  Bank,  29  N.  Y.  619 ;  Lockwood  v. 
Coley  (C.  C.)  22  Fed.  192;  Melledge  v.  Iron  Co.,  59  Mass.  (5  Cush.) 
158,  51  Am.  Dec.  59;  Houghton  v.  Bank,  26  Wis.  663,  7  Am.  Rep. 
107.  Whether  in  the  hands  of  a  bona  fide  third  person,  having  no 
knowledge  of  the  facts,  the  signing  by  Moore  would  hold  him  indi-  \^ 
vidually  (the  word  "cashier"  being  regarded  merely  as  descriptio 
personse)  is  a  question  that  need  not  be  considered,  for  the  plaintiff, 
who  had  the  transaction,  sues  upon  it,  and  he  knew  that  Moore  was 
a  mere  agent,  performing  an  act  in  the  line  of  his  duty  for  his  em- 
ployers, the  defendants,  for  their  benefit  and  on  their  account ;  and  it  ^ 
is  for  this  reason  that  the  act  is  in  law  theirs,  not  his. 

The  verdict  in  favor  of  the  plaintiff  was  properly  directed,  and  the 
motion  for  a  new  trial  must  be  denied. 


DAVLS  V.  LYNCH. 

(Supreme  Court  of  New  York,  .\pp«lliitH  Tprni,  1000.    31  Misc.  Rep.  724, 
05  N.  Y.   Supp.  22!5.) 

Action  on  a  contract.  From  an  order  dismissing  the  complaint 
piWrrtHf  Tippeals. 

O'GoKMAN,  J.  Although  the  written  contract  in  (pustion  was 
signed  by  George  M.  Lyjich,  there  is  sufficienLJn  plaintiffs  proofs  to 
justify  the   finding  that   George   M.   Lynch   was  at   the  time   acting 


720  KFKKOTS    AM>    CONSIH.ir  I'.NCKS    OK   'llli;    1!  i:i..\II(»N  (Pait    3 

as  llio  ik'tciulaiit 's  ai;cn(,  and  was  so  rct^ardcd  li\  hotli  parties.  It 
was,  therefore,  error  to  j^rant  tin-  (K-feiulaiU's  motion  to  dismiss  llie 
complaint. 

If  an  agent  possessint;-  dne  authority  makes  a  eonlraet  in  his  own 
name,  liis  principal,  whether  known  or  unknown,  may  be  sued  there- 
on, unless  from  the  attendant  circumstances  it  is  the  clear  intent  ..oj 
the  parties  that  exclusive  credit  is  giveii  Jo  the  agciit,-aud_.that_ no_ 
_resort_siiall_iii_jinj  event  be  had  against  the  prindpal.^  Story,  Ag. 
§  160a:  Coleman  v.  Bank,  53  N.  Y.  393;  Hall  v.  Lauderdale,  46 
N.  Y.  70.  We  are  aware  that  a  contrary  rule  was  declared  in  Re 
r.ateman.  7  Misc.  Rep.  633,  28  N.  Y.  Supp.  36,  but  the  statement 
of  the  law  there  made  is  not  in  harmony  with  the  authorities.  Al- 
though that  case  was  affirmed  by  the  court  of  appeals,  the  judgment 
was  upheld  on  other  grounds. 

Judgment  reversed,  and  new  trial  ordered,  with  costs  to  appellant 
to  abide  the  event.    All  concur. 


MARVIN  v.  WILBER. 

(Court  of  Appeals  of  New  York,  IST.'J.     52  N.  T.  270.) 

Action  for  the  purchase  price  of  hops  alleged  to  have  been  sold 
to  defendant.     The  answer  set  up,  among  other  things,  a  defect  of^ 
parties  defendant  in  the  omission  to  join  George  I.  Wilber.     Defend-^ 
ant  moved  for  a  nonsuit  for  nonjoinder  of  his  partner.     Motion  de^ 
nied,  verdict  for  defendant.    The  case  comes  up  on  appeal  from  iudg-  ^ 
ment  of  the  General  Term  of  the  Supreme  Court  in  favor  of  plsiU:; 
tiff. 

Peckham,  J.     One  Vosburgh  was  ^_ agent  of_Wilber  &  Son  for 
the  purchase  of  "hopsT^lie  was"  agent  for  the  firm  onl}',  not   for  this 
defendant  severally.     Waive  any  question  of  the" statute  uf  frandsTor^ 
Ttits'purpose,  and  assume  that  he  purchased  of  the  plaintiff  as  agent^ 
of  the  defendant  the  hops  in  question;   that  such  purchase  was  made^ 
expressly  for  the  defendant,  as  thus  stated  by  Vosburgii,  although 
he  had  no  authority  so  to  purchase,  is  the  defendant  severally  liable^^ 
for  such  a  purchase  ? 

1  know  of  no  principle  upon  which  such  an  action  can  be  main- 
tained. The  whole  case  is  that  a  person  has  assumed  to  act  for 
another  and  incurs  an  obligation  against  him  without  authorit},  and 

2  The  act  of  the  agent  within  the  scope  of  his  authority  is  the  act  of  the 
principal.  Kenard  v.  Turner,  42  Ala.  117  (ISCS) ;  Jones  v.  Gould,  123  App. 
I)iv.  2.%,  108  N.  Y.  Supp.  HI  (li)08).  It  would  be  anomalous  and  unconscion- 
able to  allow  the  prin<ii)al  to  contest  the  rijilit  of  tlie  third  person  on  a  con- 
tract made  by  the  af;<'nr.  Youufr  v.  Stein.  ir.2  Midi.  .'MO.  IIO  N.  W.  105,  17 
L.  It.  A.  (.\.  S.)  2.'n.  125  Am.  St.  Hop.  412  (190S).  And  it  matters  not  whether 
ihf  act  of  the  agent  was  within  the  real,  or  his  apparent,  autlun-ity.  North 
liiver  Bank  v.  Aymar,  3  Hill  (N.  Y.)  262  (1842). 


Ch.  5)  LIABILITY    OF    PRIXCITAL    TO    THIRD    PERSON  72  ( 

we  are  asked  whether  such  an  obhgation  is  vaUd.    The  plain  answer 
-5^Uffis"to'be~That  the  alleged  principal  never  personally  made  such  a 
conTTacfTand  the  assumed  agent  never  had  any  authority  to  make 
"it.     Hence,  none  was  made  by  the  defendant. 

njt  it  is  claimed  that  this  action  lies  against  defendant  alone,  upon 

the  ground  that  a  "representation  made  by  a  general  agent  is  just  as 

■^ndiiig'oirnTe  defendant  as  if  made  by  himself."     True,  where  he  is 

-acting  within  the  line  of  his  agency;  but  that  assumes  that  Vosburgh 

was  the  general  agent  of  the  defendant,  which  is  not  true. 

If  he  were  the  general  _agent  of  defendant,  of  course  he  had  the 
riglTrTTrmaTce~tTiis^  contract  for  him;    but  he  was  the  general  agent 
oT  the  firm,  and  not  of  the  defendant,  individually,  at  all. 
'"The"  assumption    being    wholly    unfounded,    the    whole    inference 
founded  thereon  fails. 

Vosburgh  had  no  real  authority  from  the  defendant ;  none  is  pre- 
tended; and  he  was  clothed  with  no  apparent  authority  from  him 
individually. 

An  indivklual  and  a  firrn  liability  are  very  different  things.     They 

may  be  different  to  the  creditor  as  well  as  to  the  firm ;   one  may  be 
solvent  and  the  other  not. 

The  counsel  cites  many  cases  to  sustain  the  decision  of  the  trial 
judge,  but  they  are  cases  of  dormant  partners,  who  confessedly  need 
not  be  sued  if  the  plaintiff  did  not  know  of  the  existence  of  the  dor- 
mant partner.  Such  are  the  cases  in  New^  York  Dry  Dock  Co.  v. 
Treadwell,  19  Wend.  525 ;  Clarkson  v.  Carter,  3  Cow.  84 ;  Clark  v. 
Miller,  4  Wend.  628;  North  v.  Bloss,  30  N.  Y.  374;  Hurlbut  v. 
Post,  1  Bosw.  36.  So  if  a  party  purchase  for  himself,  without  dis- 
closing jhat  he  had  a  partner,  and  the  vendor  was  ignorant  thereof, 
the  action  may  be  brought  against  the  party  alone  who  made  the  con- 
tracji,. Sd  an  agent  can  bind  himself  by  not  disclosing  his  agency,  but 
he  cannot  bind  the  party  for  whom  he  is  not  an  agent  no  matter  how 
much  he  assumes.  He  cannot  create  an  agency  by  rcprcseiUations. 
This  action  wouTcFimcToubtedly  lie  if  it  could  be^e'staLlished  that 
the  agent  of  a  firm  to  buy  hops  was  therefore  and  thereby  the  agent 
of  an  individual  member  of  that  firm,  authorized  to  buy  for  him  and 
to  make  him  iiiflividually  liable  therefor.  But  that  position  the  plain- 
tiff's counsel  has  not  attempted  to  establish.  He  cites  no  authority  to 
that  effect  and  takes  no  such  position.  He  simply  argues  upon  the 
assumption  that  Vosburgh  was  the  agent  of  this  defendant,  and  as 
such  authorized  to  bind  him  as  far  as  he  could  bind  himself.  The 
court  must  have  acted  ui)on  that  priiicii)le_in  ij^  charge,  that  if  the  ^ 
plaintjff  (lid  ITo't  kn()W   that  Voshurgli   was  acting  for  Qic  liriu,.Jb.uL 

was  informed  that  he  acted  for  the  defendant,  that  then  the  dcfcnd.a]iL. 

was  liable  severally.    This  cannot  be  maintained.     No  amount  of  rep- 
resentations  can  create  an  agency.     Any  ))crson  may  bind  himself  as 

he  "pTeascsT  ']^ut  to  be  bound  by  the  acforanotfier,  that  other,  must 

have  real  or  apparent  authority  to  do  the  act.  „I"  this  case  the  as- 


TllS  EFFECTS   AND   CONSEQUENCES   OF  THE   RELATION  (Part   3 

sumcd  ai;cut  had  ncitho_r._    This  dcfcmlant  set  up  in  his  answer  that 

"Tltr^ir^as  a  necessary  party,  but  the  phiintift"  refused  to  amend. 

The  judgment  should  be  reversed,  new  trial  granted,  costs  to  abide  the 

event.    All  concur. 


FT.  WORTH  &  D.  C.  R.  CO.  v.  JOHNSON  &  TRICE. 

(Court  of  Appeals  of  Texas,  18S4.     2  Willson,  Civ.  Cas.  Ct.  App.  §§  232,  234.) 

White,  P.  J.s     *     *     *     In  this  case  Trice  &  Tohnson  sued  the 
railroad  company  to  recover'the  vaTiieof  beeXJttirnished  to  one  Bar- 
ker,   claiming  that  Barker  was  the  agent  of  the  company,  and  au- 
thorized to  bind  it  for  the  beef  purchased  by  him.     Barker  was  road- 
master  for  the  company,  and  he  also  kept  a  boarding  or  eatin-  lunise 
Tn  some  box  cars  belonging  to  the  company,  which  cars"^wcrc'   fur- 
nished him  by  the  company  free  of  charg^.  __He  fed  and  lodge<1  liands^ 
~~who  \vere  in  the  employ  of  the  company.    The  Beeffurnished  by  Trice 
^^^^ST'Jo'hnson  was  for  the  boarding  house  kept  bv  Barker.     Barker. 
when  he  purchased  the  beef,  told  Trice  that  the  comnanv  was  respon- 
sible  for  it.    There  was  no  evidence,  except  the  declarations  of  Bar- 
ker, that  he  had  any  authority  to  bind  the  company  for  the  beef. 
Held,  that  there  was  no  sufficient  proof  that  Barker  was  the  a-cnl  of 
"TRe"company  authorized  to  bind  it  by  the  purchase^of  tbe  beef. 

§234.  Special  agent;  'principal  not  bound  for  acts  of,  unless,  etc. 

That  a  party  is  agent  for  another  does  not  render  such  other  liable 

for  every  contract  the  agent  may  make.     To  be  binding  upon  the 

principal,  the  contract  must  come  within  the  apparent  scope  of  the 

agent's  authofity;     With  regard  to^special  agents,  the  rule  is  that  if 

the  agent  exceeds  the  special  and^TTmited  authority"  conferred  on  him, 

His  principal  is  not  bound  by  his  acts,  but  they  become  mere  nullities 

~sb  far  as  he  is  concerned,  unless,  indeed,  he  has  held  him  out  as  pos-^ 

sessing  a  more  enlarged  authority.    Story  on  Agency  (9th  Ed.)  §  126. 

The  agency  conferred  upon  a  roadmaster  is  special,  and   does  not 

confer  authority  to  bind  the  company  for  provisions  purchased  to 

"  supply  a  boarding  house.*     *     *     * 

Reversed  and  remanded. 

8  Part  of  the  opinion  is  omitted. 

<  The  agent  cannot  increase,  or  enlarge,  his  authority  by  unauthorized  acts 
so  as  to  make  his  principal  lial)le  to  third  persons  therefor.  AMiite  v.  Lee,  97 
Miss.  49.'}.  .52  South.  20*;  (1910).  Sec,  also.  Spies  v.  Stein,  70  Neb.  G41,  97  N. 
W.  752  (190.'i),  holding  that  the  unauthorized  acts  of  an  agent,  not  within  the 
apparent  scope  of  his  authority,  and  not  ratified  by  the  principal,  actually  or 
constructively,  cannot  bind  the  principal.  This  is  especially  true  if  the  third 
person  is  aware  of  the  want  of  authority.  Carter  v.  ^tna  Lioan  Co.,  Gl  Mo. 
App.  218  (1S9.5);  Barton-Parker  Mfg.  Co.  v.  Wilson,  96  Minn.  334,  104  N. 
W.  9G8  (190.!>i,  and  still  more  so  when  the  agent  is  a  special  one,  Fox  v.  Fisk, 
6  How.  (Miss.)  328  (1842^ 


J- 


Ch.  5) 


LIABILITY    OF   PRINCIPAL   TO   THIRD    PERSON 


729 


HYDE  V.  PAIGE.» 

(Supreme  Court  of  New  York,  1850.     9  Barb.  150.) 
Hand,  J.     I  think  the  only  point  in  the  case  is,  whether  Paige,  the 
plaintiff  below,   can   call   upon   the   defendants   below,   after   taking 
> — MSilton'^s  note  for  the  price  of  the  goods  sold.     Moulton  testified 
" — fhat  he  bought  the  hay  of  the  plaintiff  for  the  defendants,  in  1839 
^~Df  1840,  "and  gave  his  own  note  for  the  amount,  which  he  had  never 
— paid,  and  that  he  was  insolvent.    The  plaintiff  wanted  Moulton's  note, 
■~who  declined  at  first  to  give  it,"saylng~the  hay  was  for  Hyde,  for_^ 
~wh6rh  he  was  purchasing  it.  "  But  the  plaintiff  insisted  upon  Moul-^ 
—^TohV own  note,  which  he  finally  gave.    The  note  was  payable  on  de- 
— marid,  and  there  was  no  proof  that  it  had  been  given  up.     Moulton 
"'was  the  only  witness  sworn,  and  it  is  impossible  not  to  see  that  the 
plaintiff  relied  entirely  upon  Moulton  to  pay  for  the  hay. 

Where  a  vendor  sells  goods  to  an  agent,  and  with  fill  knowledge^^ 
orthe  agency,  takes  f1ie"n6te  of  the  agent,  for  the  purchase  money, 
— and  rehes  upon  his  credit,  he  can  not  resort  to  the  principal.    Beebee 
""^Robert.  12  Wen(f.  417,  27  Am.  Dec.   132;    Pent/  v.   Stanton,   10 
Wend.  275,  25  Am.  Dec.  558;   Patterson  v.  Gandasequi,  15  East,  62; 
Emly  V.  Lye,  Id.  7;  Addison  v.  Gandasequi,  4  Taunt.  574.    And  see 
Waydell  v.  Luer,  3  Denio,  410.    It  clearly  appears  that  this  was  done_^ 
in  this  case.     Six  or  seven  years  have' eTapsed,  and  the  agent  has 
— Tailed  in'business,  and  now  the  vendor  attempts  to  collect  the  debt 
of  the  principal.     This  he  can  not  do. 

It  is  said  this  was  a  question  of  fact  for  the  justice,  and  that  his 
finding  is  conclusive.  But  there  is  no  conflict  of  evidence.  The  only 
witness  in  the  cause  was  called  by  the  plaintiff,  and  he  is  clear,  dis- 
tinct and  unequivocal  in  his  relation  of  this  portion  of  the  transac- 
tion. 

There  being  no  dispute  about  what  the  witness  testified,  nor  any 
ambiguity  or  doubt  as  to  the  meaning  of  his  language,  the  facts  are 
undisputed,  and  the  effect  of  his  testimony  becomes  matter  of  law. 
The  judgment  of  the  county  court  must  be  affirmed. 

»  Accord:     I'uige  v.   Stone,  10  Mclc   (Mass.)   1(;0,  43  Am.   Dec.  420  (lS4.''i) ; 

\    Raiiken  v.  Deforest,  IS  P.arl).  l-T-i  (1.s.j4).     Sec,  also.  Silver  v.  Jordan.  V.W  Mass. 

>  310  (1SS4),  In  wlil'ii  the  third  person  charged  the  Roods  sold  to  the  mxvui.  wlio 

'  purchased   tlu-ni   for  dcfcndaut.     TUo  mere  laUiiiK  of  the  itcrsonal  olili^^ation 

of  a  known  a^ent  is  a   priiiia   fade  i»resunii)linii   tliat  credit   is  given   to  the 

agent  alone,  and  tlie  prln.iiial  is  not  liable.     Mcrrell  v.  Witherby,  120  Ala.  418, 

23  South.  994,  26  Soutli.  974,  74  Am.  St.  Rep.  39  (1898). 


^ 


<^UC 


7^ 


p/ut- 


/■ 


/r    7 


^r^ 


730  EFFECTS    AM)    I'ONSl'.QlKNt'KS   OF  TllK    UKl.ATION  (Part   3 


DOWDHN  V.  CRYDER. 

(ronrf  of  Errors  :nul   Apponls  of  Now  Jersey,  1893.     55  N.  J.  Law,  ^'20, 

12()  Atl.  941.) 

DixoN,  J."  E.  II.  Cannack  drew  a  draft  on  the  defendant  iqr^_ 
$3,200,  payable  four  months  after  date  to  his  own  order,  and  the 
defendant  accepted  it  for  Carmack's.  acconnnodation.  Thereupon 
Carmack  indorsed  it,  and  dchvered  it  to  one  Iknnelt,  witli  auihoiily 
'  TO'  ne got iate:  jj  for  cash  at  a  reasonable  .discount  Uarnctt  trau.sferred 
it  to  the  plaintiff  for  $2,060  cash  and  a  diamond  necklace,  which  they 
valued  at  $1,100,  and  then  absconded.  At  the  time  of  the  transfer  the_ 
plaintiff  knew  that  Harnett  was  not  the  owner  of  the  draft,  but  hold. 

ft  merely  as  agent  of  Carmack  for  negotiation.    Carmack^rcpudiated 

the  transfer,  and  the  draft  went  to  protest;   hence  this  suit.  ^ 

ATthe  trial  in  the  Essex  circuit  the  cause  was  sul)mitted  to  the 
jury  on  the  question  of  fact  whether  the  necklace,  prior  to  the  trans- 
fer, was  the  property  of  the  plaintiff  or  was  the  property  of  Barnett, 
held  by  the  plaintiff  to  secure  Barnett's  debt  to  him;  and  the  jury 
were  instructed  that  in  the  former  case  the  plaintiff  might  recover, 
but  could  not  in  the  latter.  They  found  for  the  defendant.  The  cause 
is  before  us  on  exceptions  to  the  charge  of  the  judge  and  to  his  re- 
fusals to  charge  in  accordance  with  the  plaintiff's  requests. 

First  the  plaintiff  asked  the  judge  to  charge  that  the  plaintiff's 
title  to  the  draft  could  not  be  invalidated  unless  the  circumstances 
under  which  he  took  it  proved  actual  fraud ;  that  mere  carelessness 
would  not  impair  his  title.  This  legal  rule  is  thoroughly  established, 
(Hamilton  v.  Vought,  34  N.  J.  Law,  187;  Copper  v.  Jersey  City,  44 
N.  J.  Law,  634),  but  it  is  inapplicable  to  the  present  case.  Tlie  defect 
found  in  the  plaintiff's  title  sprang,  not  from  the  law  relating  to  com- 
mercial paper,  but  from  the  law  of  agency.  It  is  a  universal  prin- 
ciple in  the  law  of  agency  that  the  powers  of  the  agent  are  to  l)e 
exercised  for  the  benefit  of  the  principal,  and'  not  of  the  agent  or  third 
partjes.  Jaques  v.  Todd,  1  Amer.  Lead.  Cas.  (5th  Ed.)  687.  Per-  . 
'sons  dealing  with  one  whom  they  know  to  be  an  agentj,  apd  to  be  . 
exercising  his  authority  for  his  ownbenefit,  acquire  no  rights  against 
the  principal  by  the  transaction.  Stainer  v.  Tysen,  3  Hill,  279:  Ah- 
cutchen  v.  Kennady,  27  N.  J.  Law,  230;  Safe-Deposit  Co.  v.  Abbott, 
44  N.  J.  Law,  257;  Bank  v.  Underbill,  102  N.  Y.  336,  7  N.  E.  293. 
Such  a  transaction  is  usually,  and  perhaps  properly,  spoken  of  by  the 
courts  as  fraudulent,  but,  however  honest  the  intention  of  the  parties, 
the  agent's  act  is  invalid  merely  because  circumstances  known  to 
both  prove  it  to  be  ultra  vires.  In  the  present  case  the  plaintiff 
sought  to  get  rid  of  the  imputation  of  bad  faith,  by  claimiuL^  that 
Barnett  had  told  him  he  had  authority  to  accept  the  diamonds  in 
exchange  for  the  draft ;  but  it  was  not  pretended  that  such  authority 


8  Part  of  the  opinion  is  omitted. 


Ch.  5)  '        LIABILITY  "of    PRINCIPAL    TO    THIRD    PERSON  731 

was  supposed  to  have  been  given  with  knowledge  that  the  agent  had 
a  personal  interest   in  the  redemption  of  the   diamonds.     Nothing  ^^ 
short  of  power  expressly  granted  to  the  agent  to  deal  with  the  Hf a|^^ 
'  toTiTK^own  benefit  would  validate  such  a  use  of  it  in  favor. of  one 
^cognizant_of  the  facts.    Consequently,  on  the  fact  found  by  the  jury, 
'^ITTeplaTntiff 's  title  was  defeatecT,'  if  not  by  his  actual  fraud,  by  hi^^ 
"Tcnowledge  of  the  agent's  misappropriation  of  the  principal's,  prop-  _ 
— eflyT'   Tliis  request  was  rightly  refu-;c<l,   save  as  its  substance  was 
embodied  iiillTe'  charge  delivered. 


e  second  request  was  to  charge  that,  if  the  agent  represented  to  jC^ 


7^ 


the  plaintiff  that  he  had  authority  to  exchange  the  draft  for  monex^      / yi      y 
^ind  diamonds,  and  tlie  plaintiff  believed  him,  Carmack  was  estopped^         ^^-^ 
'from  denyiiiL;-  tlu'  authority;   and  Campbell  v.  Xichols,  33  X.  J.  Caw, 
81,  is  cited  to  support  this  proposition.     For  reasons  already  stated, 
this  request  did  not  reach  the  merits  of  the  case,  because  it  was  not_ 
-rtaimed  that  Carmack  had  any  notice  of  his  agent's  interest  in  the 
-diamonds.     Rut,   aside    from  this,   the   proposition   was   intrinsically 
ifnsound.     The  (leclarati(jns  of  an  agent,  although  accompanying;  hi^ 
acts,  constitute  no  evidence  of  the  extent  of  his  authority.     Story, 
■  Ag.  §  136;    Brigham  v.  Peters,  1  Gray,  139;    Baker  v.  Gerrish,  14 
Allen,  201;    GifYord  v.  Landrine,  37  N.  J.  Eq.  127;    Farmers'  Bank 
v.  Butchers'  Bank,  16  N.  Y.  134,  69  Am.  Dec.  678.    The  decision  in 
Campbell  v.  Nichols  does  not  militate  with  this  rule.    The  representa- 
tion there  upheld  as  an  estoppel  against  the  principal  related,  not  to 
the  scope  of  the  agent's  power,  but  to  an  extrinsic  circumstance  af- 
fecting the  character  of  the  instrument  which  the  agent  was  empow- 
ered to  dispose  of,  and  which  circumstance  would  be  within  the 
cognizance  of  the  agent  or  his  principal,  but  not  of  those  dealing 
with  the  agent.     The  distinction  between  a  representation  by  an 
agent  as  to  such  extrinsic  facts  and  his  representation  as  to  the 
scope  of  his  authority  is  clearly  drawn  in  Farmers'  Bank  v.  Butch- 
ers' Bank,  ubi  supra.     *     *     * 
Judgment   affirmed. 

7  It  flof'S  iiMt  iii.iii«-r  iliMt  the  prlrxipnl  rcfoivod  full  value  In  the  trnnsac- 
tion  if  his  anciit  also  acted  for  the  third  person.  Tyler  v.  Sanliorn,  lliS  111. 
i:5fi  21  N.  E.  10:{.  4  L.  R.  A.  218,  IH  Am.  St.  Hep.  97  (ISSOt.  Rut  see  Carretti 
V.  Tr'ihne.  S2  Ala.  227,  3  South.  1  19  (ISNC),  in  whirh  it  was  shown  the  a;,'ent 
intf-ndt'd  to  make  se<ret  prollts  out  of  the  transaction.  If  the  third  party  has 
Mfied  l.ona  fide  he  cannot  he  afTected  hy  the  unfaithfulness  of  the  a^'ent,  of 
which  he  harl  no  notice;  or  knowled;,'e.  Ilaniiuo  v.  I'.urnand,  |l!)()l|  2  K.  It. 
10  y  Com.  Cas.  251.  IW  L.  J.  K.  I'..  <!<!'•>.  90  \..  T.  Uei>.  N-  S-  ^O.'i,  20  T.  L.  U. 
'{OS  r,"  W  K  .".h:{  reversiuk'  |190:!|  2  K.  P..  .".99,  8  Com.  Cas.  252,  72  L.  J.  K.  15. 
002,  89  L.  T.  Kep.  N.  S.  180,  19  T.  L.  It.  284,  51  W.  R.  G52. 


/l/-V^ 


>>■ 


732  EFFECTS   AND   CONSKQIUONCKS   OF   TIIK    UELATION  (Part   3 

EMPIRE  STATE  INS.  CO.  v.  AMERICAN  CENT.  INS.  CO. 

(Court  of  Apitoals  of  Xew  York.  IS'Xl     V.iS  N.  Y.  440,  ;{4  N.  K.  200.) 

Eakl.  J.    The  firm  of  Straub  &  Morris  were  agents  of  the  plain- 
tiff at  Pittsburgh,  Pa.,  in  August,  1889,  and  on  the  7th  day  of  that 
tnonth,  as  such  agents,  they  issued  a  policy  of  insurance  whereby  the 
l^laintiff  insured  the  Ridgway  Lumber  Company  against  loss  by  fire  to 
the  amount  of  $2,500.     Subsequently,  on  the  20th  day  of  August,  the 
~^  defendant  appointed  them  its  agents  also.     They  reported  that  poljicx, 
to  the  plaintiff  on  the  19th  day  of  August,  and  it  wrote  to  its  special 
agent.  Frank  Aull,  to  have  the  risk  reduced  to  $1,000,  and  he  notified 
the  agents  to  cancel  the  policy,  or  reduce  the  risk  to  $1,000,  by  rein- 
surance.   Thereafter,  on  the  21st  day  of  September,  Straub  iK:  Morris, 
being  then  agents  for  the  plaintiff  and  defendant,  reinsured  phiinliff's 
risk  with  the   defendant,  to  the   amount  of  $1,500,  by   entering  the 
"^agreement  for  reinsurance  in  their  binder  book.    Subsequently,  on  the 
1 2th  day  of  October,  the  property  insured  was  desfroyed  by  fire,  be- 
fore the  reinsurance  had  been  reported  to  the  defendant  or  had  come 
to  its  knowledge.     The  plaintiff  paid  the  amount  of  its  liability  under 
its  policy  for  the  loss^and  then  brought  this  action  against  the  defendj-_ 
ant  to  recover  three-fifths  thereof  under  its  reinsurance  agreement.^ 
The'  defendant   refused    payment,    and    defended   the    action    on   the_ 
ground  that  Straub  &  Morris  could  not  bind  it  by  the  agreement  for 
reinsurance,  because  they  were  at  the  same  time  the  agents  of  the" 
plaintjff,  and  could  not  act  in  the  dual  capacity  of  agents  for  both  par- 
ties in  effecting  the  reinsurance.    The  court  below  upheld  the  conten- 
^ /      tion  of  the  defendant,  and  whether  it  was  right  in  so  doing  is  the  sole 
question  for  our  determination.  _ 

It  is  not  doubted  that  the  same  person  may  sometimes  act  as  agent 
for  the  two  parties  in  the  same  transaction ;  but  he  can  do  so  only  in 
case  he  has  no  discretion  to  exercise  for  either  party.  An  agent  to 
sell  for  one  party  may  also  act  as  agent  for  the  buyer,  but  only  in  case 
'.the  price  and  terms  of  sale  have  been  fixed  by  each  party,  so  that  noth-^ 
'  ing  is  left  to  his  discretion.  But  an  agent  to  sell,  intrusted  with  a  dis- 
cretion, and  thus  bound  to  obtain  the  best  price  he  can,  cannot  buy  for 
himself  or  as  agent  for  another.  In  such  a  case  he  would  occupy  an 
antagonistic  position,  and  there  would  be  a  conflict  of  interests.  He 
could  not  faithfully  serve  the  one  party  without  betraying  the  interests 
of  the  other.  He  would  at  least  be  under  great  temptation  to  betray 
the  interest  of  one  of  the  parties.  So  a  person  may  sometimes  act  as 
agent  of  both  parties  in  the  making  of  any  contract ;  but  he  cannot  do 
so'  when  he  is  invested  with  a  discretion  by  each  party,  and  when  each 
*~  is  entitled  to  the  benefit  of  his  skill  and  judgment.  The  rules  of  law 
upon  this  subject  have  been  laid  down  and  illustrated  in  many  cases, 
of  which  it  is  sufficient  for  the  present  purpose  to  cite  the  following: 
Utica  Ins.  Co.  v.  Toledo  Ins.  Co.,  17  Barb.  132 ;  Ritt  v.  Insurance  Co.^ 


•«N 


/ 


/ 


/-^. 


/ 


/      Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  733 

41  Barb.  353;  New  York  Cent.  Ins.  Co.  v.  National  Protection  Ins. 
Co.,  14  N.  Y.  85 ;  Claflin  v.  Bank,  25  N.  Y.  293 ;  Murray  v.  Beard, 
102  N.  Y.  505,  509,  7  N.  E.  553 ;  Porter  v.  Woodruff,  36  N.  J.  Eq. 
174;   Michoud  v.  Girod,  4  How.  503,  11  L.  Ed.  1076. 

Contracts  thus  negotiated  are  void  at  the  option  of  any  nonassenting,,;' 
party  thereto.  The  policy  of  the  law  condemns  them.  It  matters  not 
that  the  agent  has  acted  fairly  and  honestly,  and  even  that  neither 
par^Tto  the  contract  has  suffered  injury.  It  is  enough  to  condemn  the 
""TOTftfact  that  the  common  agent  in  fact  had  any,  even  the  least,  dis- 
cretion to  exercise  for  the  parties.  As  said  by  the  chancellor  in  Por- 
ter V.  Woodruff:  "So  jealous  is  the  law  upon  this  point  that  it  will 
not  even  allow  the  agent  or  trustee  to  put  himself  in  a  position  in  which 
to  be  honest  must  be  a  strain  upon  him."" 

These  principles  of  law  are  not  disputed  by  the  counsel  who  argued 

this  case,  and  they  are  so  thoroughly  embodied  in  the  law  that  they 

could  not  be.     Their  difference  is  as  to  their  application  to  this  case. 

The  learned  counsel  for  the  plaintiff  contends  that  Straul)  &  Alorris 

had  no  discretion  to  exercise  for  the  plaintiff'  in  effecting  the  reinsur- 

ance;   that,  so  far  as  they  had  any  discretion  to  exercise,  it  was.  for 

the  defendant  alone;    and  thus,  that  there  was  no  antagonism  or  in-^    s 

'      compatibility  between  the  duties  they  owed  to  each  of  their  principalsi.^ 

—and  here  wc  think  is  his  mistake.     Straub  &  Morris  were  ordered  to 

reduce   the  plaintiff's  risk  by  canceling  the  policy,  or  by  reinsuring 

*     IhrcL-hi'ths  thereof,  and  this  order  they  were  absolutely  bound  to  obey. 

".They  had  a  discretion' to  exercise  in  determining  whether  they  would 

*•  cancel  or  reinsure,  and  in  making  that  determination  they  acted  solely 

for  the  plaintiff.     They  determined  to  reinsure,., and  thus  the  option 

thex_iiad_to  cancel  disappeared  as  if  it  had  never  existed,  and  it  can 

play  no  part  in  this  case.    They  then  owed  the  duty  to  the  plaintiff  to 

""reinsure,  if  they  could.     It  does  not  appear  why  the  plaintiff  was  un- 

'"^willing  to  carr\   the  $2,500^TThsurance.    It  may  have  been  because  it,, 

^-^hought  tl  -  overjnsurance,  or  that  the  risk  was  too^Jiazardqus,,^^^ 

""  or  that,  for  souk-  (jther  reason,  the  insurance  was  unprofitable  or  undo- 

sirable.     It  might  have  been  difficult  to  obtain  the  reinsurance  from  ^ 

any  other  good  company.     It  is  quite  clear  from  what  api)ears  in  this 

record  that  the  clefenJaiTr  woiiTd  not  knowingly  have  reinsured  the 

nsk7'"Tn  order  to  procure  the  reinsurance  the  agents  owed  the  plaintiff 

fTicir  utmost  diligence  and  skill.     They  had  issued  an  improvident  or 

undesirable  policy,  and  they  must  "have  felt  under  a  very  strong  obli- 

^  .s...  Ifi-Kiison  V.  Gooch.  94  \n.  1.  lie,  S.  i;.  WM.  40  L.  R.  A.  234  (1896),  with 
full  (jisnisslnn  nnf]  rIfMflon  of  authorities.  Ks|H»ciall.v  iHM'iiifious  iiro  <nii- 
trncfs  in  wliirli  it  nitjH-iirs  tiie  tliird  porsmi  ])iii(i  tlie  ■•ikchI  a  coniniissiou  on 
husihfss  triiiisaftcd  witli  lii.s  jtriiuiiial.  City  of  I-'imliay  v.  I'ertz,  (i(i  I'od.  4-7. 
i:;  <•.  (;.  a.  TmM,  29  I..  K.  A.  l.SS  (JSJ).-)),  allinued  74  I'Y'd.  GHl.  20  (J.  C.  A.  002 

(\m\). 

As  to  wliolhcr  the  contract  is  void  or  voidable,  see  N.  Y.  C.  Ins.  Co.  v.  Nat. 
rroti'ition  Ins.  Co.,  14  N.  Y.  85  (1850),  rcvcising  20  Uarb.  408  (1854);  Iluggiu!- 
i)o.  v.  I'eopif's  In.s.  Co.,  41  Mo.  App.  530  (1890). 


734  KFFKCTS   AM)    CO.NSKQl  KNCKS   OK  TIIK    RELATION  (Part    3 

gation  to  rciluoe  the  risk  as  directeil.    They  owed  a  dtity  (o  the  plain- 
tifT  to  take  the  reinsurance,  even  if  they  were  cnmiiKcd  tli;il  it  was  ' 
undesiraMe.   ha/ardous,   and   unprofitable,   and   the   more   thoroughly 
they  were  convinced  of  these  things  the  more  urgent  was  their  duly  to 
protect  the  plaintiff.    On  the  contrary,  as  agents  of  the  defendant,  tlic>- 
were  lK)und  to  exercise  their  discretion  on  its  belialf,  and  not  inal<c 

"T^o  fern<tifance  without   inciuiring  and  knowing  thai   ihr   lisl^   wis  a 

for  it  to  take.     It  was  their  duly  to  it  iint  i^  take  tlic  risk 

..   ;...:.    ...IS  overinsurance,  or  ff  it  was  too  hazardium,  ,,i-   if  it  was 

iinprofitaLle  and  undesirable;    and  hence  ihis  was  a  ea-r  where  iIkn 

could  not  in  this  transaction  serve  the  two  masters.  "" 

There  was  conllicl  in  their  duties,  and  they  were  under  a  strong 
ten"Tp!alTon  to  fail  in  their  allegiance  to  one  <>v  the  other  of  their  prin- 
cipals rheriQe.  this  agreement  is  clearly  one  which  llie  policy  of  the  law 

"condenuis.  and  we  see  no  reason  to  doubt  thai  the  court  below  prop- 
erly applied  the  principles  of  law;  and  its  judgment  should  be  af- 
firmed, with  costs.    All  concur. 


WASSELL  V.  REARDON. 

(Supreme  Court  of  Arkansas,  1851.     11  Ark.  [6  Eng.]  705,  44  Am.  Dec.  245.) 

Walker,  J.®  The  defendant  executed  to  the  plaigtiff^s  .attorneys 
a  power  of  attorney  by  which  they'^were  empowered  to  confess  judg- 
ment for  said  defendant  on  a  note  which  the  plaintiff  had  placed  in 
the  hands  of  such  attorneys  for  collection.  By  virtue  of  this  power 
judgment  was  regularly  confessed  and  entered  of  record. . 

To  this  judgment  it  is  objected: 

1.  That  the  attorney  at  law  for  the  plaintiff  could  not  act  as  attor- 
ney in  fact  for  the  defendant,  touching  the  same  subject  matter  on  ac- 
count of  his  prior  retainer  by  the  plaintiff — the  interest  and  rights  of 
the  plaintiff  and  defendant  being  adverse. 

2.  That  the  judgment  was  not  confessed  until  after  the  note  was 
barred  by  limitation,  and  that  it  was  the  duty  of  the  attorney  to  have 
interposed  this  defence.     *     *     * 

As  a  general  rule  it  is  true  that  agents  cannot  act  so  as  to  bind  their 
principals,  where  they  have  or  represent  interests  adverse  to  the  prin- 
cipal's. This  rule  is  founded  upon  the  consideration  that  the  principal 
bargains  for  the  skill  and  vigilant  attention  of  the  agent  to  the  subject 
matter  entrusted  to  him :  and  the  policy  of  the  law  will  not  tolerate 
the  existence  of  an  adverse  interest  in  the  agent  to  that  of  his  princi- 
pal for  fear  it  may  influence  his  conduct  to  the  prejudice  of  interests^ 
of  the  principal.  This  well  recognized  rule  is  particularly  applicable" 
to  buying  and  selling  agents,  where  the  principal  contracts  for  the 
sen,-ices  of  an  agent  at  a  time  when  he  has  no  interest  in  the  subject 

»  Part  of  the  opinion  is  ouiitted. 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  735 

entrusted  to  him  but  subsequently  by  his  own  act  acquires  interest  in 
it  adverse  to  that  of  the  principal.  In  the  case  before  us  the  attorney 
had  no  jnterest  in  the  matter  of  his"  agency  unless  it  should  arise  from 
TTa?l:laim_to_a3nipensation  as  a  collector,  which  may  or  may  not.  have 
"Been  otherwise  settled ;  nor  had  the  plaintiff  any  interest  whatever  in 
"the  act  to  begone  of  which  the  principal,  at  the  time  he  instituted  him 
"agent,  was  not  fully  advised;  and  if  such  disqualification  existed  he, 
by  his  own  act,  expressly  waived  it  by  conferring  upon  the  agent  such 
power  with  a  knowledge  of  the  facts.  \Mien  it  is  remembered  that  the 
Tvhole  ground  upon  which  this  rule  is  based,  rests  upon  the  fraudulent 
advantage  which  such  an  interest  may  stimulate  the  agent  to  take  to 
the  prejudice  of  his  principal's  rights,  it  will  scarcely  be  contended 
that  the  circumstanoes  of  this  case  bring  it  within  the  reason  and  spirit 
of  the  rule.  The  principal  was  informed  of  the  nature  and  extent  of 
the  interest  which  the  payee  in  the  note  had  in  the  act  to  be  performed 
5y  the  agent.  The  facts  disclosed  in  the  instrument  itself  prove  this; 
and  that  if  was  intended  that  the  act  to  be  performed  should  enure  to 
the  mutual  benefit  of  both  the  payor  and  payee :  to  the  first  by  saving 
him  the  expense  incident  to  a  suit  in  the  usual  form ;  to  the  other  by 
facilitating  and  making  certain  a  recovery. 

This  therefore  was  not  a  mere  naked  power  in  which  the  principal 
was  alone' in terestecf,  but  a  power  coupled  with  an  interest  in  a  tliird 
person,  made  upon  good  and  sufficient  consideration,  and  in  regard  to 

vvhich  the  principal  was  well  advised,  and  so  far  from  an  undue  ad- 

vantage  having  been  taken  of  him  in  the  relationship  in   which  the . 
"    agent "stbdd  towards  him,  he  only  did  that  which  every  truthful  honest 
*~  nian  sHould  do,  and  what  every  prudent,  considerate  attorney  accedes 
to.    The  act  which  the  attorney  undertook  to  perform  was  in  perfect 
*~    Tiarmony  with' the  interest  of  his  client  and  of  the  duty  and  integrity  of 
defendant,  the  payor. ^°     *     *     * 
Judgment  affirmed  with  costs. 

10  Two  partifs.  no  matter  liow  divcrso  tlicir  intctvst,  may  by  mutual  oon- 
.'scnt  make  a  third  tlu'ir  atrciit  to  bind  tlit'iii.  Fitzsiniinoiis  v.  So.  lOxp.  Co., 
40  <ia.  :',:'.(>,  2  Am.  IU-\k  •'»'<'"  <!>«!{»• :  I  ►''  Sti"i;,'cr  v.  llolliiiixton.  17  Mo.  Ap)). 
.'5S2  (ISSr.):  Adams  Miii.  Co.  v.  Si'iitor,  L'C  Mich.  Ill  (1S712).  Tlio  rule  against 
double  aKcucy  docs  not  apply  to  cases  in  wliich  there  is  no  conllict  in  the^ 
duties  assumed  Ity  the  auent.  Hrit.  .\m.  Assur.  Co.  v.  Cooper,  G  Colo^  App. 
25,  40  Pac.  147  (1805) ;    Culwell  v.  Keystone  Iron  Co..  3fi  Mich.  51  (1877)1 


fP 


a^ 


L 


7oG  KKFIXTS   AND   CONSKQUENCUS   OF  THE    RELATION  (Part   3 

TRUSLOW  V.  PARKERSBURG  BRIDGE  &  TERMINAL, 

R.  CO. 

(Supretue  Court  of  Appeals  of  West  Virginia,  1907.     Gl  W.  Va.  628, 

57  S.  E.  51.) 

Saxders,  p."  Tlie  Parkersburg  Bridge  &  Terminal  Railroad 
Company  employed  J.  M.  Mitchell  to  procure  for  it  options  on  cer- 
tain property  on  the  south  side  of  the  Little  Kanawha  river  from 
Parkersburg.  For  this  service  he  was  to  receive  a  fixed  compensa- 
tion per  day.  Acting  in  this  capacity,  he  took  from  the  plaintiffs, 
Hnmia  J.  and  W.  F.  Truslow,  on  the  21st  day  of  November,  1902,  an 
option  on  certain  property  owned  by  them,  the  title  to  which  was  in 
the  female  plaintiff,  for  which  property  the  sum  of  $1,600  was  to  be 
paid.  The  option  was  taken  in  the  name  of  J.  A.  Shrewsbury,  as- 
signed to  Mitchell  by  Shrewsbury,  and  by  Mitchell  assigned  to  the 
railroad  company.  By  its  terms  the  option  was  to  be  accepted  within 
90  days,  and  on  the  31st  day  of  January,  1903,  the  company  notified 
the  plaintiffs  in  writing  that  it  would  accept  the  option,  and  upon 
execution  to  it  of  deed  would  pay  the  price  agreed  to  be  paid. 

In  the  latter  part  of  February,  or  the  1st  of  March,  1903,  the  com- 
pany discovered  that  the  agent,  Mitchell,  had  been  taking  commission 
contracts  on  all  the  property  optioned  by  him ;  that  is,  he  agreed  with 
the  landowners  that  in  case  a  sale  was  effected  by  him  through  the 
option  taken  he  was  to  receive  a  certain  additional  sum — in  this  par- 
ticular instance  the  sum  being  $75.  Upon  discovery  of  this  fact,  the 
relations  between  Mitchell  and  the  company  were  severed ;  the 
company  taking  from  Mitchell  an  assignment  of  all  commission  con- 
tracts taken  by  him.  Negotiations  were  entered  into  with  a  view  of 
obtaining  from  the  plaintiffs  a  contract  more  favorable  to  the  com- 
pany ;  and,  it  refusing  to  comply  with  the  terms  of  the  option,  this 
suit  was  on  the  16th  day  of  January,  1904,  instituted  for  the  purpose 
of  compelling  a  specific  performance  of  the  agreement.  Upon  a  hear- 
ing the  court  decreed  that  the  contract  should  be  specifically  enforced, 
and,  from  this  decree,  the  railroad  company  has  appealed.     *     *     * 

The  appellant,  after  taking  the  assignment  of  the  commission  con- 
tract, retained  the  same  in  its  possession,  and  has  never  offered  to 
surrender  to  the  appellees  either  this  option  or  the  commission  con- 
tract, and  its  action  in  this  respect  indicates  an  intention  on  its  part 
to  avail  itself  of  the  benefits  of  the  contract  in  case  it  should  deem 
it  expedient  to  do  so.  It  filed  these  papers  as  exhibits  with  its  an- 
swer, and  relies  upon  its  defense  to  this  suit  as  a  repudiation  of  the 
contract. 

The  fact  that  the  appellant,  with  full  knowledge  of  all  the  facts, 
ratified  the  contract  made  by  Mitchell,  renders  immaterial  another 

11  Part  of  the  opinion  is  omitted. 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  737 

question  raised  by  counsel  for  it,  and  that  is  that  whether  or  not 
the  appellees  knew  of  the  double  agency  is  immaterial,  as  the  appel- 
lant had  the  right  to  disaffirm  the  contract  upon  discovering  such 
double  agency,  irrespective  of  whether  or  not  the  appellees  had  no- 
tice of  such  agency,  and  regardless  of  whether  or  not  the  appellant 
could  show  that  it  was  damaged  thereby.  This  position  is  sound, 
both  upon  reason  and  authority.  "Wjien  an  agent  acts  for  both  par- 
-ties-iiijiiaking^^ contract  requiring  the  exercise  of  discretion,  the  con- 
tract  is  voidable  in  equity  upon  the  application  of  either  party,  or  the 
circumstance  is  available  as  a  defense  in  an  action  at  law  upon  the 
contract.'^  1  Am.  &  Eng.  Ency.  Law  (2d  Ed.)  1073 ;  Lloyd  v.  Col- 
ston, 5  Bush,  587 ;  Crump  v.  Ingersoll,  44  Minn.  84,  46  N.  W.  141 ; 
Young  V.  Hughes,  32  N.  J.  Eq.  372 ;  Fish  v.  Leser,  69  111.  394.  "A 
man  cannot  be  the  agent  of  both  the  buyer  and  the  seller  in  the  same 
transaction,  without  the  intelligent  consent  of  both  parties ;  nor  can 
an  agent  act  for  himself  and  his  principal,  nor  for  two  principals  on 
opposite  sides  in  the  same  transaction,  without  like  consent.  All  such 
transactions  are  voidable,  and  may  be  repudiated  by  the  principal  with- 
out proof  of  injury  on  his  part.  Nothing  will  defeat  the  right  of  the 
principal  except  his  own  confirmation  after  full  knowledge  of  all  the 
facts."  Ferguson  v.  Gooch,  94  Va.  1,  26  S.  E.  397.  40  L.  R.  A.  234. 
But,  while  this  is  true,  it  is  equally  as  well  settled  that  a  principal 
may,  upon  discoverino^  that  his  agent  has  acted  in  a  double  capacity, 
"ratify  and  confirm  his  acts,  and  thus  be  bound  in  likg.  manner  as  if  /^ 
the  agent  had  not  exceeded  his  authority,  but  had  acted  wholly  with- 
in the  powers  given  to  him.  "Where,  with  a  knowledge  of  all  the 
facts,  the  principal  acquiesces  in  the  acts  of  the  agent  under  such 
circumstances  as  would  make  it  his  duty  to  repudiate  such  acts  if  he 
would  avoid  them,  such  acquiescence  is  a  confirmation  of  the  acts 
of  the  agent."  Curry  v.  Hale,  15  W.  Va.  867;  Dewing  v.  Hutton, 
48  \\\  Va.  577,  37  S.  E.  670;  Coulter  v.  Blatchlev,  51  W.  Va.  167,  41 
S.  E.  133;  Frazier  v.  Brewer,  52  W.  Va.  306,  43  S.  E.  110.  "Where 
a  party  originally  had  a  right  of  defense  or  of  action  to  defeat  or 
set  aside  a  transaction  on  the  ground  of  actual  or  constructive  fraud, 
he  may  lose  such  remedial  right  by  a  subsecjuent  confirmation,  l)y  ac- 
quiescence, and  even  by  mere  delay  or  laches.  *  *  *  jf  the  party 
originally  possessing  the  remedial  right  has  obtained  full  knowledge 
of  all  the  material  facts  involvcfl  in  the  transaction,  has  become  fully 
aware  of  its  im[)erfcction  and  of  his  own  rights  to  impeach  it,  or 
ought,  and  might,  with  reasonable  diligence  have  become  so  aware, 
and  all  undue  influence  is  wholly  removed  so  that  he  can  give  a  per- 
fectly free  consent,  and  he  acts  deliberately,  and  with  the  intention 
of  ratifying  the  voidable  transaction,  then  his  c<inrn-mati<in  is  binding, 
and  his  remedial  right,  defensive  or  affirmative,  is  destroyed."  Pome-" 
roy's  Eq.  Jur.  §  964. 
G<)iii).rit.&.\. — 17 


7.'»8  EFFECTS    AND    CONSEQITKNCKS   OF  THE    RELATION  (Part   3 

The  rii;ht  io  ilisaffinn  was  waivoil  by  the  apitcllaut  wluu.  alter  dis- 
covery of  Mitchell's  agency  for  both  parties,  it  took  an  assignineiit 
of  the  commission  contract,  and  by  its  subsequent  neglect  and  omis- 
sion to  notify  the  appellees  that  it  would  not  be  bound  by  tlie  con- 
tract. *= 

We  see  no  error  in  the  decree  of  the  circuit  court,  and  it  is  af- 
firmed. 


II.    UXDISCLOSED    PrINCIPAI* 

(A)  Simple  Contracts 
PATERSON  V.  GANDASEQUI." 

(Court  of  Kiiiiis  Bench,  1812.     15  East,  62,  IP,  Rev.  Rep.  GS.) 

Action  for  goods  sold  and  upon  the  common  money  cotmts.  De^^ 
fendant  was  a  Spanish  merchant  who  employed  Larrazabal  <S;  Co.,  of 
London,  merchants,  to  purchase  goods  for  him  for  a  foreign  market 
upon  a  2  per  cent,  commission.  Larrazabal  &  Co.  applied  to  Pater- 
son  to  send  to  their  counting  house  an  assortment  of  silk  hose  with^ 
terms  and  prices.  Defendant  was  present,  inspected  the  samples,  and 
selected  such  as  he  required.     Larrazabal  &  Co.  gave  written  orders 

"for  a  large  supply  to  fill  defendant's  order,  but  the  invoices  wnrr  \\\\u\v 
out_ni_the  name  of  Larrazabal  &  Co.,  and  they  were  (khilnl  inr  tlu' 
goods  on  plaintiff's_bcLQks.  Soon  after,  and  before  the  credit  c\i)ir(,(l, 
Larrazabal _,&. Co..  became  insolvent,  and  therfuijon  i)laintit'ls  de- 
manded payment  of  defendant;  which  being  refused,  the  present  ac- 
tion was  brought.  At  the  trial  Lord  EHenborough  directed  a  non- 
suit. On  amotion  to  set  asi3e  the  nonsuit  a  rule  nisi  \va-  granted. 
Lord  EllEnborough,  C.  J.     The  Court  have  not  the  least  doubt 

_that_^Jt.  distinctly  appeared  that  the  defendant  was  the  person  for 
whose  use  and  whose  account  the  goods  were  bought,  and  that  the 
plaintiffs  knew  that  fact  at  the  time  of  the  sale,  there  would  not  be 
the  least  pretence  for  charging  the  defendant  in  this  action.  But  the 
doubt  is,  ivhether  that  does  sufficiently  ajDpear  by  the  evidence.  It  ap- 
pears that  the  defendant  was  present  at  the  counting-house  of  Lar- 

12  In  the  absence  of  dissent  within  a  reasonable  time,  ratification  is  pre^ 
."■uined.  As  to  what  is  a  i-easonul)le  time,  see  U.  S.  Rolling  Stock  Co.  v.  Atl.' 
A:  (;t.  West.  U.  Co.,  34  Oliio  St.  4.50,  :J2  Am.  Rep.  380  (1878). 

J 'In  Addison  v.  Gandasotiui.  4  Taunt.  .574,  11  Rev.  Rep.  089  (1S12)  Lord 
Mansfield  on  similar  facts  allowed  the  jury  to  say  whether  the  goods  were 
.soUl  to  I>;irra/.alpal  &  (,"o.,  or  to  (Jandast'(iui  through  Larrazabal  «&  Co.,  as  fac- 
tors: and  refused  to  set  aside  their  verdict  for  defendant.  See,  also,  Silver 
V.  Jordan,  130  Mass.  319  (1884).  in  which  the  contract  was  made  with  the 
agent  alrjue,  but  tin-  tliird  person  tried  to  hold  the  principal,  and  Reebe  v. 
Robert,  12  Wend.  41.3,  27  Am.  Dec.  1.32  (1834),  in  which  it  is  held  to  be  a  ((ue.s- 
tion  of  fact  to  be  determined  from  all  the  circumstances  of  the  case  wlicthcr 
the  tlilrd  person  gave  the  agent  exclusive  credit. 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  739 

razabal,  where  one  of  the  plaintiffs  had  come  by  appointment,  and  in 
lis  presence  inspected  and  seXe^.ed  such  of  the  articles  as  he  re- 
(|uired :  that  the  goods  were  afterwards  ordered  by  Larrazabal  «& 
Co.,  credit  given  to  them  and  the  invoices  made  out  in  their  name  and 
sent  to  them.     The  question  is,  whether  all  this  was  done  with  a 


Knowledge  _of  the  (kiemlant  being  t!io  principal?     The  law  luis  been 


settled  by  a  variety  uf  cases,  that  an  unknown  principal,  when  disryy- 
_ered^  is  liable  on  the  contracts  which  his  agent  makes  for  him :   but     / 

that  mus^be  takeiTwIFh  some  qualification,  and  a  party  may  preclude 
Tuniself  from  recovering  over  against  the  principal,  by  knowinylv 
jnaking  the  agent   his  debtor.     It  certainly  aiqHarr.l   i,i  mc   at  the 

trial  that  the  plaintiffs  knew  of  tlie  defendant   lieing  the   principaT^ 


C .  L-  L 


:ted..to  take  T.arrazabal  &  Co.  as  ilieir  debtors,  or  I  should" 
not  have  nonsuited  the  plaintiffs :    but  as  there  may  perhaps  be  a 

^  doubTupon  the  evidence^,  whether  .the  plaintifTs  had  a  perfect  knowl- 
^Hge^f  that  fact,  it  may  be  as  well  to  have  it  reoMH-iilrred. 

BaylEy,  J.  There  may  be  a  particular  course  of  dealing  with 
respect  to  trade  in  favour  of  a  foreign  principal,  that  he  shall  not  be 
liable  in  cases  where  a  home  principal  would  be  liable :  that  would  be 
a  question  for  the  jury.  I  have  generallv  understood  that  the  seller 
may  look  to  the  principal  when  he  di-ciwiv  liim.  unless  lie  Im-  atTan- 
3ohed  his  right  to  resort  to  him.     I  agree  that  where  the  seller  know's" 

^"The  principal  at  the  time,  and  yet  elects  to  give  credit  to  the  agent,  he 

^must  be  taken  to  have  abandoned  such  right,  and  cannot  therefore  aft-^ 
erwards  charge  the  principal.    I  think  it  should  be  reconsidered  in  this 

""case  whether  the  plaintiffs  did  so.  — — 

Rule  absolute.^* 


MEEKER  V.  CLAGIiORN. 

(Commission  of  Appeal  of  New  York,  1.S71.    41  X.  Y.  P.IO.) 

Action  by.  assignee  of  J.  B.  &  W.  W.  ComelL-tQ  recover  a  balance 
forjjQn-work  and  cut-stone.    Tl:ic_articlcs  were  furnished  for  a  build- 
mg  of  the  defendants  in  Savannah,  upon  tlic  order  of  their  architect, 
Charles   Shall.     The  defendants  claimed  that  the  articles   were   fur- 
nished by  i)laintirf's  assignors,  upon  the  credit  of  said  Shall,  and  that 
tlicy  had  paid  him  llierefor;   and  the  ])laintifF  claimed   ibat   iliey  witc  '' 
_  furnished  upon  tl                  of  said  Shall,  acting                            i!ir  Ar                  >^^**.^ 
fcndants,  and  upfni  lin  ir  credit. 
.  The  assignment  to  the  plaintiff  was  in  writing  and  ab.solutc  in  terms. 
Two  of  his  assignors  testified  in  substance,  on  cross-examination,  (hat 
"they  expected  to  receive  the  amount  recovered  in  the  a-  li.m  " 

Earl,  t!om.^'^     Tlic  principles  of  law  applicabK    i.i  •  are 

i«Tlif'  ojiinions  (»f  fJiosc  aiid    Lo   I'.laiir,  .1.).,  iirc  omitli'tl. 
I"'  P.'Tt    <f   llic   otiiiiiiiii    is  (imittfd 


^      ^1  .1 1. :  its  c  ^i^i\t-  r^>^^^' 


'40      ^'     KiFKri-s  AND  coNsr.i.)ii/Nrr.S  or  Tin:  KKi.ATioN       -it  art 

_  elementary  and  tnulisi)iitccl.    If  the  (lcfeii(lanls_\\'crc  known  to  be  J]*^' '^T      /- 
^  /l^cipaTs'Tn  the  transaction,  and  Shall  only  tlicir  agent,  then  they  ^te^t/^ 

/f))\j(l  I      ''^''"^'  rcsponsihle,  nnless  credit  was  given  exclusively  to  the  agent,  ui,... 

f^      f  \     which  event  the  agent  alone  was  responsible.     If  however  the  defend-^ 

ICO^iAJ     ^     \     ants  were  not  kno\vn  to  be  the  principals,  and  credit  was  at  the  tin^e 

//  r^cTTfo  SHaTirvvlio  was  iu  fact  an  undisclosc'd  agenTTTlTen  the  vendors 

'    could  hold  for  payment,  at  their  election,  either  the  agent  or  the  prin- 

cipals.    If  Shall  was  not  in  fact  the  agent  of  the  defendant^,  .uid  fur:^ 

nished  these  articles  to  them  upon  his  agreement  with  thcni,  then  the 

defenilants  are  not  responsible  to  the  plaintiff.  Pentz  v.  Stanton,  10 
Weiid.  271,  25  Am.  Dec.  558;  Thomson  v.  Davenport,  9  Barn.  & 
Cress.  7^;  Story  Agency,  §§  267,  446,  447,  423;  1  Am.  Lead.  Cases, 
607. 

Keeping  these  principles  of  law  in  view,  this  case  involves  only  ques- 

ri  tions  of  fact.    The  defendants  can  claim  exemption  from  liability  upon 

y  only  one  of  two  grounds  :/l.  That  Shall  was  not  their  agent,  and  that 

the  vendors  dealt  with  him  as  principal ;   or,  2? That  the  vendors  knew 

■  the  defendants  to  be  the  principals,  and  gave  the  credit  exclusively  to 
the  agent. 

As  to  the  first  ground,  there  is  some  evidence  tending  to  show  that 
y  Shall  was  the  agent  of  the  defendants,  and  acted  as  such.     *     *     * 

'  We  must  assume  that  Shall  was  in  fact  the  agent  of  the  defendants, 

and  that  the  vendors  knew  it. 

As  to  the  second  ground,  the  evidence  should  be  quite  clear  that  the . 
vendors  gave  exclusive  credit  to  the  agent  of  known  principals,  before 
we  can  hold  the  principals  exempt  from  liability.     In  all  cases,  where 
the  principals  seek  exemption  upon  the  ground  that  the  credit  was  ex- 
clusively given  to  their  agent,  this  should  clearly  appear,  and  they  have 
the  affirmative  to  show  it ;  the  natural  presumption  being,  in  all  cases, 
that  credit  is  given  to  the  principal  rather  than  to  the  agent.     It  is  suf-^ 
ficient  to  say  upon  this  branch  of  the  case,  that  there  is  no  conclusive^^ 
~— cridence  that  the  credit  was  given  by  the  vendors,  exclusively  to  the 

■  agent,  and  that  they  intended  to  look  to  him  solely  for  their  pay.  It  " 
is  true,  that  upon  the  ledger  and  day-book  of  the  vendors,  the  articles 
Were  charged  to  Shall,  and  while  this  furnishes  strong  evidence  that 
they  were  furnished  upon  his  credit,  it  does  not  show  it  conclusively ._ 
The  plaintiff  gave  some  explanation,  tending  to  weaken  the  effect  of 
this  evidence,  and  its  weight  under  all  the  circumstances  of  the  case, 
was  for  the  referee. 

The  most  that  can  be  properly  said  in  behalf  of  the  defendants  is, 
that  the  plaintiff  made  a  very  weak  case.  But  if  the  circumstances  of 
the  case,  and  the  evidence,  and  the  legitimate  inferences  to  be  drawn 
from  them  tend  in  any  degree  to  uphold  the  decision  of  the  referee,  we 
cannot  disturb  it ;   and  it  seems  to  me  that  this  is  such  a  case. 

^fhere  js  no  sufficient  evidence  that  Shall  was  tiie.ag£iit._Qi._th.e  ven- 
''"■-.  to  receiye]^ayment  for  the  articles  furnished,  in  such  a  sense  as 


Ch.5) 


LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON 


741 


to  bind  them  by  the  payment  the  defendants  made  to  hhn,  even  if  there 
iTany  competent  evidence  of  such  payment. 
■ WTtHTn  numerous  decisions  that  have  been  made  in  this  court  and 

also^in  the  Supreme  Court,  the  plaintiff,  under  the  absolute  assignment 
— in'^riting  to  him,  is  the  legal  holder  of  the  claim  against  the  defend- 
^  ants7and  the  real  party  in  interest  as  plaintiff  in  this  action. 
■ 1  am  therefore  o^e^o^nion  that  the  judgment  should  be  affirmed, 

with  costs.    All  c<^cur  e:}9Cept  Leonard,  Com.,  not  sitting. 


DARROW  V.  HORN2/PRODUCE  CO 

(Circuit  Court  of  the  United  Stat^  D.  Indiana.  1893.     57  Fed.  4G3.) 


Baker,  District  Judge. ^*     The 
complaint_is  raised  by  demurrer. 


questi'^n 
The 


^Jyy-f- 


ixA^ 


^>f  the  sufficiency  of  the 
,:l,    <o   f;ir  a-   inaurial 
to  the~decision  of  the  question  involved,  is  as  follows :     That  hcreto- 
fore,  the  21st  day  of  January,  1893,  the  plaintiffs,  at  Chicago.  111., 

sold  to  the  defendant,  through  its  agent  and  general  manager,  William 

' — Harris," a  quantity  of  butter,  as  mentioned  in  the  contract  of  sale  and 

purchase  thereof,  which  contract   was  and  is  in  writing;    that  said 

■"  contract,  although  made  for  and  on  account  of  these  plaintiffs  on  the 

—  one  hand,  and  for  and  on  account  of  the  defendant  upon  the  Qtji.er 

hand,  was  executed  only  in  the  names  of  the  said  respective  agents, 

A.  A.  Kennard  &:  Co.,  for  these  plaintiffs,  and  in  the  name  of  the 

*'  said  William  Harris,  by  the  style  of  Wm.  Harris,  for  the  defendant. 

but  as  matter  of  fact  each  of  said  agents  thereby  intended  to  bind 

his  said  principal  thereby,  and  each  of  said  agents  was  thereunto  duly 

authorized  by  his  said  principal.     *     *     *  f 

— "     It  is^  undoubtedly  true  that  parol  testimony  will  not  be  permitted  to 

co"ntrol  or  contradict  a  contract  in  writing;   but,  in  the  absence  of  any 

— Vecital  appearing  therein,  it  in  no  just  sense  contradicts  the  written 

contract  to  siiow  by  oral  testimony,  aliunde  the  writing,  that  the  names 

signed  to  the  contract  are  those  of  agents,  and  that  undisclosed  prin- 

cipals  are_lhe  real  particj&iiLinlercst.     Cpiinsel  lias  ritrd  cases  toucii-^_ 

ing  the  rule  applicable  to  sealed  instruments,     it   is  unneces.sary   to 

examine  those  cases,  because  the  writing  here  declared  on  is  a  simple 

contract,  not  under  seal. 

A  further  review  of  the  adjudged  cases  is  unnecessary,  as  the  true 
doctrine  is  found  accurately  .stated  in  the  elementary  books.  vSlory. 
Ag.  (4th  Ed.)  §  1600,  states  the  doctrine  in  these  words:  "Indeed, 
the  doctrine  niaintaiiKcl^  ijlihe  nw£e^recei^iijutJiorUies^^^^  a  far  mori 
^Comprehensive  extent.  It  is  that,  if  the  agent  possesses  due  authority 
to  make  a  written  contract  not  under  seal,  and  he  makes  it  in  his  own 

11  I';irt    nf   tlif   (iiiiiiion   Is  fiiiiiflffl. 


/ 


/ 


711!  inM'KiTs  AND  roNsiic.M'KNt'KS  OF  Till':  KKLATiON        (Part  '> 

tuiinc,  whcihor  lie  ilcscril>o>  liiiusclf  U>  be  agent  or  not,  and  whether 
TTie  principal  be  known  or  unknown,  he,  the  agent,  will  be  liable. toj^ 
be  sncd.  ami  be  entitled  to  sne  thereon,  and  his  principal  also  will  be 
liable  li^  be  sned  and  be  entitled  to  sue  thereon,  in  all  cases,  unless 
from  the  attendant  circumstances  it  is  clearly  manifested  that  an  ex- 
cTusivc  crctlit  is  given  to  the  agent,  and  it  is  intended  by  both  parties 
;iiat  no  resort  shall  in  any  event  be  had  by  or  against  the  principal 
upon  it.     The  (Kx-trine  thus  asserted  has  this  title  to  commendation 
anil  support :    that  it  not  only  furnishes  a  sound  rule  for  the  exposi- 
tion of  contracts,  but  that  it  proceeds  upon  a  principle  of  reciprocity,        / 
and  gives  to  the  other  contracting  party  the  same  rights  and  remedies      / 
against  the  agent  and  principal  which  they  possess  against  him."     Nor 
does  this   doctrine  contradict   or  vary  the  written   instrument.     The 
1  same  writer  observes:    "It  does  not  deny  that^jt  is  binding  on  those 
whom  on  the  face  of  it  if  purports  to  bindj  but  shows  that  iTarsobinds" 
anoTh'er  by  reason  that  the  act  of  the  agent  in  signing  the  agreement 
"tn'pursuance  of  his  authority  is  in  law  the  act  of  the  principal."    Ilig- 
'IJins  V.  Senior,  8  Mees.  &  W.  834,  845,  and  other  cases  cited  under 
the  above  section. 

Whart.  Ag.  §  298,  states  the  doctrine  thus :   "On  nonnegotiable  in- 
-"■'"■i-'nts.  where  the  agent  is  prima  facie  the  contracting" pafi}%"im- ' 
diouTd  appear  that  the  agent  is  the  person  exclusively  pri\  ilc.i^ed 
ur  ijuund.  the  principal  can  sue  or  be  sued,  and  in  the  latter  case  the   . 
contracting  party  can  sue  either  principal  or  agent." 

!VlecTiehV.~Ag";''§§  695-700,   discusses  tlu-  subject  of  the  liability  of 


f  undisclosed  principals,  and  of  principals  known,  but  not  mentioned 
in  contracts  executed  on  their  account,  but  signed  by  the  agent  alone, 
and  he  shows  that  in  such  cases,  unless  the  principal  in  the  mean  time 
has  in  good  faith  paid  the  agent  supposing  he  was  the  principal,  the 

I        other  party  may  overpass  the  agent,  and  sue  the  principal  in  the  first 

'  instance.  In  section  701  he  says :  "This  rule  applies  to  all  simple  con- 
tracts, whether  written  or  unwritten,  entered  into  by  an  agent  in  his 
own  name  and  within  the  scope  of  his  authority,  although  the  name 
of  the  principal  does  not  appear  in  the  instrument,  and  was  not  dis- 
closed, and  although  the  party  dealing  with  the  agent  supposed  that 
the  latter  was  acting  for  himself.     And  this  rule  obtains  as  well  in 

I  respect  to  contracts  which  are  required  to  be  in  writing  as  those  to 
whose  validity  writing  is  not  essential.  It  does  not  violate  the  prin- 
ciple which  forbids  the  contradiction  of  a  written  agreement  by  parol 
evidence,  nor  that  which  forbids  the  discharging  of  a  party  by  parol 
from  the  obligation  of  his  written  contract.  The  writing  is  not  con- 
tradicted, nor  is  the  agent  discharged;  the  result  is  merely  that  an 
additional  party  is  made  liable." 

"Whatever  the  original  merits  of  the  rule,"  says  the  court  in  Bying- 
ton  V.  Simpson,  134  Mass.  169,  45  Am.  Rep.  314,  "that  a  party  not 
mentioned  in  a  simple  contract  in  writing  may  be  charged  as  a  prin- 
cipal upon  oral  evidency^even  when  the  writing  gives  no  indication 


Ch.5) 


i%^- 


45 


jIABility  of  principal  to  third  person 


743 


of  an  intent  to  bind  any  other  person  than  the  signer  we  cannot  re- 
open it,  for  it  is  as  well  settled  as  any  part  of  the  law  of  agency." 

These  aj.ithorities  demonstrate  that  the  first  contention  of  the  de- 
fendant is  untenable.^  ^     *     *     * 

Demurrer  overruled. 


^ 


THOMSON  V.  DAVENPORT. 

(Court  of  King's  Bench,  1829.    9  Barn.  &  C.  78,  4  M.  &  R.  110,  17  E 

The  plaintiff  below  declared  for  goods  sold  and  delivered 
general  issue.    Verdict  for  plaintiff. 

Lord  TexterdEn,  C.  J.  I  am  of  opinion  that  the  direction  given 
by  the  learned  Recorder  in  this  case  was  right,  and  that  the  verdict 
was  also  right.  I  take  it  to  be  a  general  rule,  that  if  a  person  sells 
goods  (supposing  at  the  time  of  the  contract  he  is  dealing  with  a 
principal),  but  afterwards  discovers  that  the  person  with  whom  he  has 
been  dealing  is  not  the  principal  in  the  transaction,  but  agent  for  a 
third  person,  though  he  may  in  the  mean  time  have  debited  the  agent 
with  it,  he  may  afterwards  recover  the  amount  from  the  real  princi- 
pal; subject,  however,  to  this  qualification,  that  the  state  of  the  ac- 
count between  the  principal  and  the  agent  is  not  altered  to  the  preju- 
dice of  the  principal.  On  the  other  hand,  if  at  the  time  of  the  sale 
the  seller  knows,  not  only  that  the  person  who  is  nominally  dealing 
with  him  is  not  principal  but  agent,  and  also  knows  who  the  principal 
really  is,  and,  notwithstanding  all  that  knowledge,  chooses  to  make 
the  agent  his  debtor,  dealing  with  him  and  him  alone,  then,  according 
to  the  cases  of  Addison  v.  Gandassequi,  4  Taunt.  574,  and  Paterson 
V.  Gandasequi,  15  East,  62,  the  seller  cannot  afterwards,  on  the  fail- 
ure of  the  agent,  turn  round  and  charge  the  principal,  having  once  M  ^  ~n 
made  his  election  at  the  time  when  he  had  the  power  of  choosing  ' 

between  the  one  and  the  other.     The  present  is  a  middle  case.     At  -^    |^     ^         ^ 
the  time  of  the  dealing  for  the  goods,  the  plaintiffs  were  informed  *  /?         -1 

that  McKune,  who  came  to  them  to  buy  the  goods,  was  dealing  for  2^  j^J^  .  -  / 
another,  that  is,  that  he  was  an  agent,  but  they  were  not  informed 

iTSoe  also,  III  re  r.alciiiiiii.  7  ^l/f•.  Ucp-  <>'5"''.  -•'^  N.  Y.  Supp.  .'tf.  (IS'.M); 
Llndoke  Laud  Co.  v.  L.'vy.  7<i  Mimi/'.iH,  79  N.  W.  ^14  (1S99):  UarUiT  v.  Cmt- 
vcy,  S.'{  111.  l'^4  (lS7<i),  appiiivcd  'J\  llcywood  Hros.  Co.  v.  Andrews,  S9  111. 
Api'.  19.'5  (19(>(»i;  Kdwards  v.  <  Jil/.-m.ist.T,  i\\  Kan.  Ml,  :>'.)  I'ac  '-'.V.l  (IS'.f.ti; 
liarlire  v  (Mxidalc.  L'S  dr.  Kir),  f\.  WS  I'ac.  t;7,  -l.'S  I'ac.  .'578  (IsiiC);  aiitc.  p. 
4Gb-  Wa.ldill  v.  Si-lin-c.  ss  Va.  /nii.  1  1  S.  K.  M9.  29  Am.  St.  H»'P.  7(!('.  (lMt2); 
Mechanics'  Bank  v.  Bank  of  /oluml.la.  r,  Wheat.  WM,  5  L.  Kd.  100  (1.S20|. 
{•.'.specially,  see  the  Interest iiik'/reviiw  of  the  authorities  In  Chandler  v.  Coe. 
54    N.    11.   501    (1874).  /  ^  ,    ,, 

Cf.  Kelly  V.  Thuev.  lOli  .Mo/.VJ-J.  1.'  S.  \V.  ('.2  (1S90),  5n  which  the  court  held 
the  contract  sliowcd  Imlli  pj/lics  intended  that  no  resort  should  h<'  had  hy 
or  nyalnst  the  imdisr  h.scd  irliK  ii'.il.  and  Kayl<.n  v.  nariielt.  1 IC  .\.  ^.  <'.•_•.., 
2.S  N.  K.  24  (]SS9),  ill  wlii<  h  /he  uiidi-cl'>sed  nrliiclp.-il  was  held  Ji.ilile.  allhouKli 
it  was  shown  the  third  p.-rJ-.n  w..iild  not  h.ave  dejilt  wllh  hliii  If  he  had  Ix-eii 
disclosed. 


^ 


714  ErFi:cTS  and  coNsKQiKNrKs  OF  riiH  KRLATioN       (Part  3 

who  tlie  principal  was.  They  liail  not,  tlu  rrlOrc,  at  that  time  the 
means  of  makins^  their  election.  It  is  true  that  they  might,  perhaps, 
have  obtained  those  means  if  they  had  made  further  incjuiry ;  but 
they  made  no  further  inquiry.  Not  knowing  who  the  principal  really 
was,  they  had  not  the  power  at  that  instant  of  making  their  election. 
That  being  so.  it  seems  to  me  that  this  middle  case  falls  in  substance 
and  efTect  within  the  iirst  proposition  which  I  have  mentioned,  the 
case  of  a  person  not  known  to  be  an  agent;  and  not  within  the  sec- 
ond, where  the  buyer  is  not  merely  known  to  be  agent,  but  the  name 
of  his  principal  is  also  know^n.  There  may  be  another  case,  and  that 
is  where  a  British  merchant  is  buying  for  a  foreigner.  According  to 
the  universal  understanding  of  merchants,  and  of  all  persons  in  trade, 
the  credit  is  then  considered  to  be  given  to  the  British  buyer,  and  not 
to  the  foreigner.  In  this  case,  the  buyers  lived  at  Dumfries ;  and  a 
question  might  have  been  raised  for  the  consideration  of  the  jury, 
Whether,  in  consequence  of  their  living  at  Dumfries,  it  may  not  have 
been  understood  among  all  persons  at  Liverpool,  where  there  are 
great  dealings  with  Scotch  houses,  that  the  plaintiffs  had  given  credit 
to  McKune  only,  and  not  to  a  person  living,  though  not  in  a  foreign 
country,  yet,  in  that  part  of  the  king's  dominions  which  rendered  him 
not  amenable  to  any  process  of  our  courts?  But,  instead  of  directing 
the  attention  of  the  Recorder  to  any  matter  of  that  nature,  the  point 
insisted  upon  by  the  learned  counsel  at  the  trial  was,  that  it  ought  to 
have  been  part  of  the  direction  to  the  jury,  that  if  they  were  satisfied 
the  plaintiffs,  at  the  time  of  the  order  being  given,  knew  that  McKune 
was  buying  goods  for  another,  even  though  his  principal  might  not 
be  made  known  to  them,  they,  by  afterwards  debiting  McKune,  had 
elected  him  for  their  debtor.  The  point  made  by  the  defendant's 
counsel,  therefore,  was  that  if  the  plaintiffs  knew  that  McKune  was 
dealing  with  them  as  agent,  though  they  did  not  know  the  name  of 
the  principal,  they  could  not  turn  round  on  him.  The  Recorder 
thought  otherwise:  he  thought  that  though  they  did  not  know  that 
McKune  was  buying  as  agent,  yet,  if  they  did  not  know  who  his 
principal  really  was,  so  as  to  be  able  to  write  him  down  as  their 
debtor,  the  defendant  was  liable,  and  so  he  left  the  question  to  the 
jury,  and  I  think  he  did  right 'in  so  doing.  The  judgment  of  the 
court  below  must  therefore  be  affirmed. 

BavlEy,  J.  There  may  be  a  course  of  trade  by  which  the  seller  will 
be  confined  to  the  agent  who  is  buying,  and  not  be  at  liberty  at  all  to 
look  to  the  principal.  Generally  speaking,  that  is  the  case  where  an 
agent  here  buys  for  a  house  abroad.  There  may  also  have  been  evi- 
dence of  a  course  of  trade,  applicable  to  an  agent  living  here  acting 
for  a  firm  resident  in  Scotland.  But  that  does  not  appear  to  have 
been  made  a  point  in  this  case,  and  it  is  not  included  in  the  objection 
which  is  now  made  to  the  charge  of  the  Recorder.  In  my  opinion, 
the  direction  of  the  Recorder  was  right ;  and  it  was,  with  the  limits  I 
have   mentioned,  perfectly  consistent   with   the  justice   of   the  case. 


Ch.  oj  "  ""      LIAfelLITY    OF    PRINCIPAL    T(F  THIRD    PERSON/;      .  lA^ 

\\'here  a  purchase  is  made  by  an  agent,  the  agent  does  not  of  neces* 
sity  so  contract  as  to  make  himself  personally  liable;    but  he  may  do  d /t^^X-c-^^^T^^^ 
so.    If  he  does  make  himself  personally  Uable,  it  does  not  follow  that^^^-^,,^  <^_<^  ^c^ «/ 
the  principal  may  not  be  liable  also,  subject  to  this  quahfication,  that-/  ^     -      ^ 

the  principal  shall  not  be  prejudiced  by  being  made  personally  liable,  ^l/i-'t<^ 

if  the  justice  of  the  case  is  that  he  should  not  be  personally  liable. 
Jf  the  principal  has  paid  the  agent,  or  if  the  state  of  accounts  between 
the  agent  here  and  the  principal  would  make  it  unjust  that  the  seller 
should  call  on  the  principal,  the  fact  of  payment,  or  such  a  state  of 
accounts,  would  be  an  answer  to  the  action  brought  by  the  seller 
where  he  had  looked  to  the  responsibility  of  the  agent.  But  the 
seller,  who  knows  who  the  principal  is,  and  instead  of  debiting  that 
principal,  debits  the  agent,  is  considered,  according  to  the  authorities 
which  have  been  referred  to,  as  consenting  to  look  to  the  agent 
only,  and  is  thereby  precluded  from  looking  to  the  principal.  But 
there  are  cases  which  establish  this  position,  that  although  he  debits 
the  agent  who  has  contracted  in  such  a  way  as  to  make  himself  per- 
sonally liable,  yet,  unless  the  seller  does  something  to  exonerate  the 
principal,  and  to  say  that  he  will  look  to  the  agent  only,  he  is  at  lib- 
erty to  look  to  the  principal  when  that  principal  is  discovered.  In 
the  present  case  the  seller  knew  that  there  was  a  principal ;  but  there 
is  no  authority  to  show  that  mere  knowledge  that  there  is  a  principal, 
destroys  the  right  of  the  seller  to  look  to  that  principal  as  soon  as  he 
knows  who  that  principal  is,  provided  he  did  not  know  who  he  was 
at  the  time  when  the  purchase  was  originally  made.  It  is  said,  that 
the  seller  ought  to  have  asked  the  name  of  the  principal,  and  charged 
him  with  the  price  of  the  goods.  By  omitting  to  do  so,  he  might 
have  lost  his  right  to  claim  payment  from  the  principal,  had  the  latter 
paid  the  agent,  or  had  the  state  of  the  accounts  between  the  princijial 
and  the  agent  been  such  as  to  make  it  unjust  that  the  former  slunild 
be  called  upon  to  make  the  payment.  But  in  a  case  circumstanced  as 
this  case  is,  where  it  does  not  appear  but  that  the  man  who  has  had 
the  goods  has  not  paid  for  them,  what  is  the  justice  of  the  case? 
That  he  should  pay  for  them  to  the  seller  or  to  the  solvent  agent,  or 
to  the  estate  of  the  insolvent  agent,  who  has  made  no  payment  in  re- 
spect of  these  goods.  The  justice  of  the  case  is,  as  it  seems  to  mo, 
all  on  one  side,  namely,  that  the  seller  shall  be  paid,  and  that  the 
buyer  (the  princii)ar)  shall  be  the  person  to  pay  him,  provided  he 
has  not  paid  anybody  else.  Now,  upon  the  evidence,  it  appears  that 
the  defendant  harl  the  goods,  and  has  not  paid  for  them  either  to 
McKune  or  to  the  present  i)laintifTs,  or  to  anybody  else.  He  will  be 
liable  to  pay  for  them  either  to  the  plainlifTs  or  to  McKune's  estate. 
Tlie  justice  of  the  case,  as  it  seems  to  me,  is,  that  he  should  pay  the 
plaintiffs,  who  were  the  sellers,  and  not  any  other  person.  I  am. 
therefore,  of  opinion  that  the  direction  of  the  Recorder  was  right. 

LiTTLKDALE,  J.     The  general  principle  of  law  is,  that  the  seller 
shall  have  his  remedy  against  the  principal,  rather  than  against  any 


7M5  KKFKCTS    AND    I'ONSlUjri^NCl'.S    OK   TIIK    lUOLATION  (Part    3 

otlier  person.  Whore  floods  arc  l)OUi;lit  liy  an  aj;cnt,  wlio  docs  not  at 
the  time  ilisclose  tliat  lie  is  actintj  as  aqent,  the  vendor,  allhoush  he 
has  dehitetl  tlie  ag^ent,  may,  upon  discovcrins^  the  principal,  resort 
to  him  for  payment.  Rnt  if  the  principal  be  known  to  the  seller  at 
the  time  when  he  makes  the  contract,  and  he,  with  a  full  knowledge 
of  the  prineiiial,  chooses  to  debit  the  assent,  he  thereby  makes  his 
election,  ami  cannot  afterwards  charge  the  principal.  Or  if  in  such 
case  he  debits  the  principal,  he  cannot  afterwards  charge  the  agent. 
There  is  a  third  case  ;  the  seller  may,  in  his  invoice  and  bill  of  parcels, 
mention  both  principal  and  agent :  he  may  debit  A.  as  a  purchaser 
for  goods  bought  through  B.,  his  agent.  In  that  case,  he  thereby 
makes  his  election  to  charge  the  principal,  and  cannot  afterwards  re- 
sort to  the  agent.  The  general  principle  is,  that  the  seller  shall  have 
his  remedy  against  the  principal,  although  he  may  by  electing  to  take 
the  agent  as  his  debtor  abandon  his  right  against  the  principal.  The 
present  case  differs  from  any  of  those  wdiich  I  have  mentioned.  Here 
the  agent  purchased  the  goods  in  his  own  name.  The  name  of  the 
principal  was  not  then  known  to  the  seller,  but  it  afterwards  came  to 
his  knowledge.  It  seems  to  me  to  be  more  consistent  with  the  gen- 
eral principle  of  law,  that  the  seller  shall  have  his  remedy  against  the 
principal,  rather  than  against  any  other  person,  to  hold  in  this  case 
that  the  seller,  who  knew  that  there  was  a  principal,  but  did  not  know 
who  that  principal  was,  may  resort  to  him  as  soon  as  he  is  discov- 
ered. Here  the  agent  did  not  communicate  to  the  seller  sufficient  in- 
formation to  enable  him  to  debit  any  other  individual.  The  seller 
was  in  the  same  situation,  as  if  at  the  time  of  the  contract  he  had  not 
known  that  there  was  any  principal  besides  the  person  with  whom 
he  was  dealing,  and  had  afterwards  discovered  that  the  goods  had 
been  purchased  on  account  of  another;  and,  in  that  case,  it  is  clear 
that  he  might  have  charged  the  principal.  It  is  said,  that  he  ought 
to  have  ascertained  by  inquiry  of  the  agent  who  the  principal  was,  but 
I  think  that  he  was  not  bound  to  make  such  inquiry,  and  that  by- 
debiting  the  agent  with  the  price  of  the  goods,  he  has  not  precluded 
himself  from  resorting  to  the  principal,  whose  name  was  not  disclosed 
to  him.  It  might  have  been  made  a  question,  whether  it  was  not  a 
defence  to  this  action  that  the  principal  resided  in  Scotland.  But 
that  was  not  a  point  made  at  the  trial,  nor  noticed  in  the  bill  of  ex- 
ceptions ;  we  cannot,  therefore,  take  it  into  our  consideration.  For 
the  reasons  already  given,  I  think  the  plaintifif  is  entitled  to  recover. 

Judgment  afifirmed. 

Pahkf.,  J.,  having  been  concerned  as  counsel  in  the  cause,  gave  no 
opinion. 


Ch.5) 


LIABILITY    OF    PRINCIPilT^O    THIRD    PERSON 


HEALD  V.  KEX\A 


(Court  of  Exchequer,  lSo5.     10  Exch.  7o9,  3  C.  L.  R.  G12,  1  Jiir^N.  S.]  70, 
24  L.  J.  Exch.  7G,  3  W.  R.  17G.) 


Declaration  for  goods  sold  and  delivered.     Plca,i-mat  tne  goo 
were  sold  to  tlie  agent  of  defendant,  to  whom  alone  credit  was  gi 
and  who__was  treated  as  a  principal  until  after  defendant  had  paid 
and  settled  with  the  agent.    Demurrer  and  joirTderT 

Pollock,  C.  B.  I  am  oi  opinion  that  the  plea  is  bad.  It  comes 
shortly  to  this. — A  person  employs  his  agent  to  purchase  goods  for 
him,  with  authority  to  pledge  his  credit.  The  agent  does  so,  and  thus 
creates  a  debt ;  and  I  agree  with  the  remark  made  by  my  Brother 
Parke,  that  all  the  cases  in  which  the  principal  has  been  held  to  be 
discharged,  are  cases  in  which  the  seller  has  enabled  the  agent  to 
misrepresent,  or  where  the  agent  by  some  conduct  adopted  by  the 
seller  has  placed  Hs  princTparTira'w'^orse  situation  than  that  he  ought 
to  be  m.  TlitTptea  contains  nothing  of  that  sort.  It  merely  states 
that  tlie  plaintiffs  treated  Taylor  as  the  principal,  and  that  the  defend- 
ant bona  fide  settled  with  him. 

Parke,  B.  I  am  of  the  same  opinion.  The  plea  simply  states, 
that,  after  the  contract  was  entered  into  between  the  plaintiffs  and  a 
third  party,  the  agent  of  the  defendant,  under  circumstances  which 
rendered  the  defendant  liable  upon  it,  the  latter  paid  the  agent.  I 
am  of  opinion  that  this  is  no  defence  to  the  action.  It  is  clear,  that,  if 
a  person  orders  an  agent  to  make  a  purchase  for  him,  he  is  bound  to 
see  that  the  agent  pays  the  debt;  and  the  giving  the  agent  money 
for  that  purpose  does  not  amount  to  payment,  unless  the  agent  pays 
it  accordingly.  But  there  are  no  doubt  cases  and  dicta,  which,  unless 
they  be  understood  with  some  qualification,  afford  ground  for  the 
position  taken  by  the  counsel  for  the  defendant.  First,  tliere  is  the 
dictum  of  Bayley,  J.,  in  Thomson  v.  Davenport,  where  that  learned 
Judge  lays  down  the  rule,  that  "if  the  agent  does  make  himself  pcr- 
snt]filly  liable,  it  docs  not  follow  that  the  prmcipal  may  not  be  liable 
also,  subject  to  this  (lualification.  that  the  principal  shall  ii"!  he  preju- 
diceiLhy-bfiing  di.-mIc  iiri-~.)n;ill\   li.iMr,  if  ilir  in^lirc  ..I   t!.  ihat 

he   should   not   \>v   ])rrsiiii;ill\    li,'  '     "       \n.l    Ih'    (Inn    |nimnM>    o.  say, 

"it  the  pruTcT]";?!!  lias  paid  ilu    ,  i    n   ilir  m;ii,-  <.t  accounts  be- 

tweenTnc  agent  here  and  the  principal  would  make  lijiiiJKSt  that  the 
■ — ggn^T-  shoiild  call  on  the  principal,  the  fact  of  i)ayinciit  or  such  a  state 
"oraccounts  would  be  an  answn-  i^  ;iii  ;nii.Hi  Ihmh-Ih  1'>  li"  <  IKt, 
where  he  had  looked  to  the  responsibility  of  the  agent."  I  he  ex- 
pression, "make  it  unjust,"  is  very  vague;  but  if  rightly  understood, 
what  the  learned  judge  said  is,  no  doubt,  true.  If  the  conduct  of  the 
.seller  would  make  it  unjust  for  him  to  call  uj)on  the  buyer  for  the 
money;  as  for  example,  where  the  princii)al  is  induced  by  the  con- 
duct of  the  seller  to  pay  his  agent  the  money  on  the   faith  that  the 


^ 


NUiXAurvL^ 


y 


748  EFFECTS   AND    CONSEQTTENCKS   OF   THE    UEr.ATION  (Part   \i 

agent  and  seller  have  come  (o  a  settK'nu'iit  on  tlu-  inattrr,  or  if  any 
representation  to  that  clTeot  is  made  hy  the  seller  t'ltlur  hy  words  or 
conduct,  the  seller  cannot  afterwards  throw  off  the  mask  and  sue  the 
principal.  It  wouUl  be  unjust  for  him  to  do  so.  P)Ut  I  think  that 
there  is  no  case  of  this  kind  where  the  plaintiff  has  been  precluded 
from  recovering,  unless  he  has  in  soine  way  contributed  either  to  de- 
ceive the  ilefendant  or  to  induce  him  to  alter  his  position. ^^  This  was 
the  ground  of  the  decision  in  Wyatt  v.  The  Marquis  of  Hertford, 
where  the  seller  took  the  security  of  the  agent  unknown  to  the  prin- 
cipal and  gave  the  agent  a  receipt  as  for  the  money  due  from  the  prin- 
cipal, in  consequence  of  which  the  principal  dealt  differently  with  his 
agent  on  the  faith  of  such  receipt,  and  it  Avas  properly  held  that  the 
seller  could  not  sue  the  principal.  So  in  the  case  put  by  Lord  Fdlen- 
borough,  C.  J.,  in  Kymer  v.  Suwercropp,  the  observations  of  that 
learned  Judge  are  perfectly  correct ;  for  the  fact  of  the  seller's  allow- 
ing the  time  for  payment  to  elapse  might  afford  evidence  of  deceit 
on  his  part,  and  of  his  having  thereby  induced  the  principal  to  pay 
the  agent.  Neither  does  the  case  of  Smyth  v.  Anderson,  nor  the  elab- 
orate judgment  of  my  Brother  Maule,  contain  anything  at  variance 
with  the  principle  I  have  stated.  He  adopts  the  proposition  ex- 
pounded by  Bayley,  J.,  that  the  seller  cannot  recover  against  the  prin- 
cipal, if  it  be  unfair  for  him  to  do  so.  In  Smyth  v.  Anderson,  which 
contains  a  good  illustration  of  this  principle,  the  agent  purchased 
goods  on  account  of  his  principal  who  resided  abroad;  but  at  the 
time  of  the  purchase,  although  he  did  not  inform  the  seller  who  his 
principal  was,  the  invoice  stated  that  the  goods  "were  bought  on 
account  of  B.,"  the  principal.  The  seller  drew  certain  bills  of  ex- 
change on  the  agent,  who  became  insolvent  before  the  bills  arrived 
at  maturity.  The  principal,  after  having  received  advice  of  the  pur- 
chaser, and  of  the  acceptance  of  the  bills  by  the  agent,  made,  large 
remittances  on  account  of  the  goods  to  the  agent,  who  at  the  time 
of  his  stoppage  was  largely  indebted  to  his  principal.  My  Brother 
Maule  says,  the  Court  were  of  opinion  that  under  such  circumstances 

18  In  Armstrong  v.  Stokes.  L.  R.  7  Q.  B.  598.  41  L.  J.  Q.  B.  258,  26  L.  T. 
Rep.  (X.  S.)  872,  21  W.  R.  52  (1872),  the  court  i)referred  the  dictum  of  Thorn- 
sou  V.  Davt-nport  to  the  rule  of  Ileald  v.  Keiiworthy,  but  in  Irvine  v.  Watson, 
L.  R.  5  Q.  B.  D.  414,  40  L.  J.  Q.  B.  531,  42  L.  T.  Rep.  (N.  S.)  810  (1880),  the 
court,  after  a  delilicrate  consideration  of  the  cases,  preferred  the  rule  that 
the  undisclosed  principal  is  discharj,'ed,  upon  payment  to  the  agent,  only  when 
he  Is  misled  by  some  conduct  of  the  third  person  into  the  belief  that  the 
UKf-nt  had  settled  with  the  third  per.son,  and  pays  the  agent  in  reliance  upon 
^-ti<-h    belief. 

To  the  .same  etTect  is  New  York  Clounty  Bank  v.  Stein,  24  Md.  447  (180G) ; 
r'>onnell  v.   Briggs,  45  Barb.  470  (1800). 

The  contrary  doctrine  is  approved  in  Harder  v.  Continental  Card  Co.,  64 
Mi.sc.  Rep.  8(i.  117  N.  Y.  Supp.  1001  (llJOO)  (citing  T^aing  v.  Butler,  87  Ilun,  144 
rissT,]  and  Knapp  v.  Simon,  96  N.  Y.  284  [1884]);  Fradley  v.  Ilyland  (C.  C.) 
37  Fed.  49.  2  L.   R.   A.  749  (1888). 

As  to  what  would  be  an  injustice  to  the  principal,  see  Smytji  v.  Anderson, 
7  C.  B.  21.  18  Jur.  41,  18  L.  J.  C.  P.  109,  62  E.  C.  L.  21  (1849) ;  Yennl  v.  Oceaa 
Nut.  Bank,  5  Daly,  421  (1874). 


/ 


Ch.5) 


LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON 


it  was  unfair  and  unjust  to  allow  the  seller  to  receive  the  value  of  the 
goods  from  the  principal.  I  think  that  there  is  no  authority  for 
saying  that  a  payment  made  to  the  agent,  as  in  this  case,  precludes 
the  seller  from  recovering  from  the  principal,  unless  it  appears  that 
he  has  induced  the  principal  to  believe  that  a  settlement  has  been 
made  with  the  agent.  There  is  no  averment  of  that  kind  here,  and 
consequently  the  plaintiffs  are  entitled  to  recover. 

AldivRSON,  B.  I  am  of  the  jame  opinion.  It  is  clear  that  the  de- 
fendant, who  is  the"  prmcipal  Tn  the  transaction,  authorized  the  agent 
loTconLracr'tlie  debt  on  his  account;  the  defendant  afterwards  paid 
his  agent  money,  which,  however,  he  did  not  pay  over  to  the  plain- 
tiffs. Now  the  "defendant  is  not  excused  from  seeing  that  the  plain- 
tiffs are  paid,  unless  the  latter  by  their  acts  induced  the  defendant  to 
make  the  payment  to  their  agent.  Where  the  seller  trusts  the  agent 
only,  and  says  that  he  will  consider  him  as  the  only  party  liable, 
the  agent  alone  is  responsible,  and  the  seller  cannot  proceed  agauist 
the  principal.  But  there  must  be  some  act  on  the  part  of  the  creditor 
to  warrant  us  in  saying  that  the  payment  by  the  debtor  to  his  agent 
is  to  be  treated  as  a  payment  to  the  creditor.  Where  a  creditor  by 
his  conduct  induces  the  debtor  to  pay  a  third  party,  and  therel)y 
alters  his  debtor's  position,  it  would  be  unjust  to  call  upon  the  debtor 
to  pay  the  amount  of  the  debt  to  the  creditor.  But  there  is  nothing 
of  that  sort  in  this  case,  and  consequently  the  defendant  is  not  dis- 
charged. 

Judgment  for  the  plaintiffs. 


(B)  Contracts  Under  Seal 

VAN  DYKE  v.  VAN  DYKE. 
(Supreme  Court  of  Georgia,  1905.  12.3  Ga.  686,  51  S.  E.  5S2,  3  Ann.  Cas.  97S.) 
Declaration  on  a  note  under  seal  payable  to  the  order  of  plaintiff. 
and  signed  by  E.  A.  Van  Dyke,  husband  of  defendant.  The  note  was 
given  for  money  borrowed  by  the  maker,  as  plaintiff  supposed  for  his 
own  use.  She  afterward Jearned  that  it  was  used  for  paving:  an  as- 
sessmcnt  onTstock  ownedTnd  since  sold  hil.dcfcndant.     On  motioji^ 

""iHecourt  dismissed  the  action  and  plaintiff  excepted. 

— TTuMPKiN,  J.    [After  stating  the  facts:]    The  gcncralj:uic_w.itii_rcf.-- 
eiTiKcM^^Jioldinga^ 

^  his  auent  is^hus  stated  in  Civ.  Code  l.S9.^  §  3024:  Tlf  an  aucnt  faiN 

^to  disclose  hiriMMTiapTn7>cC"vvlien   discovered,   tlfc   person 
with  thc_agcnt  may  go  directly  upon  the  principal,  under  th- 
unless  the  jVincipal  shall  have  previously  accounted  an  ' 
the  agent."  \rhis  is  a  codification  of  the  law  as  it  .stoo.l  ,. .  ..   >-  i:. 
original  Ck/c  oi  1H63,  and  is  not  an  innovation  resulting  from  legis- 
lative enactnient.     In  Lenney  v.  l-inliy,  IIS  Ca.  718,  45  S.  E.  593,  it 


/UAAM 


rno 


EFFII^S    AND    CONSRQUENCKS   OF  TUE    KELATION  (Part   S 


L- 


.a 


(.L 


t 


V*- 


to/ 


was  lioKl  tli^it  :|  "The  rule  that  an  uiulisclosed  priiicii)al  shall  stand 
liable  for  tlio  y>n(ract  of  his  agent  does  not  apply  wIkmi  the  contract 
is  lUHicr  seal,  j  Aocordin<;ly,  a  lease,  luider  seal,  executed  by  an  agent 
as  lessee  in  iiis  individual  name,  and  which  docs  not  purport  to  be 
executed  on  behalf  of  the  principal,  is  not  binding  upon  the  latter, 
although  it  appears  from  extrinsic  evidence  that  the  lessee  was  the 
general  agent  to  conduct  a  business  for  his  principal,  and  that  the 
premises  were  leased  to  be  used  in  such  business."  We  are  asked  to 
review  and  reverse  this  decision,  but  the  court  declines  to  change  the 
ruling  then  made.  An  examination  of  the  authorities  cited  in  the  opin- 
■ion  will  show  that  it  was  not  without  foundation.  In  Merchants'  Bank 
v.  Central  Bank,  1  Ga.  418,  44  Am.  Dec.  665,  ante,  p.  460,  it  was  said : 
"In  the  execution  of  instruments  under  seal  by  an  agent  the  general  rule 
is  that  it  must  purport  upon  its  face  to-be  the  contract  oi  the  princi- 
pal, and  his  name  must  be  inserted  in  it,  and  signed  to  it.'/  See,  also, 
Compton  V.  Cassada,  32  Ga.  428  (compare  Tenant  v.  Blalcker,  27  Ga. 
418;  as  to  the  execution  of  a  power,  see  Terry  v.  Roaalian,  79  Ga. 
278,  5  S.  E.  3S,  11  Am.  St.  Rep.  420);  Graham  v.  Cami/ell,  56  Ga. 
258.  In  1  Am.  &  Eng.  Enc.  L.  (2d  Ed.)  1141,  it  is  said :  /it  has  l3een 
laid  down  as  a  common-law  doctrine  that,  when  a  contract  is  rnade]^^ 
by  an  instrument  under  seal,  no  one  but  a  party  to  the  instrument 
is  liable  to  be  sued  upon  it,  and  therefore,  if  made  by  an  agent  ol*  at- 
torney, it  must  be  in  the  name  of  the  princii)al,  in  \rder  that  li/  may^ 
be  a  party,  because  otherwise  he  is  not  bound  by  it.l  *  *  *  /  Some 
of  the  later  decisions,  however,  qualify  this  doctrine  by  holding  that 
when  a  sealed  contract  has  been  executed  in  sucn  form  that  it  is  in  , 
law  the  contract  of  the  agent,  and  not  of  the  principal,  but  the  prin-  ^ 
cipal's  interest  in  the  contract  appears  upon  its  face,  and  he  has  re- 
ceived the  benefit  of  the  performance  by  the  other  party,  and  has 
ratified  and  conf*med  it  by  acts  in  pais,  and  the  contract  is  one  which 
would  have  been  Valid  without  a  seal,  the  instrument  will  be  binding 
on  the  principal.'!  In  the  note  attached  to  tlie_declaratjon__tliLLix-is — 
JlQili"ig^-taanchca^e_that_it_\^^  as  agent,-jCtf— 

.that  hisjwif^-ma^m^y  way  connected  with  it._Indceil-ji£Lj-eference__ 
.tn  hfr  nr  to  any  agency  is  made  in_the_paper.  See  Briggs  v.  Part- 
ridge, 64  N.  Y.  357,  21  Am.  Rep.  617;  Mechem  on  Agency,  §§  701, 
702,  and  note;  Clark  on  Contracts,  §  275,  p.  519;  Bishop  on  Con- 
tracts, §§  426,  1070;  Evans  v.  Wells  &  Spr^g,  22  Wend.  324— in 
which  several  interesting  opinions  were  filed.  jSomc  courts  hold  that 
negotiable  instruments  do  not  foil  within  thelgencralnrle;  amd  that  ' 
an  unnamed  principal  cannot  be\sued  on  them.  See  Clark  on  Con- 
tracts, §  275,  p.  519  and  notes. 

.  It  is  contended  that  the  rule/ applies  only  to  instruments  which 
were  specialties  at  common  lav/,  as  to  which  a  seal  was  necessary ; 
and  that  in  cases  where  the  instrument  would  be  valid  without  a  seal 
the  addition  of  a  seal  would  not  bring  it  within  the  rule.  There  are 
some  authorities  holding  or  tending  to  hold  this  to  be  the  rule.    See 


/ 

Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  751 


^f 


Stowell  V.  Eldred,  39  Wis.  614;  Wagoner  v.  Watts,  44  N.  J. 
Law,  126;  Shuetze  v.  Bailey,  40  Mo.  69,  75.  The  distinction  drawn 
in  this  line  of  authorities,  however,  has  not  been  followed  in 
Georgia.  In  the  case  of  Lenney  v.  Finley,  supra,  the  instrument 
under  consideration  was  a  lease  for  a  term  less  than  two  years, 
which,  under  our  law,  conveyed  no  interest  in  land,  and  could 
have  been  executed  without  any  seal.  In  Rowe  v.  Ware,  30  Ga. 
278,  it  was  held  that  "the  signature  of  a  sealed  instrument  by  an 
agent,  the  principal  not  being  present,  is  not  binding  on  the  princi- 
pal, unless  the  authority  of  the  agent  be  under  seal."  In  the  body  of 
the  opinion  it  is  said :  "But  it  was  said  that  the  bond  need  not  have 
been  under  seal,  though  in  point  of  fact  it  was  so,  and  therefore  the 
seal  might  be  disregarded.  Not  so.  The  question  was  whether  Tay- 
lor had  authority  to  sign  the  names  of  Hooks  and  Herndon  to  this 
bond  as  it  is — sealed  as  it  is.  Whether  a  bond  without  a  seal  (to  use, 
for  convenience,  a  short  but  inaccurate  phrase)  would  be  valid  has 
nothing  to  do  with  the  case,  for  there  was  no  such  paper  in  the  case." 
This  was  reaffirmed  in  Overman  v.  Atkinson,  102  Ga.  750,  29  S.  E. 
758. 

It  is  further  contended  that  a  note  under  seal  does  not  fall  within 
this  rule.  At  common  law  a  note  under  seal  was  unknown.  Such  an 
instrument  more^  nearlv  approximated  a  "single  bond."  Broom's 
Common  Law  (9th  Ed.)  272,  484;  Sivell  v.  Hogan,  119  Ga.  170. 
46  S.  E.  67.  It  is  unnecessary  to  discuss  the  exact  status  of  a  scaled 
note.  In  Albertson  v.  Holloway,  16  Ga.  ^77,  its  nature  was  consid- 
ered, and  it  was  held  that  a  plea  of  failure  of  consideration  could  be 
made  to  a  suit  based  on  it.  In  other  cases  there  have  been  intima- 
tions that  a  presumption  of  a  consideration  arose  from  the  presence 
of  a  seal,  but  that  it  might  be  rebutted.  See  Neil  v.  Bunn,  58  Ga. 
583;  Simms  v.  Lide,  94  Ga.  553,  21  S.  E.  220.  In  Weaver  v.  Cos- 
by, 109  Ga.  310,  34  S.  E.  680,  Mr.  Justice  Lewis  said  that  an  instru- 
ment then  before  the  court,  being  under  seal,  "raised  a  strong  pre- 
sumption of  law"  that  it  was  founded  u]ion  a  consideration.  In  v^ivell 
v.  Hogan,  119  Ga.  167,  169,  170,  46  S.  E.  67,  the  opinion  was  strongly 
expressed,  although  no  direct  ruling  was  matle,  that  a  seal  raises  a 
conclusive  presumption  of  the  existence  of  a  consideration  at  the 
time  the  contract  was  entm-d  into,  but  not  that  it  has  not  since  failed, 
either  wholly  or  partially  ;  and,  accordingly,  that  want  of  considera- 
tion cannot  be  pleaded,  but  failure  of  consideration  may  be.  Whellier 
thc  presumption  thus  raised  is  disputable  or  conclusive,  the  fact  of 
being  under  seal  gives  to  the  note  a  character  which  it  would  not 
have  otherwise.  Moreover,  the  statute  of  limitations  in  regard  to  a 
note  under  seal  and  one  without  a  seal  is  not  the  same.  Civ.  Code 
1895.  §§  3765,  3767.  Section  3634  of  the  Civil  Code  of  1895  reads 
as  follows:  "A  specialty  is  a  contract  under  seal,  and  is  considered 
by  the  law  as  entered  into  with  more  sok-nuiity,  and  conse(iiienlly 


752  KKFIX'TS    AN1>    tn^NSKQl-KNTKS    OF   TUK    UKLATION  (Part    3 

of  hiphor  (li.qiiity.  than  ordinary  simple  contracts."  l"^n<lcr  the  strict 
commercial  law  prevailint;-  in   some  jurisdictions,  a  noie  nmU-r  seal  \ 

and  payable  to  a  named  person  or  order  is  deemed  not  ne.m^tiable, 
but  in  this  state  it  is  treated  as  negotiable.  Farrar  v.  T.ank  of  New 
York,  90  Ga.  331.  17  S.  E.  87;  Porter  v.  McCollum,  15  Ga.  528. 
It  is  apparent  that  a  note  under  seal  occupies  a  different  position  in 
several  respects  from  one  which  is  not  so.  Hence  it  is  not  to  be 
treated  merely  as  a  simple  contract,  and  the  seal  rejected  as  sur- 
plusaije.  We  think  it  does  fall  within  the  rule  announced  in  Lenney 
V.  Finley,  supra.  From  what  has  been  said  it  follows  the  plaintiff 
could  not  have  recovered  against  the  defendant  on  the  note  given  by 
the  husband  of  the  lattfer.^® 

It  is  contended,  however,  that,  whether  the  plaintiff  can  recover  on 
the  note  or  not,  she  has  a  cause  of  action  against  the  defendant  aside 
from  the  note,  under  the  facts  alleged.  The  case  of  Farrar  v.  Lee, 
10  App.  Div.  130,  41  N.  Y.  Supp.  672,  was  very  similar  to  that  now 
under  consideration.  It  is  there  said :  "That  the  liability  rested  en- 
tirely upon  the  bond,  in  which  any  preliminary  contract  was  merged; 
that,  as  the  bond  was  signed  by  Tanner  [the  agent]  in  his  own  name, 
and  not  as  agent  for  Lee  [the  principal],  it  was  not  competent  to 
transfer  by  parol  evidence,  or  in  any  other  way,  from  Tanner  to  Lee, 
the  obligation  which  Tanner  had  assumed  personally."  In  the  case 
of  Lenney  v.  Finley,  supra,  it  was  contended  that,  if  the  concealed 
principal  was  not  liable  on  the  contract  of  lease  by  reason  of  its  being 
under  seal,  nevertheless,  having  occupied  the  premises  and  used  them 
for  the  purpose  of  conducting  business,  she  was  liable  to  the  plaintiff. 
This  contention  was  denied  by  the  court.  In  the  case  of  Maddox  v. 
Wilson,  91  Ga.  39,  16  S.  E.  213,  no  opinion  was  written.  The  third 
headnote  appears  to  conflict  with  the  ruling  here  made.  The  deci- 
sion was  made  by  two  justices,  and  not  by  a  full  bench,  and  was  dis- 
approved in  Lenney  v.  Finley,  supra. 

Under  the  allegations  of  the  petition  the  trial  court  committed  no 
error  in  sustaining  the  demurrerT'Judgrnent  affirmed.  All  the  Jus- 
tices concurring,  except  Simmons,  C.  J.,  absent. 

'•••  .Vcc.nl:  liriggs  v.  Partridge,  64  N.  Y.  357,  21  Am.  Rep.  617  (1876); 
Furoull  V.  Bittner,  09  Misc.  Rep.  112,  125  N.  Y.  Supp.  36  (1910). 

As  to  tiie  effe<t  of  statutes  dispensing  with  the  necessity  of  seals,  see  Jones 
V.  .Mr.rris,  61  Ala.  518  (ISTS).  and  Sanger  v.  Warren,  91  Tex.  472,  44  S.  W. 
477.  66  .\ni.  St.  Rep.  913  (lS9.Si.  holding  that  they  have  no  effect  upon  this 
rule,  and  Streeter  v.  Janu,  90  Minn.  :',95,  96  N.  W.  1128  (1903),  holding  that 
the  Minnesota  statute  has  aholished  all  differences  between  simple  contracts 
and  si>ecialities. 

Some  ca.ses  hold  that  though  an  action  does  not  lie  against  the  principal 
niK>n  a  bond  in  the  agent's  name,  yet  assumpsit  lies,  and  the  writing  may  be 
introduf-ed  as  evidence  of  the  terms  of  the  contract.  Violett  v.  Towell,  10  B, 
Mon.  347,  52  Am.  Dec.  548  (1850) ;    Moore  v.  Granby  Min.  Co..  80  Mo.  86  (1883). 


Ch.  5)  LIABILITY    OF   PRINCIPAL   TO    THIRD    PERSON  753 

(C)  Negotiable  Instruments 
WEBSTER  V.  WRAY. 

(Supreme  Court  of  Nebraska,  1886.    19  Neb.  558,  27  N.  W.  644.  56  Am.  Rep. 

754.) 

Action  against  E.  D,  Webster  on  four  contracts  made  by  his  son, 
Thomas  B.,  in  his  own  name,  in  connection  with  the  business  of  a 
cattle  ranch  owned  by  defendant,  but  run  in  the  name  of  his  son.     In 

-if^^ifCeBrS/P,  24  N.  W.  207,  the  judgment  for  plaintiff  was  affirmed. 

^t  now  comes  up  on  a  rehearing. 

Com;,  J.-"  *  *  *  Xhe  point  upon  which  the  rehearing  was  al- 
lowed,  and  upon  which  we  think  the  case  turns,  is  that  while  in  the 
case  of  contracts,  generally,  where  one  of  the  persons  executing  the 

"same  executes  it  in  his  own  name,  without  disclosing  any  one  as  hi 
principal  or  his  own  character  as  an  agent,  if  in  point  of  fact  he  was 
acting  as  the  agent  of  another  party,  such  other  party  will  be  held 
to  be  the  real  party  to  the  contract,  yet  that  this  rule  does  not  apply 
to  negotiable  promissory  notes.  This  question  was  ably  argued  at 
the  bar,  as  well  as  by  exhaustive  briefs  by  counsel  on  either  side.  An 
examination  of  the  authorities  cited  by  counsel,  with  others  referred 
to  therein,  led  us  all,  at  the  consultation,  to  the  conclusion  that  the 
above  proposition  as  to  both  its  branches  expresses  the  law  correctly. 
Being  about  to  enter  upon  a  collation  of  authorities  upon  this  point  of 
the  non-liability  of  an  unnamed  principal  upon  negotiable  paper,  my 
attention  was  attracted  to  a  citation  on  page  284,  1  Daniel,  Neg. 
Inst.,  to  an  article  in  13  Alb.  Law  J.  No.  19,  May  6,  1876,  p.  32^,. 
This  article  I  find  so  exhaustive  of  the  subject  that  I  will  content 
myself  by  giving  the  conclusions  of  the  writer,  and  the  autliorities  by 
him  cited.  Says  our  author:  ''But  as  to  bills  of  exchange  and  prom- 
issory notes,  it  has  been  long  settled  that  he  who  takes  negotiable 
paper  contracts  with  him  who,  on  its  face,  is  a  party  thereto,  and  with 
no  other  person.  By  Lords  Abinger  and  Parke,  Beckham  v.  Drake. 
9'  ATEe??-*:  W:"92,  96;  Byles,  Bills,  37;  v^tory,  Bills,  §  76;  Edw. 
Bills,  80."  Hence  evidence  is  not  admissible  to  charge  any  other  per- 
son thereori^upon'tBe  grounds  of  his  having  been  the  copartner  or 

"principal  of  the  party  named.  Mete.  Cont.  108;  Draper  v.  Massa- 
chusetts Steam-heating  Co.,  5  Allen,  340.     The   rule  is__^eneral,  if 

jTOt  universal,  that  neither  the  legal  liability  of  an  imnamed  princi]  .il 
to  be  sued,  nor  liis  legal  right  to  sue  oh  a  licgoliablc  iiislrumcnt,  rm 
be  shown  by  parol  evidence  (Fuller  v.  Hooper,  3  Gray,  334,  per  Mei- 
calf,  J.),  even  as  between  the  immediate  parties  to  the  transacli(jn, 
and  although  an  agency  is  disclosed  upon  the  face  of  the  instrument, 

«o  I'art   of   tlic   opiiiidii    Is   oiiiittod. 
Gor;D.rH.&  A.— 48 


754  EFFECTS    AND    CONSKQVKNtMCS    OK   TITK    HIOLATION  (Turf.    3 

wlicrc  the  word  "ai;ont"  or  soim'tliiiiL;-  i-(inivak'iit  is  added  to  the  sig-- 
nature  of  the  party  sigiiiti.q:  tho  instruinciit.     v'^ee  cases  below. 

The  rule  cxchuliivrc  all  parol  evidence  to  charge  an  unnamed  prin- 
cipal as  a  party  to  negotiable  paper  is  not  placed  upon  the  ground 
tliat  such  cviifence  would  contradict  or  alter  the  instrument;  but 
this  exception  to  the  general  rule  which  governs  other  parol  (or  un- 
sealed) agreements  is  derived  from  the  nature  of  negotiable  paper, 
which  being  made  for  the  purpose  of  being  transferred  from  hand  to 
hand,  and  "of  giving  to  every  successive  holder  as  strong  a  claim 
upon' the  maker  as  the  original  payee  had,  must  indicate  on  its  face 
who  the  maker  is ;  for  any  additional  liability  of  the  principal  not  ex- 
pressed in  the  form  of  such  a  note  or  bill  would  not  be  negotiable.-^ 
Barlow  v.  Congregational  Soc,  8  Allen,  460.  As  between  the  un- 
j  named  principal  and  a  subsequent  holder,  the  reason  for  the  rule  in 
/  question  seems  perfectly  clear  and  satisfactory;  but,  as  between  the 
immediate  parties  to  the  transaction,  does  the  reason  for  its  applica- 
tion exist?  For  example:  An  agent  purchases  goods;  discloses  the 
name  of  his  principal ;  and,  having  express  authority,  gives  the  ven- 
dor a  negotiable  promissory  note  for  the  price,  signing  it  with  his 
own  name  alone  without  any  addition,  or,  let  us  say,  with  the  addi- 
tion of  the  word  "agent,"  to  his  signature — in  such  a  case  it  is  held 
that  the  payee  cannot  recover  against  the  principal  upon  the  instru- 
ment, because  it  is  negotiable  and  his  name  is  not  disclosed  upon  it. 
But  what  material  difference  does  it  make  whether  the  instrument 
is  negotiable,  when  it  has  not  been  negotiated?  But  it  must  be  con- 
fessed that  the  weight  of  authority,  if  not  of  reason,  is  in  favor  of  the 
rule  excluding  all  parol  evidence,  even  as  between  the  immediate 
parties  to  the  transaction.  ItJs_lTeld_that  although  the  party  execut- 
ing the  instrument  describes  himself  as  "agent,"  yet,  if  the  name  of 
the  principal  is  not  disclosed  upon  the  face  of  it,  all  evidenci  (kliors 
the  instrument,  for  the  pi:rpose  of  holding  him  thereon,  is  to  be  ex- 
cluded. It  is  wholly  immaterial,  therefore,  that  the  agent  ha.d  full 
authority  to  make  it  in  behalf  of  his  principal;  that  the  consideration 
was  exclusively  received  for  his  benefit;  that  the  plaintiff  kiuw  the 
agent's  principal,  and  accepted  the  note  as  the  promise  of  the  prin- 
cipal.    Williams  v.  Robbins,  16  Gray,  77,  77  Am.  Dec.  3%;   Slawson 

21  A  negotiable  instrument  "is  a  'courier  witliout  baggage,'  whose  counte- 
nance Ls  its  passport,"  <iuoted  in  Ileaton  v.  Mvers,  4  Colo.  59  (1877),  and  in 
Sparks  v.  Dispatch  Transp.  Co.,  104  Mo.  531,  15  S.  W.  417,  12  L.  K.  A.  714, 
24  Am.  St.  Kep.  351  (1M)1),  in  which  is  an  illuminating  review  of  the  au- 
thorities. 

The  distinction  between  such  cases  and  cases  in  which  the  principal  adopt- 
ed the  agent's  name  as  his  business  soubriquet  is  discussed  in  Brown  v.  Par- 
ker, 7  Allen,  :>37  (1M>!).  A  recovery  on  tlu;  common  counts  of  a  dcl)t  evidenced 
bj*  a  bill  of  e.xchange  was  allowed  in  Tbmston  v.  Mauro,  1  G.  Greene  (Iowa) 
231  (1MM(.  and  in  Kenyon  v.  Williams.  19  Ind.  44  (1802),  it  was  held  there 
ndght  be  relief  in  efpiity.  See,  also,  Chem.  Nat.  Rank  v.  City  Bank,  15(;  111. 
149,  40  N.  K.  328  (\SU7))  (recovery  In  assumpsit);  Harper  v.  Tiffin  Nat.  Bank, 
54  Ohio  St  425.  44  X.  B.  97  (1890). 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  755 

V.  Loring,  5  Allen,  340,  81  Am.  Dec.  750.  See,  also,  Stackpole  v. 
Arnold,  11  Mass.  27,  6  Am.  Dec.  150;  Brown  v.  Parker,  7  Allen,  337  \ 
Bedford  Com.  Ins.  Co.  v.  Covell,  8  Mete.  442;  Bass  v.  O'Brien,  12 
Gray,  477;  Pentz  v.  Stanton,  10  Wend.  271,  25  Am.  Dec.  558; 
Thurston  v.  Mauro,  1  G.  Greene,  231 ;  Kenyon  v.  Williams,  19  Ind. 
45;  Anderton  v.  Shoup,  17  Ohio  St.  125;  faber  v.  Cannon,  8  Mete. 
456;  Eastern  R.  Co.  v.  Benedict,  5  Gray,  561,  66  Am.  Dec.  384; 
Bank  of  America  v.  Hooper,  5  Gray,  567,  66  Am.  Dec.  390;  De  Witt 
V.  Walton,  9  N.  Y.  571 ;  Tucker  Mfg.  Co.  v.  Fairbanks,  98  Mass.  101. 

No  fault  can  be  found  with  the  opinion  and  decision  of  the  court, 
so  far  as  the  second  and  fourth  causes  of  action  are  concerned ;  but 
in  regard  to  the  first  and  third  causes  of  action,  we  fail  to  distinguish 
between  simple  contracts  in  general  and  negotiable  paper. 

Upon  r£argiimen^and  reconsideration  of  the  authorities,  we  reach 

^  the  conclusion  that  the  district  court  erred  in  admitting  evidence. 

-*     *     *     Thg  judgment  of  the  district  court  is  therefore  reversed, 

and  the  cause  remanded  for  further  proceedings  in  accordance  with 

law. 


(D)  Election  to  Hold  Principal  or  Agent 
GREENBURG  v.  PALMIERI." 

(Suprerae  Court  of  New  Jersey,  1004.     71  X.  J.  Law,  S.l.  .">«  Atl.  207.) 

Van  Syckel,  J.  This  is  a  suit  instituted  in  the  Second  District 
court  of_Newark  against  the  wife  for  supplies  purcliased'byH'er  luis- 
band  for  horses  owned  by  her.  The  plaintiff,  before  this  suit  was 
brought,  sued  the  husband,  and  recovered  a  judgment  for  the  same 
claim.  After  judgment  against  the  husband,  the  plaintiff  learned  that 
the  husband,  in  making  the  purchases,  acted  as  the  agent  of  his  wife 
In  her  business,  and  then  this  suit  was  commenced.  From  the  judg- 
"ment  recovered  against  the  wife,  the  case  is  in  this  court  by  appeal. 

In  Elh'ott  V.  Bodine,  59  N.  J.  Law,  567,  36  Atl.  103S.  Judge  Xi.xon. 
in  delivering  the  opinitjn  of  the  court  of  last  resort,  savs  :  "Where 
credit  is  criven  to  an  agent,  the  fact  of  agency  being  unknown  at  the 
Itttie,  the  party  giving  credit  may  elect  which  he  will  hoUl  responsible, 
the  prlnciijal  or  the  agent;  and  that  a  luisband  may  act  as  the  agent 
of  his  wife." 

In  Yates  v.  Repetto,  65  N.  J.  Law,  294,  47  Atl.  632,  Ju.lge  Adams, 
in  expressing  the  views  of  the  Court  of  Errors  and  Appeals,  says : 
"The  authorities  arc  unifunu  in  ln:^il^^3^ni^^g  the  doetriiif  that,  when 
the  prinei]jal  is  unkiKjwn  U)  the  vemlo£_at.jhe  time  of  the  sale,  he 
may,  upon  discovering  the  principal,  resort  to  him,  or  U)  the  agent 
with  whom  he  dealt,  at  his  electiuu," 

To  make  an  election  binding,  the  party  electing  must  have  infor- 

22  .Vffonl:      n.-iyiiioiKJ    v.   Crown    Mills.   2   M«l- .    (Mush.)  .'510  (1.S41). 


'/ 


rr.r. 


rrnuTS  and  consequences  of  the  relation       (Part  3 


mation  of  ibc  tiamo  of  the  principal,,  in  addition  to  tlu'  f;ui   of  the 
^agoiicv,  for  in  the  absence  of  such  knowledge  there  could  noi  W  an 
"^election.     In  this  case  the  plaintifT  had  notice  neither  of  the  a-.ncy 
nor  of  the  name  of  the  principal. 

If  the  plaintiff  sues  alter  he  is  advised  of  the  agency,  it  is  an  elec- 
tion, from  which  he  cannot  recede;  but  where,  as  in  this  case,  he 
recovers  a  judgment  against  the  agent  when  he  is  in  ignorance  of 
the  existence  of  a  principal,  an  action  will  He  against  the  principal, 
unless  he  discharges  tnc  judgment  against  the  agent.  Story  on 
Agency.  §  2Q6;  Mechem  on  Agency,  §§  695-700;  Beymer  v.  Bon- 
sail.  79  Pa.  298. 

The  judgment  below  should  be  affirmed,  with  costs. 


TUTHILL  V.  WILSON. 

(Court  of  Appeals  of  New  York,  1882.    90  N.  Y.  42.'?.) 

Plaintiff  sold   Robin's  island   to   one   McNish,   as   agent   for  one 
Scott.     They  assigned  to  Home,  to  whom  plaintiff  conveyed  the_ 
property,  subject  to  certain  mortgages,  and  took  payment,  part  cash  ., 
and  part  by  bond  and  mortgage  back.     Home  conveyed  to  Mrs,.. 
Moffett.     The  bond  was  not  paid,  and  plaintiff  foreclosed  the  mort-,, 
gage  and  charged  a  deficiency  of  $4,660.62  against  Mrs.   Moffett. 
Execution  was  issued  and  returned  unsatisfied,  and  plaintiff  now  sues 
Wilson,  as  being  all  the  time  the  real  principal  and  purchaser  of^ 
Robin's  island. 

Finch,  J.-^  *  *  *  Besides  the  plaintiff  dealt  with  Home  and 
his  grantee,  Mrs.  Moffett,  as  real  principals,  and  actual  owners  and 
purchasers  of  the  island,  and  in  such  utter  disregard  and  repudiation 
~of  any  rights  of  Wilson,  after  notice  of  his  claim  to  be  owner,  as  to 
estop  him  now  from  treating  him  as  principal.  The  appellant's  idea 
seems  to  be  that  Wilson's  alleged  contract  of  purchase  somehow  sur- 
vived its  subsequent  fulfillment,  and  having  been  made  by  agents 
acting  for  an  undisclosed  principal,  the  seller  had  a  remedy  against 
both;  could  sue  the  agents  as  he  did,  and  failing  to  get  satisfaction 
have  a  remedy  against  the  discovered  principal.  We  do  not  see  how 
the  facts  of  the  case  admit  of  any  such  proposition ;  but  if  they  do, 
if  it  were  possible  ta  say  that  a  right  of  action  for  the  unpaid  pur- 
chase-money of  the  land  remained  to  Tuthill,  against  Home  and 
Mrs.  Moffett  as  agents  who  had  become  personally  liable,  and  also 
against  Wilson  as  the  undisclosed  principal,  a  fatal  difficulty  remains. 
The  vendor  could  not  enforce  his  claim  against  both  the  principal 
when  discovered  and  the  agents  who  contracted  in  his  behalf.  Grant- 
ing that  each  was  liable,  both  were  not,  for  both  could  not  be  at  one 
and  the  same  time,  since  the  contract  could  not  be  the  personal  con- 

23  Part  of  the  oiiinion  is  omitted. 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  757 

tract  of  the  agents,  and  yet_  not  their  contract  but  that  of  the  prin;;. 


~~cIpalr~The  vendor  had  a  choice  and  was  put  to  his  election.  Meeker 
^v.  'Claghorrr,  4^  N.  Y.  351;  Addison  v.  Gandassequi,  4  Taunt.  574; 
Curtis  V.  Williamson,  L.  R.,  10  Q.  B.  57.  The  rule  is  well  stated  in 
Leakeys  Digest,  503^,  that  "if,  after  discovery  of  the  principal,  the 
creditor  elect  to  hold  the  agent  liable,  and  act  accordingly  in  a  man- 
ner to  affect  the  principal,  he  will  be  precluded  from  afterward  charg- 
ing the  principal.  He  has  the  right  of  election  as  to  which  of  theni 
he  will  hold  responsible,  but  having'  once  made  an  election  he  is 
bound  by  it."  In  the  present  case  the  learned  trial  judge  found  as 
a  fact  that  in  July,  1873,  the  plaintiff  had  notice  that  Wilson  claimed 
to  be  the  real  owner  of  Robin's  island.  Yet  after  that,  he  took  from 
Mrs.  Moffett  a  further  mortgage ;  knowing  the  real  principal,  he  be- 
gan a  foreclosure  of  the  agents'  mortgage ;  he  asked  a  personal 
judgment  both  against  Home  and  Mrs.  Moffett;  he  omitted  to  make 
(he  principal  a  party;  he  released  Home  from  his  liability;  pursued 
Mrs.  ]\Ioffett  to  judgment  and  execution;  and  became  repossessed 
of  Robin's  island  by  virtue  of  his  judgment.  By  these  acts  he  made 
his  election  to  treat  the  agents  as  principals,  as  he  had  the  right  to 
do,  and  cannot  now  recall  his  choice.  It  was  said  in  Priestly  v.  Fer- 
nie,  3  H.  &  C.  982,  that  "where  the  agent,  having  made  a  contract 
in  his  ownjiarae,  has  b£en.  sued^on  it  to  judgment,  there  can  be  no 
''doubt  Jhat^  no  second  action  would  be  mainfaihable  against  the 
"cipal."  The  plaintiff  wholly  ignored  Wilson  in  pursuing  his  remedy, 
as  he  had  a  right  to  do.  He  treated  the  agents  as  principals,  and 
they  were  such  as  to  him  and  on  the  face  of  the  papers.  He  cannot 
now  have  a  remedy  against  Wilson.^*     We  are  unable  to  discover 

2  4  But  in  Gay  v.  Kelley,  109  Minn.  101,  123  N.  W.  295,  26  L.  R.  A.  (N.  S.) 
742  a909),_the  court  liolds  that  if  tlie  agency  is  disputed  tlie  third  rersou  may 
maintain  suit  against  both  i/rnicipal  and  agent  until  it  is  disdnsod  who  is  lia- 
^n — Lie,  Uiough  he  cannot  have  judgment  against  bu'.lj.  <  .iiii.i.  -(  c  I'urculi  v. 
liittner,  v,0  Misc.  Kep.  112,  125  X.  Y.  Supp.  30  [I'JIO):  Weil  v.  i:ayiiu)iul,  1  12 
Mass.  20*;.  7  X.  K.  S(iO  (ISSOj.  As  to  why  the  remedies  against  iirincipal  and 
agent  are  inconsistent,  see  Eufaula  Grocery  Co.  v.  Mo.  Nat.  Hank,  ILS  Ala. 
408,  24  South.  .389  (IKOS),  and  especially  the  leading  English  cases,  rrleslly 
V.  Fernle,  3  II.  &  C.  977,  11  Jur.  (N.  S.)  81.3,  34  L.  J.  E.xcli.  172,  13  L.  T.  Hep. 
(.\.  S.I  20S.  13  W.  I{.  10S9  (1.m;5),  and  Ki-ndall  v.  Hamilton.  4  App.  Cas.  501. 
48  L.  J.  C.  P.  705,  41  L.  T.  Rep.  (N.  S.)  418,  28  W.  R.  97  (1S79).  Vf.  Curl  is 
V.  Williamson,  L.  R.  10  Q.  B.  57,  44  L.  J.  Q.  B.  37,  31  L.  T.  Rep.  (N.  S.)  078. 
23  W.  U.  ^'M  (1874).  In  whlcji  tiling  an  allidavlt  of  i)roof  ag.iiiist  the  estate  of 
an  insolvent  dibtnr  was  lield  iiol  as  mallt-r  (»f  law  an  election.  The  eU'Ctlon 
must  be  made  within  a  reasonable  time.  Gay  v.  Kelley,  supra.  A  delay  of 
three  months  is  not  as  matter  of  law  unrea.sonahle  "in  the  absence  of  any 
altering  for  the  worse"  of  the  position  of  the  principal.  IJerry  v.  Chase.  179 
Fed.  42(;,  102  C.  C.  A.  572  (191(»i.  A  delay  of  nine  months  Is  too  long,  es- 
jteclally  If  the  position  of  tlie  prin(li)al  towards  his  agent  has  been  altered 
li.foiv.  f)i<.  .ifiidii  is  bioii-lit.  Siricthnrst  v.  Milrliell.  1  E.  &  E.  (;22.  5  .Fur. 
(N.  S.)  97S.  2S  li.  J.  Q.  B.  211.  7  W.  R.  220,  102  E.  C  L.  01.*2  t1S.^,0>.  A  reason- 
able time  to  Investigate  and  compare  the  standings  of  i)rln<ipal  and  ageni  Is 
always  iilloweil.  I'.iirrell  v.  .Ncwby.  127  Fed.  0.50,  Ol!  ('.  ('.  A.  .'{S2  (19(M).  and 
there  seems  to  be  no  reason  why  the  principal  sliould  coniplnin  In  any  <ase 
If  he  has  not  altered  his  position  with  the  agent.  Campbell  v.  IlicUs,  28  L.  J. 
E.\ch.  70  (1858). 


/ 


75S  F.rFF.rTS  and  C(>Nsi:Qn:N('i:s  of  'vwk  ki;i.aiion        (Part  3 

any  grouiul  upon  which  a  rcomory  for  ilio  (Ictk-icucy  on  Ihc  foreclo- 
sure can  be  sustaineil  ai;ains(  W  ilson,     *     *     * 
Judgment  for  defendant  atViriniHl. 


LINDQUTST  v.  DICKSON. 

(Suiiromo  Court  of  Miiiiu>sota,  llHHi.     98  Minn.  369,  107  N.  W.  07^8,  G  L.  R.  A. 
IN.  S.|  729,  8  Ann.  Cas.  1024.) 

St.\rt,  C.  J.-"  Action  to  recover  froni  the  defendant,  as  an  un- 
disclosed  principal,  for  labor  and  material  performed^  and  furnished^ 
by  the  plaintifT  in  decorating  and  repairing  her  house,  pursuant  to  an 
alleged  contract  made  for  her  by  her  husband,  Joseph  M.    l)iolxSiin. 

The  complaint  alleged,  in  effect,  that  at  the  time  tlic  contract  was 
entered  into  with  the  husband  he  was  in  fact  acting  as  a<'('nt  for  his 
wife,  the  defendant,  but  he  failed  to  disclose  to  the  plaintiff  the  fact 
of  such  agency,  or  the  fact  that  she  was  the  real  party  in  interest 
and  owned  the  house,  the  decorating  and  improvement  of  wliicli  Avas 
the  subject-matter  of  the  contract;  that  the  plaintiff  periornud  tlie 
contract  on  his  part:  that  he  was  not  paid  therefor;  and  that  he  com- 
menced an  action  against  the  husband  to  recover  the  balance  due 
him  on  the  contract,  and  on  August  29,  1904,  he  recovered  judg- 
ment against  him  for  the  sum  of  $273.68,  no  part  of  which  has  been 
paid ;  and  further  that  thereafter  (in  the  month  of  October,  1904)  the 
plaintiff  learned  for  the  first  time  that  the  defendant  was  the  real 
])arty  in  interest,  and  that  the  contract  was  made  for  her  by  her 
husband  as  her  agent.  This  action  was  commenced  in  the  month  of 
June,  1905.  The  defendant  by  her  answer  denied  that  she  ever  made 
the  contract  alleged  in  the  complaint,  and  alleged  as  a  defense  the 
recovery  of  a  judgment  by  the  plaintiff  against  her  husband,  Joseph. 
M.  Dickson.  The  trial  resulted  in  a  verdict  in  favor  of  the  plaintiff, 
f'T  the  amount  stated,  and  the  defendant  appealed  from  an  order^de-' 
nying  her  motion  for  a  new  trial. 

1.  The  first  group  of  alleged  errors  to  be  considered  is  to  the  ef- 
fect that  there  was  no  evidence  to  support  the  verdict,  because  there 
was  no  evidence  that  the  husband  of  the  defendant  was  her  agent  and 
acted  as  such  in  making  the  contract  in  question,  and  further  that 
there  was  no  evidence  that  the  plaintiff  relied  upon  such  supposed 
agency  in  making  the  contract,  but,  on  the  contrary,  that  he  dealt 
with  the  husband  as  principal.  It  is  not  controverted  that  the  plain- 
tiff, at  the  time  the  contract  was  made,  understood  that  the  house 
he  was  to  decorate  and  improve  belonged  to  the  husband,  and  that 
he  was  dealing  with  him  as  principal,  and  further  that  he  recovered 

**  Part  of  thr-  ftpiiiion  Is  omitted. 


Ch.  5)  LIABILITY    OF    PRINCirAL    TO    THIRD    TERSON  759 

judgment  against  the  alleged  agent  upon  the  same  claim   which   is 
the  basis  of  this  action,  in  ignorance  of  such  alleged  agency.     It  is  the 
contention  of  the  defendant  that  such  judgment  is  a  bar  to  this  actfon. 
Tlie  general  rule  is  that,  where  a  simple  contract,  by  parol  or  writ- 
ing,'~is'made  by  an  authorized  agent  without  disclosing  his  principal, 
— and  the  other  contracting  party  subsequently  discovers  the  real  party, 
'""lie  may  abandon  his  right  to  look  to  the  agent  personally  and  resort 
319  the  principal.    Lindeke  Land  Co.  v.  Levy,  76  INIinn.  364,  79  K".  W. 
314.    But  whether  the  creditor  can  proceed  against  the  undiscovered 
principal,  after  he  has  obtained  a  judgment  on  his  claim  against  the 
agent,  is  a  question  as  to  which  the  adjudged  cases  are  conflicting. 
In  the  case  of  Kingsley  v.  Davis,  104  Mass.  178,  the  creditor,  after 
being  fully  informed  that  the  party  with  whom  he  made  the  contract 
was  acting  for  an  undiscovered  principal,  brought  an  action  against 
the  agent   and   recovered  judgment  for   his   claim.     Afterwards   he 
brought  an  action  against  the  principal  to  recover  for  the  same  claim, 
and  the  court  held  that  the  action  against  the  principal  could  not  be 
maintained  for  the  reason  that :    "The  general  principle  is  undisputed     > 
that,  when  a  person  contracts  with  another  who  is  in  fact  an  dgent      \  /'^ 

of  an  undiscovered  principal,  he  may  upon  the  discovery  of  the  prin-       I  ^   . 

cipal  resort  to  him  or  to  the  agent  with  whom  he  dealt  at  his  elcc-      /  / 

tion.     But  if,  after  having  come  to  a  knowledge  of  all  the  facts,  he      j         ^ 
elects  to  hold  the  agent,  he  cannot  resort  to  the  principal."    In  Bey-      \ 
mer  v.  Bonsall,  79  Pa.  298,  it  was  held  that  nothing  short  of  satisfac-      \ 
tion  of  the  judgment  against  the  agent  would  discharge  the  principal.       I 
The  case  of  Kingsley  v.  Davis  suggests  the  true  basis  for  solving  the       / 
question.     It  is  a  question  of  election.     Election  implies  full  knowl-      1 
edge  of  the  facts  necessary  to  enable  a  party  to  make  an  intelligent     / 
and  deliberate  choice.     Pederson  v.  Christopherson,  97  Minn.  491,  106  / 
N.  W.  958. 

We   thcrefoxe   hold    upon    principle,   and   what    seems    to   be   the 
weight  of  judiciaTopnTion,  that:     If  a  person  contracts  witli  another. 
~wh6  Ts  m  fact  an  agenT"^f  an  undisclosed  principal,  and,  after  Icarii- 
^    ing  all  the  facts,  brings  an  action  on  the  contract  and  recovers  judg-  r^     ^ 

"'rnent  against  the  agent,  such  judgment  will  be  a  bar  to  an  action  V*-.^^^ 

""^gainst  the  principal.    But  an  unsatisfied  judgment  against  the  agent 
— is  not  a  l)ar  to  an  action  aganist  the  undiscovered  principal  when  dis- 
'    covered,  if  the  plaintiff  was  ignorant  of  the  fact  as  to  the  agency 
when  he  prosecuted  his  action  against  the  agent.     Kingsfcy  v.  Davis, 
104  Mass.  178;  Steel-Smith  Grocery  Co.  v.  Potthast,  109  Iowa.  413, 
80  X.  W.  517;  Coleman  v.  Bank,  53  N.  Y.  388;  Wharton  on  Agency, 
§  472;    1  Enc.  of  Law,  1139;   Mecheni  on  Agency,  §  699.^»     *     ♦     ♦ 
Judgment  affirmed. 

2fl  An  nrtioii  i>iirsuf(l  to  jiMlciiu'iit  aft«'r  KnowIcdKo  of  nil  llir-  f.uls  Is  In 
law  an  election.  KiiiKslc.v  v.  Davis,  KH  .Mmss.  ITS  (ISTdi;  Mmiiliy  v.  Ihil- 
chlnson.  Jt."',  Miss.  (M:5.  4S  S(Mitli.  ITS.  lil  L.  U.  A.  (N.  S.»  TN.">.  17  Ann.  Cms.  (JJ  1 
(1000).  rnntainlnK  a  dls'TlininatlnK  (llscusslon  of  fho  cases.     Rut  there  nnist 


y  ' 


r 


760  El-FHrrS   AND   CONSKQVLINCES   OF   TUE    UELATION  (Puit   3 

SFXTIQN  2.— FOR  TITF  TORT  OF  THE  AGENT 
K  IjIEW^  vrj^ICHOL-^^    i 

(Court  of  mn^  lUMic^^at  ^i  Prius,  170S.    T  Salk.  289.) 

In  an  action  on  the  case  for  a  deceit,  the  plaintiff  set  forth,  that  he 

bought  several  parcels  of  silk  for silk,  whereas  it  was  another, 

kind  of  silk;  and  that  the  defendant,  well  knowing  this  deceit,  sold  it  to 

him  for silk.    On  trial,  upon  not  guilty,  it  appeared  that  there 

was  no  actual  deceit  in  the  defendant  who  was  the  merchant,  but  that 
it  was  in  his  factor  beyond  sea.  And  the  doubt  was.  If  this  deceit  ^ 
could  charge  the  merchant?  And  Holt,  C.  J.,  was  of  opinion,  that 
the  merchant  was  answerable  for  the  deceit  of  his  factor,  though  not 
criminaliter,  yet  civiliter;  for  seeing  somebody  must  be  a  loser  by  this 
deceit,  it  is  more  reason  that  he  that  employs  and  puts  a  trust  and 
confidence  in  the  deceiver  should  be  a  loser,  than  a  stranger.  And 
upon  this  opinion  the  plaintiff  had  a  verdict. 

have  been  full  power  of  choosing  between  principal  and  agent.  Hoffman  v. 
Anderson,  llli  Ky.  S93.  07  S.  W.  49,  24  Ky.  Law  Rep.  44  (1902), 

It  is  not  necessary  that  the  judi^ment  shall  have  been  satisfied.  Barrell  v. 
Newby,  127  Fed.  656.  62  C.  C.  A.  382  (1904),  disapproving  on  this  point  Beymer 
V.  Bonsall,  79  Pa.  298  (1875). 

What  amounts  to  an  election  is  well  discussed  in  Berry  v.  Chase,  102  C. 
C.  A.  572.  179  Fed.  426  (1910),  in  which  it  is  said  by  Knappen,  J.:  "In  our 
opinion  the  evidence  was  not  sufficient  to  establish  an  election  by  Berry  & 
Co.  to  look  to  either  Chase  or  the  brokerage  firm,  to  the  exclusion  of  the  oth- 
er. On  the  one  hand,  althou2;h  the  instrument  of  assignment  in  lerms  con- 
veys an  account  against  Schloss,  jMiller  &  Malone,  any  inference  from  this 
fact  is  overcome  by  an  express  authorization  of  suit  against;  any  undisclosed 
principal.  On  the  other  hand,  the  testimony  as  to  Berry  &  Co.'s  treatment 
of  tlie  account,  following  the  conversation  by  telephone,  was  manifestly  no 
more  than  a  conclusion  of  the  witness,  and  incompetent  as  evidence.  While 
any  decisive  act  by  a  party,  after  knowledge  of  his  rights  and  of  the  facts, 
determines  his  election  in  the  case  of  inconsistent  remedies  (Robb  v.  Vos,  155 
tr.  S.  13,  15  Sup.  Ct.  4,  .39  L.  Ed.  52),  yet  an  act  to  have  the  eflect  of  election 
must  be  decisive.  The  mere  act  of  charging  the  agent,  after  knowledge  of  an 
originally  undisclosed  principal,  does  not,  as  matter  of  law,  amount  to  an 
election  to  look  f>nly  to  the  agent.  Jones  v.  Johnson,  86  Ky.  530,  6  S.  W.  582. 
It  has  been  held,  for  manifest  reasons,  that  the  bringing  of  suit  against  both 
the  agent  and  hLs  originally  undisclosed  principal  does  not  constitute  an  elec- 
tion to  hold  the  principal  and  discharge  the  agent.  Mattlage  v.  Toole,  15 
Ilun,  5.':iC.  Whether  or  not  the  mere  bringing  of  suit  against  the  agent,  with- 
out proceeding  to  judgment,  would  amount  to  an  election  to  look  to  the  agent 
(a  proiX)sitlon  upon  which  the  authorities  are  not  entirely  agreed),  there  was 
here  no  suit  against  the  agent,  nor  was  there  any  overt  act  in  our  opinion  in- 
consistent with  the  right  of  Berry  &  Co.  to  ultimately  look  to  Chase.  It  is 
urged  that  the  delay  in  electing  to  sue  Chase  was  unreasonable.  We  cannot 
say  this  is  so,  in  the  absem-e  of  any  altering  for  the  worse  of  Chase's  position 
towards  Schloss,  Miller  &  Malone,  or  of  any  circumstance  making  the  holding 
of  Chase  unjust  or  unreasonable." 


Ch.  5) 


LIABILITY   OP   PRINCIPAL   TO   THIRD    PERSON 


761 


BIRKETT  V.  POSTAL  TELEGRAPH  CABLE  CO. 

(Supreme  Court  of  New  York,  Appellate  Division,  Fourth  Depart int'iit.  1905. 
107  App.  Div.  115,  94  N.  Y.  Supp.  918,  affirmed  186  N.  Y.  591.  79  N.  E.  1101.) 

One  Harringtorij  agent  and  manager  of  defendant  company  at  Penn 
Yan,  had  systematically  overcharged  plaintiff  for  telegrams  and  ap- 

.^_2ropriated  the  excess  amounts  to  his  own  account  to  the  extent  of 
$2,480.24.  The  agent  confessed  and  absconded.  Birkett  now  sues  the 
company  to  recover  the  overcharges.  "*"  ^^^ 

"Spring,  J.    The  rule  of  law  governing  this  case  is  elementary.     A  >-^    Z' 
principal  is  liaSle'to  a  third  person  for  the  mTsconcIuct  of  his  agent^^  ,^  - 
committed  in  the  line  of  his  employment,  even  though  the  offeiige 

""war  in  excess  of  his  authority,  "and  the  principal  did  not  author i^^, 

^"lustify,  or  know  of  it."  ,Nowack  v.  Met.  St.  Rv.  Co.,  166  N.  Y.  433- 
440.  60  N.  E.  32,  54  L.  R.  A.  592,  82  Am.  St.  Rep.  691 ;  Jarvis  v. 
Manhattan  Beach  Co.,  148  N.  Y.  652-657,  43  N.  E.  68,  31  L.  R.  A. 
776,  51  Am.  St.  Rep.  727  et  seq. 

Conceding  this  rule  of  law,  the  appellant  contends  that  Harrington 
was  not  in  the  line  of  his  employment  in  making  false  entries  in  the 
accounts  rendered  to  the  plaintiff.  Harrington  had  general  superin- 
tendence of  the  defendant's  office  in  Penn  Yan.  He  had  the  ex- 
clusive handling  of  its  funds  at  that  village.  He  was  charged  with 
the  rendition  of  the  accounts  to  the  plaintiff,  and  with  collecting  for 
the  telegrams  and  cablegrams  sent  by  the  plaintiff  and  upon  which  .■ 
there  were  charges  for  transmission.  He  was  acting  within  the  scope  ^^ 
of  his  agency  in  receiving  the  money  for  the  benefit  of  the  defend- 
ant. If  the  plaintiff  had  paid  the  exact  amount  due,  and  Harrington 
had  misappropriated  it,  the  plaintiff  could  not  have  been  compelled 
to  respond  over  again  on  account  of  the  misconduct  of  Plarrington. 
Of  course,  Harrington  was  not  authorized  to  collect  money  of  the 
plaintifFljQr  telegrams  never  transmitted  ;  but  it  was  his  duty  to  collect 

^  the  sums_actually  due  for  their  transmission.  If  he  collected  more 
than  was  due,  he  did  that  because  of  his  agency.     The  agent,  in  his 

"dealings  with  the  plaintiff,  turned  out  to  be  dishonest  while  acting  in 
th'at  capacity.  His  delinquency  does  not  exonerate  the  defendant  to 
the  plaintiff,  who  relied  upon  the  manifest  .authority  of  Harrington. 
The  principal  cannot  so  easily  evade  liability  for  the  misdeeds  of  its 
agent.  The  general  line  of  employment  is  fixed  by  the  agency,  ami 
in  whatevei-~an  "agent  does  to  an  iimocent  third  person  within  thai 
general  line,  although  ultra  vires,  he  represents  his  principal.''     Ji 


lA 


27  The  rule  applies  even  though  the  principal  forbade  the  acts,  or  disapprov- 
ed of  them,  provided  they  wore  within  the  conrsp  of  his  cinitloyiiKMit.  I'lilln- 
dflphla  &  Ji.  K.  Co.  V.  I)*frl>y,  14  How.  ICS.  14  L.  Kd.  .'.()'-'  (is.-,ji;  KIimiiiImtu 
V.  Aviiiarlus,  1.".;".  Iowa,  17<i.  ll'J  N.  W.  r.4,s  (r.)07);  Dupre  v.  Clillds,  nj  Apji. 
DIv.  :',Ofi.  r.5  N.  Y.  Supp.  170  (lOdOi.  It  ap|illes  In  case  of  trcsjiass  by  the 
auent,  Molr  v.  Iloj.klns.  1(!  111.  ;;i.'{.  0.3  Am.  Der.  .'{12  {^XT^Z^^,  to  his  frauds. 
Chutwood  V.  r.i'rrhin,  .'',9  N.  J.  K'l.  -0.'5  (issj);    p.nrwkk  v.  Knglisli  Joint  Slock 


/ 


7iV2  i;iii:rrs  AND  roxsrQTT:N(M-s  or  the  kki-ation        (Part  3 

a  comluctor  uses  uiuluc  vii^lctico  in  ronioviiif;-  a  passenger  frcmi  a 
train,  the  r-iilrnad  company  is  lial)le.  The  company  docs  not  author- 
ize the  comhictor  to  handle  the  passenger  harshly ;  but  it  docs  cm- 
power  him  in  certain  cases  to  eject  the  passenger,  and  it  luust  be  held 
civilly  responsible  for  whatever  the  conductor  docs  in  carrying  out 
the  authiirity  intrusted  to  him.  even  though  he  oversteps  his  instruc- 
tions. The  rule  here  api>licable  is  founded  on  the  old  maxim  that  the 
princijial  is  responsible  for  his  agent,  not  the  innocent  third  person. 

The  plaintiff  was  furnished  with  the  tariff  books  of  the  defendant, 
ami  by  examination  of  each  statement  with  the  tariff  rates  could  have 
ascertained  that  he  was  being  cheated.  It  is  urged  that  he  was  negli- 
gent in  failing  to  make  these  examinations,  and  should  not,  therefore, 
be  permitted  to  recover.  The  plaintiff  was  not  obliged  to  act  on  the 
assumption  that  Harrington  was  defrauding  him.  The  defendant  had 
placed  its  agent  in  the  responsible  position  of  manager  of  its  busi- 
ness. It  vouched  for  his  integrity  to  its  patrons.  They  had  a  right 
to  assume  he  was  honest,  and  were  not  called  upon  to  enter  into 
any  inspection  of  the  items  of  his  accounts,  for  the  purpose  of  dis- 
~cbvering  either  fraud  or  mistake.  The  judgment  should  be  affirmed, 
\v^"th  costs. 

Judgment  affirmed,  with  costs.     All  concur. 

Bauk,  L.  R.  2  Exch.  259.  36  L.  J.  Exch.  147,  16  L.  T.  Rep.  N.  S.  161,  15  W.  R. 
S77  (1S67),  to  conversion  of  the  property  of  the  third  person,  Rhoiiiberg  v. 
Avenurius,  supra,  to  a  libel  against  the  third  person,  Citizens'  Life  Assur. 
Co.  V.  Brown,  A.  C.  423,  73  L.  J.  P.  C.  102,  90  L.  T.  Rep.  (N.  S.)  739,  20  T  L. 
'  R.  497.  53  W.  R.  176  (1904).  As  to  liability  of  the  principal  for  slanders 
littered  by  the  agent,  see  Singer  Mfg.  Co.  v.  Taylor,  150  Ala.  574,  43  South. 
210,  9  L.  R.  A.  (N.  S.)  929,  124  Am.  St.  Rep.  90  (1906),  as  to  his  neglect,  de- 
e«'it,  or  other  wrongful  act.  Locke  v.  Stearns.  1  Mete.  (Mass.)  560,  35  Am.  Dec. 
.'{S2  (1840).  per  Shaw,  C.  J.,  limiting  it  however  to  the  civil,  and  not  the  crim- 
inal liability  of  the  principal,  as  do  the  cases  generally.  See  Higgins  v.  Wa- 
tervliet  Turnpike  Co.,  40  N.  Y.  23,  7  Am.  Rep.  293  (1S71) ;  Bank  of  I'alo  Alto 
V.  Par.  Postal  Tel.  Cable  Co.  (C.  C.)  103  Fed.  841  (1900),  and  even  to  crimes 
in  whieh  intent  is  not  an  ingredient,  such  as  illegal  sale  of  liquors.  George 
v.  Gobey.  128  Mass.  289,  35  Am.  Rep.  376  (ISSO).  Where,  however,  the  princi- 
pal dtjes  not  participate  in  the  tort,  he  is  not  liable  in  punitive  damages.  INLii- 
senbacker  v.  Soc.  Concordia,  71  Conn.  309,  42  Atl.  67,  71  Am.  St.  Rep.  213 
(1899». 

Modern  cases  extend  the  rule  to  willful  and  malicious  acts  of  the  agent. 
Cf.  Johnson  v.  Barber.  10  111.  425,  50  Am.  Dec.  416  (1849)  (as  to  malice),  and 
Pre.ssley  v.  Mobile  &  G.  R.  Co.  (C.  C.)  15  Fed.  199,  4  Woods,  569  (1882).  For 
an  interesting  account  of  the  historical  develoi)ment  of  the  tort  liability  of 
the  princii)al  for  the  acts  of  the  agent,  and  of  the  principle  upon  which  it 
rests,  see  Kingan  &  Co.  v.  Silvers,  13  Ind.  App.  SO,  37  N.  E.  413  (1894). 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  7G3 


MACKAY  V.  COMMERCIAL  BANK  OF  NEW  BRUNSWICK. 

(I'rivy  Couucil  Appeals,  1874.     L.  R.  5  P.  C.  394,  43  L.  J.  P.  C.  31,  30  L.  T. 
Rep.   [N.   S.]  ISO,  22   W.   R.  473.) 

Lingley,  a  timber  merchant  of  New  Brunswick,  was  accustomed  to 
consign  cargoes  to  Messrs.  Mackay  of  Liverpool,  drawing  bills  on 
them  which  he  indorsed  to  defendant  bank.  In  August,  1888,  he 
drew  several  bills,  two  of  which,  by  his  fraud,  were  not  drawn  on 
any  cargoes.  On  receiving  his  letter  of  notification,  plaintiffs  cabled 
him  to  remit  defendant's  guarantee  of  the  bills,  or  they  would  refuse 
all.  When  the  message  arrived,  Lingley  had  made  over  all  his  prop- 
erty to  trustees  and  absconded.  The  message  was  taken  to  Sancton, 
cashier  and  manager  of  the  defendant,  who  cabled  back,  "Sent  last 
mail. — Lingley."  The  -\Iackays  being  thus  deceived,  paid  the  bills, 
and  now  bring  deceit  against  the  bank.  Verdict  directed  for  plaintiff, 
new  trial  granted  by  the  Supreme  Court  of  New  Brunswick,  from 
which  this  appeal  is  taken. 

Sir  Montague  E.  Smith  -^  delivered  the  judgments  of  their  Lord- 
ships :     *     *     *     The  Cou^rt  appear__to_treat_th£  question  whether 


V, 


or  not  Sancton  was  acting  within  the  scope  of  his  authority  (there 

being  no  jonfUcting  evidence  as  to  the  general  nature  of  his  author- 
ity) as  a  question  of  law,  and  hold  that  Mr.  Justice  Weldon,  instead 
/^f ~?tifectihg  the  jury  that  the  sending  of  the  telegram  was  within 
_  the-scope  of  Sancton's  authority,  ought  to  have  directed  them  that  it 
was  not.  The  only  question  of  fact  which  they  direct  to  be  submit-  > 
ted  to  the  jury  is,  whether  or  not  the  sending  it  was  sanctioned  by 
the  directors. 

Their,  Lordships  resiard-it  as  settled  ja^v^tha^  a  pjjncjpql.is.  ans\\Leii-  /^ 
able  where  he  has  received  a  benefit  from  the  fraud  of  his  agent^  act- 
/^ingf"Within  the  scope  of  his  authority.  This  doctrine  has  been  laici 
down  by  LorcTTToTrin  Hern  v.  Nichols,  1  Salk.  289,  supra,  p.  760;  by 
Lord  Ellenborough  in  Alexander  v.  Gibson,  2  Camp,  'h'^'^  ;  by  Parke. 
B.,  in  Cornfoot  v.  Fowke,  6  M.  &  W.  373,  alth<nigh,  under  the  pe- 
culiar circumstance  of  that  case,  he  held  the  defendant  not  liable ; 
also  by  Parke,  B.,  in  Mocns  v.  Heyworth,  10  M.  &  W. ;  by  Tindal,  C. 
J.,  delivering  the  judgment  of  the  Iv\chec|uer  Chamber  in  Wilson  v. 
Fuller,  3  Q.  B.  17  \  and  again  by  the  Court  of  lCxclK'(|uer  in  lldoll 
V.  Atherton,  7  H.  &  N.  172,  30  L.  J.  Ex.  317,  where,  it  is  true,  the 
Court  was  dividcrl  in  its  judgment,  but  where  Baron  Martin,  who 
held  that  the  plaintiff  had  not  proved  his  case,  stated  the  (|uestion 
to  be,  "Was  the  agent's  situation  such  as  to  bring  the  representation 
he  made  within  the  scope  of  his  authority?" 

There  are,  however,  some  cases  to  be  found  apparently  at  variance 
as  to  the  interpretation  and  the  adaptation  to  circumstances  of  this 

2"  Pnrt  of  fho  ofiinloii  's  nniilti'd. 


TtU  r.FKKCTS  AND  coNSK(.u-KNt'r.s  OK   Till:  iM'.i.ATioN        (Tart  ;> 

doctrine.  It  is  scUlom  possible  to  prove  that  the  fraudulent  act 
complained  of  was  committed  by  the  express  aulliority  of  the  prin- 
cipal, or  that  he  gave  his  agent  general  authority  to  commit  wrongs 
or  frauds.  Indeed  it  may  be  generally  assumed  that,  in  mercantile 
transactions,  principals  do  not  authorize  their  agents  to  act  wrong- 
fully, ami  consequently  that  frauds  are  beyond  "the  scope  of  the 
agent's  authority"  in  the  narrowest  sense  of  which  the  expression 
admits.  But  so  narrow  a  sense  would  have  the  effect  of  enabling 
jirincipals  largely  to  avail  themselves  of  the  frauds  of  their  agents, 
without  suffering  losses  or  incurring  liabilities  on  account  of  them, 
and  would  be  opposed  as  much  to  justice  as  to  authority.  A  wider 
construction  has  been  put  upon  the  words.  Principals  have  been  held 
liable  for  frauds  when  it  has  not  been  proved  that  they  authorized 
the  particular  fraud  complained  of  or  gave  a  general  authority  to 
commit  frauds ;  at  the  same  time,  it  is  not  easy  to  define  with  preci- 
sion the  extent  to  which  this  liability  has  been  carried.  The  best 
definition  of  it,  in  their  Lordships'  judgment,  is  to  be  found  in  the 
case  of  Barwick  v.  English  Joint  Stock  Bank,  L.  R.  2  Ex.  259,  when 
the  judgment  of  the  Exchequer  Chamber  was  delivered  by  one  of  the 
most  learned  Judges  who  ever  sat  in  Westminster  Hall.  In  that  case 
the  plaintiff  was  induced  to  continue  to  supply  oats  to  a  customer  of 
the  bank,  a  contractor  with  the  Government,  on  a  guarantee  from  its 
manager  to  the  effect  that  the  customer's  cheque  in  the  plaintiff's 
favour,  in  payment  for  the  oats  supplied,  should  be  paid  on  receipt 
of  the  Government  money,  in  priority  to  any  other  payment  "except 
to  this  bank."  The  manager  fraudulently  concealed  from  the  plain- 
tiff that  the  customer  was  indebted  to  the  bank  in  £12,000. :  the  re- 
sult was  that  the  plaintiff  was  induced  to  advance  money  to  the  cus- 
tomer on  a  guarantee  which  turned  out  to  be  worthless,  and  which 
the  manager  must  have  known  to  have  been  worthless  when  he  gave 
it.  The  declaration  contained,  among  other  counts,  one  for  deceit, 
in  which  the  fraud  of  the  manager  was  laid  as  the  fraud  of  the  bank, 
on  which  count  alone  the  judgment  is  based.  Baron  Martin  having 
directed  a  nonsuit,  a  venire  de  ;iovo  was  ordered  by  the  Exchequer 
Chamber,  whose  judgment  was' delivered  by  Mr.  Justice  Willes.  He 
expressed  himself  as  follows  :—r"With  respect  to  the  question  wheth- 
er a  principal  is  answerable  foi  the  act  of  his  agent  in  the  course  of 
his  master's  business,  and  for  his  master's  benefit,  no  sensible  distinc- 
tion can  be*/lrawn  between  the  case  of  fraud  and  the  case  of  any 
other  wrong.i  The  general  rule  is,  that  the  master  is  answerable  for 


every  such  wrong  of  the  servant  or  agent  as  is  committed  in  the 
course  of  thg  service  and  for  the  master's  benefit,  though  no  express 
command  or  privity  of  the  master  be  proved.  The  principle  is  acted 
up6n~evefy  dayln  running-down  cases.  ItTias  been  applied  also  to 
direct  trespass  to  goods."  After  enumerating  other  instances  of  its 
application,  he  proceeds: — "In  all  these  cases  it  may  be  said,  as  it 


Ch.  5)  LIABILITY    OF    PRINCIPAL   TO    THIRD    PERSON  765 

was  said  here,  that  the  master  had  not  authorized  the  act.  It  is  true 
he  has  not  authorized  the  particular  act,  but  he  has  put  the  agent 
in  his  place  to  do  that  class  of  acts,  and  he  must  be  answerable  for 
the  manner  in  which  that  agent  has  conducted  himself  in  doing  the 
business  which  it  was  the  act  of  his  master  to  place  him  in."  ^^ 
*  *  *  For  these  reasons  their  Lordships  will  humbly  recommend 
Her  Majesty  that  the  judgment  of  the  Supreme  Court  be  reversed, 
and  the  order  directing  a  new  trial  be  discharged. 


McCORD  V.  WESTERN  UNION  TELEGRAPH  CO. 

(Supreme  Court  of  Minnesota,  1888.     39  Minn.  181,  39  N.  W.  315,  1  L.  R.  A. 
143,   12   Am.    St.    Rep.    636.) 

Vanderburgh,  J.^*'     Dudley  &  Co.,  who  resided  at  Grove  City, 
Minn.,  were  the  agents  of  plaintiff  for  the  purchase  of  wheat  for  him. 

'  He  resided  af^rinneapolis,  and  was  in  the  habit  of  forwarding  money 

to  th'ein;  to  be  used  in  making  such  purchases,  in  response  to  telegrams 

^"seffTOveT  the  defendant's  line,  and  delivered  to  him  by  it.    On  theTit 

3^^r  February,   1887,  the  defendant  transmitted  and  delivered  to_ 
"[plaintiff  the  following  message,  viz. :   "Grove  City,  Minn.,  February  1,^ 
liRSTT'To  T.  M.  McCord  &  Co.:    Send  one  thousand  or  fifteen  hun-^ 
dred  to-morrow.    Dudley  &  Co." 

'riTej)iaintrfr"m  gocxi  iaith  acted  upon  this  request,  believing  it  to_ 
begenuine,  and,  "in  accordance  with  his  custom,  forwarded  tiirough 

"~THeAmerican  Express  Company  the  sum  of  $1,500  in  currency,  prop- 

'~'erlyTcfdressed  to  Dudley  &  Co.,  at  Grove  City.    It  turned  out,  however. 

^Ifiat  this  dispatch  was  not  sent  by  Dudley  &  Co.,  or  with  their  knowl- 
edge or  authority ;  but  it  was  in  fact  false  and  fraudulent,  and  was 
written  and  sent  by  the  agent  of  the  defendant  at  Grove  City,  whose 

"business  it  was  to  receive  and  transmit  messages  at  that  place.     Ik- 
was  also  at  the  same  time  the  agent  of  the  American  Expir 
^^awy-tCFlhe  transaction  of  Its  business,  and  for  a  long  time  piiMuu^ 
to  the  date  mentioned  had  so  acted  as  agent   for  both  companies  nl 

~~Grove  City,  and  was  well  informed  of  plaintilT's  method  of  doing  busi- 

*liess  with  Dudley  &  Co.  On  the  arrival  of  the  pack.i-c  l.v  cxpros 
at  Grove  City,  containing  the  sum  named,  it  was  im  .nid  al) 

2K  WlK'tluT  the  tort  was  for  the  prlnHpnl's  bonolit  Is  often  the  lest.^  Biii- 
wi.k  V.  Knr  Joint  Stock  I'.nnk.  L.  R.  2  Kx.-h.  IT.!).  3rt  L.  J.  Kx<h.  147  K.  h  1. 
Hf'P  N  S  161  ir,  W.  R.  S77  (1867),  a  l.-:iilink'  case;  (Jarn-t/rM  v.  DucikKH. 
no  Mo.' 104.  11  Am.  Hep.  40.",  (I.s71i».  The  lial.ilil.v  i.s  especially  «lenr  if  H.e 
prin.ipal  enjoys  fli.-  fnilts  of  tin-  a^-.-nts  wmun.  Wright  v.  <  a  li.mn.  15>  1«'^- 
41-  (lN.-,7).  V)V  if  the  auent  was  actln;;  to  i.rot.'ct  til.-  principal  spmpertv  or 
rlKhts.  I-alnu-ri  v.  Manhattan  Ky.  (X.  VXi  N.  Y.  Ii61.  30  N  K.  1001.  H'  '  . - 
A.  1.".6.  28  Am.  St.  R.-p.  ^2  (ls'.»-).  The  agent  nnist  be  actlnw  fur  his  pr  n 
rlpal  and  not  for  l.iM..self.  I'.rit.  Mut.  RanklnK  Co.  v  Charmwood  /'orj-st  It^- 
Co..  18  Q.  R.  1».  7'J»,  r,2  J.  I'.  150.  .".(J  h.  J.  Q.  R.  419.  57  L.  T.  Hep.  (N.  S.)  S.U. 
b5  "w.  R.  590  (1887). 

■■■■'<  Tart  of  the  opinion  is  omitted. 


TtU;  KKFICCTS    AND    CONSlXjrKNCES    OF   TIIIO    HIOI.ATION  (I^irt    3 

stracted  by  the  aijont,  wlio  coincrtod  the  same  to  his  own  use.     The 

~7ttspaTeir~was~ncHvered  to  the  i>lainti(T,  ami  the  money  forwarded  in 

'^ihe  usual  course  of  husiness.     These  facts,  as  chscloscd  by  the  record, 

jiDLJiJjilieieiit,  we  think,  to  cstabHsh  the,  dclendant's  liabihtv  in  this 

1.  Considering  the  business  relations  existing  between  plaintiff  and 
Dudley  &  Co.,  the  dispatch  was  reasonably  interpreted  to  mean  a  req- 
uisition for  one  thousand  or  fifteen  hundred  dollars. 

2.  As  respects  the  receiver  of  the  message,  it  is  entirely  immaterial 
upon  what  terms  or  consideration  the  telegraph  company  undertook 
to  send  the  message.  It  is  enough  that  the  message  was  sent  over 
the  line,  and  received  in  due  course  by  plaintiff,  and  acted  on  by  him 
in  good  faith.  The  action  is  one  sounding  in  tort,  and  based  upon 
the  eiajm  that  tiie  defendant  is  liable  for  the  fraud  and  misfeasance 

__ofTts  agent  in  transmitting  a  false  message  prepared  by  himself.    Tel- 
egraph Co.  V.  Dryburg,  35  Pa.  298,  78  Am.  Dec.  338;  Gray,  Tel.  §  75. 

3.  The  principal  contention  of  defendant  is,  however,  that  the  cor- 
poration is  not  liable  for  the  fraudulent  and  tortious  act  of  the  agent 
in  sending  the  message,  and  that  the  maxim  respondeat  superior  does 
not  apply  in  such  a  case,  because  the  agent  in  sending  the  dispatch 
was  not  acting  for  his  master,  but  for  himself,  and  about  his  own. 
business,  and  was  in  fact  the  sender,  and  to  be  treated  as  having  tran_-_. 

^  scended  his  authority,  and  as  acting  outside  of  and  not  in  the  course 

^  of  his  employment,  nor  in  furtherance  of  his  master's  business.     P.irT 

^e  rule  which  fastens  a  Hability  upon  the  master  to  third  pci   '.us 

Tor  the  wrongful  and  unauthorized  acts  of  his  servant  is  not  conrmcd 

solely  to  that  class  of  cases  where  the  acts  complained  of  are  done 

'"  ^^^?-?°yri.'t -^".^  the  employment  in  furtherance  of  the  master's  liusi- 

•         '-■'-  interest,  though  there  are  many  cases  which  fall  within  that 

lott  v.Tce  Co.,  7Z  N.  Y.  547;    Savings  Inst.  v.  Bank,  80"N. 

Y.  \(j6.,  36  Am.  Rep.  595;    Potulni  v.  Saunders,  Z7  Minn.  517,  35  N. 

W.  Rep.  379. 

Where  the  business  with   which  the  agent  is  intrusted  involves  a 
duty  owedj))^  the  master  to  the  public  or  third  persons,  jf.the  agent^^ 
while  -SO.  ^employed,  by  his  own  wrongful  act  occasions  a  violation  ' 
of  that  duty,  or  an  injury  to  the  person  interested  in  its  faithful  per- 
formance by  or  on  behalf  of  the  master,  the  master  is  liable  forjlie 
■  f  it,  whether  it  be  founded  in  contract  or  be  a  common-law 
■^';,^  >;'owinF  nnt  of  the  relations  of  the  parties.     1  Shear.  &  R.  Neg 
-T4tli  Ed.)  §§  149,  150,  154;    Tayl.  Corp.  (2d  Ed.)  §   145.     And  if  is 
immaterial  in  such  case  that  the  wrongful  art  of  the  -er\  ant  i^  in  itself 
l.iTTful,   malicjous,   or   fraudulent.      Thus   a   carrier   of   passengers  Is 
bound  to  exerclse"due  regard  for  their  safety  and  welfare,  and   to 
protect  them  from  insult.     If  the  servants  employed  by  such  carrier 
in  the  course   of   such   employment  disregard  these  obligations,   and 
maliciously  and  willfully,  and  even   in   disregard  of  the  express  in- 
itructions  of  their  employers,  insult  and  maltreat  passengers,  under 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  767 

their  care,  the  master  is  liable.  Stewart  v.  Railroad  Co.,  90  N.  Y. 
593,  43  Am.  Rep.  185.  In  Booth  v.  Bank,  50  N.  Y.  400,  an  officer 
of  a  bank  wrongfully  discharged  a  judgment  which  had  been  recov- 
ered by  the  bank,  after  it  had  been  assigned  to  the  plaintiff.  It  was 
there  claimed  that  the  authority  of  the  officer  and  the  bank  itself  to 
satisfy  the  judgment  had  ceased,  and  that  hence  the  bank  was  not 
bound  by  what  its  president  did  after  such  assignment.  But  the  court 
held  otherwise,  evidently  upon  the  same  general  principle,  as  respects 
the  duty  of  the  bank  to  the  assignee,  and  laid  down  the  general  prop- 
osition equally  applicable  to  the  agent  of  the  defendant  in  the  case  at 
bar,  that  the  particular  act  of  the  agent  or  officer  was  wrongful  and 
in  violation  of  his  duty,  yet  it  was  within  the  general  scope  of  his 
"^  -iMWcTs,  and  as  to  innocent  third  parties  dealing  with  the  bank,  who 
"^  bad  sustained  damages  occasioned  by  such  act,  the  corporation  was 
"^  responsible. 

*"'  ,^nd  the  liability  of  the  corporation  in  such  cases  is  not  atlected 
by  the  fact  that  the  particular  act  which  the  agent  has  assumed  to 
ao  is  one  which  the  corporation  itself  could  not  rightfully  or  lawfully 
~  (\n~  In  Bank  v.  Bank,  16  N.  Y.  125,  133,  69  Am.  Dec.  678,  a  case 
frequently  cited  wath  approval,  the  teller  of  a  bank  was  with  its  con- 
sent in  the  habit  of  certifying  checks  for  customers,  but  he  had  no 
authority  to  certify,  in  the  absence  of  funds,  which  would  be  a  false 
representation,  yet  it  was  held,  where  he  had  duly  certified  a  check 
though  the  drawer  had  no  funds,  that  the  bank  was  liable  on  the 
ground  that,  as  between  the  bank  which  had  employed  the  teller,  and 
held  him  out  as  authorized  to  certify  checks,  (which  involved  a  rep- 
resentation by  one  whose  duty  it  was  to  ascertain  and  know  the  facts,) 
and  an  innocent  purchaser  of  the  check  so  certified,  the  bank  ought 
to  be  the  loser.  Gould  v.  Sterling,  23  N.  Y.  463 ;  Bank  v.  Bank,  29 
N.  Y.  632.  See,  also,  Titus  v.  Turnpike  Co..  61  N.  Y.  237;  Railroad 
Co.  V.  Schuyler,  34  N.  Y.  30,  64;    Lane  v.  Cotton,  12  Mod.  490. 

The  defendant,  selected  its  agent,  placed  him  in  charge  of  its  busi- 
ness at  the  station  in  question,  and  authorized^ him  to  send  lu- 

■'-  line.     Persons  receiving  dispatches  in  the  usual  course  ui  Ijum 
.hen  there  is  nothing  to  excite  suspicion,  are  entitled  to  rely 
upon  the  presumption   that  the  agents   intrusted   with   the   perform- 
ance of  the  business  of  the  company  have  faithfully  and  honestly  dis- 
charged  the  duty  owed  by  it  to  its  patrons,,  anjjjjiiit, they  would  nd 
knowingly  scnrl  a  false  or  forged  message,  and  it  would  ordinarily  b^ 
an  unreasonable,,  a^id  impracticable  rule  to  rcijuirc  the  receiver  of  a 
"    cHspatch  to  investigate  the  question  of  the  intcgrily  and  fidelity  of  the 
flefendant's  agents  in  the  performance  of  their  duties  1..  f,,i.'  -uiin.. 
Whether  the  agent  is  unfaithful  to  his  trust,  or  viol.i; 
or  disobeys  the  instructions  of,  the  company,  its  palruUi  uiuy   iia\  c 
no  means  of  knowing.     If  the  corporation  fails  iu  the  performance 
of  its  duty  through  the  neglect  or  fraud  oiUlC.  f',fc^"t^  whom   il  li.ix 
delegated  to  i'<rt"o!m  it,  the  master  i^  ''"--I'ViL^ible.    It  was  the  business 


irrJ^ 


iP\ 


7(iS        EFFECTS  AND  CONSKQUENCES  OF  THE  UELATION    (Part  3 
I 

of  the  agcuLlo.seildjsJispatchos  of  a  similar  character,  and  such  acts 
\vcre"\vithiu  the  scoiiu_af  his  cniploymcut,  and  the  "plaintitf  coiilcT  not 
Tcnow  the  circumstances  that  made  the  particular  act  wronti^ful  and— • 
jKiauthorlzed."  ^"sTo  him,  therefore,  it  must  be  deemed  the  net-  rji|; , 
the  corporaiiflja.__Bank  v.  Telegraph  Co.,  52  Cal.  280;   Booth  v.  Bank, 
"sITpra.'^     ♦     *     ♦' 


MIDDLETON  v.  FOWLER. 

(Court  of  King's  Beucli  at  Nisi  Prius,  KiOS.     l  Salk.  282.) 

An  action  ui^  .n  the  case  upon  th,e.jCustom  ol  the  realm  was  brought. 
against  tiie  defendants  l^eing  masters  of  a  stage-coach;  and  the  olain- 
titt  set  forth,  that  he  took  a  place  in  the  coach  for  such  a  town,  ^n/l 
that  in  the  journey  the  defendants  by  their  negligence  lost  a  trunks, 

_pT  the  plaintiff's.     Upon  not   qtiilty  pleaded,  upon  the   evidence   it 
appeared,  that  this  triTnk  was  delivered  to  the  person  tliat  drove  the  ^ 

"coach,  and  he  promised  to  take  care  of  it,  and  that  the  trunk  .was_ 
lost  out  of  the  coachman's  possession ;  and  if  the  master  was  charge- 
.il  io  with  this  action,  was  the  question.     Holt,  C.  J.  was  of  opin- 
ion,  that  this  action  did  not  He  against  the  master,  and'TTiat"^"  stage- 
coachman  was  not  within  the  custom  as  a  carrier  is,  unless  ^nrh  as 

take  a  distinct  price  for  carriage  of  goods  ^^  as  well  as  persons^, 

waggons  with  coaches;    and  though  money  be  given  to  thg  driver,  yet 
that  is  a  gratuity,  and  cannot  bring  the  master  within  the  custom 77 
for  no  master  is  chargeable  with  the  acts  of  his  servant,  but  when., 
he  acts  in  execution  of  the  authority  given  by  his  master,  ai^d  Lheu... 
tti"e'act  of  the  servant  is  the  act  of  the  master;  and  the  plaintiff  was, 
nonsuked..  Vide  Rep.  B.  R.  Temp.  Hard.  85,  194.     Comyns  25. 

»i  Accord:  Bank  of  Palo  Alto  v.  Pac.  Postal  Tel.  Cable  Co.  (C.  C.)  103  Fed. 
S41  (1900) ;  Bank  of  Batavia  v.  New  York,  L.  E.  &  W.  R.  Co.,  106  N.  Y.  195,  12 
N.  E.  43.3.  CO  Am.  Roi>.  440  (1887)  ;  contra.  Friedlander  v.  T.  xas  &  P.  Ry.  Co., 
130  U.  S.  416,  9  .Sup.  Ct.  570,  3^  L.  Ed.  991  (1,S89).  In  the  last  two  cases  an 
agent,  \\\  fraudulent  collusion  Avitli  a  third  person,  issued  bills  of  lading  for 
whu-h  he  received  no  gcx»ds.       / 

Many  cases  are,  or  are  treated  as,  cases  of  master  and  servant,  instead  of 
!>rlii(ipal  and  agent.  The  safme  principle  governs  each  relation.  Such  are 
th.'  h'ading  cases  of  P.  &  R  R.  Co.  v.  Derby,  14  How.  468,  14  L.  Ed.  502 
ilv.-.j).  and  nearly  all  the  edrly  cases  in  England. 

For  extended  discussion  ofl  the  term  "course  of  employment,"  see  St.  Louis, 
r.  .M.  &  S.  Ity.  Co.  V.  (i rant,  75  Ark.  .579,  88  S.  W.  .580,  11.33  (1905).  The  lia- 
bility of  the  prinflpal  exteids  to  corporations  whose  agents  commit  torts 
while  in  the  course  of  their  employment.  Scofield  Rolling  Mill  Co.  v.  Ga.,  54 
C;a.  ^35  (1S75I.  I 

3  2  The  holding  of  Lord  liolt  that  the  carrier  assumes  no  liability  as  to 
»>aggage  unless  he  takes  a  distinct  price  for  it  is,  of  course,  not  the  law  to- 
day. 


(-yO 


Ch    o)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  769 

STICKNEY  V.  MONROE.  ^ 

(Supreme  Judicial  Court  of  Maine,  1857.    44  Me.  195.) 

Case  for  diverting  waiL-r  from  the  iUiintitY'-^  :nill. 
Ten.n'EY,  C.  J."     *     *     *     It  is  alleg^cdjn  the  writ,  that  the  de- 
fendant dug  up  and  removed'  'tlie  rocks  and  earth  from  the  natural 
" — ^ed  'oT'fli'e  Schoodic^  river,  to  a  great  depth,  and  by  digging  up  and 

"~reiiiovmg  the'^^ank  and  bed  of  the  river  as  aforesaid,  and  bv  usin^       

"ffielicw  and  enlarged  water  gates  as  aforesaid,  did  divert  the  w^ter^  ■ 

of  the  river  from  the  usual  and  natural  course,  etc..   to   the   great  ^  ^  V 

nuisance  and  damage  of  the  plaintiffs.  -  ^y^ 

The  Jury  were  instructed  upon  this  part  of  the  case,  that  if  the^(|>^_ 
detendant  conTmanded^'or^authorized  his  tenant,  Tinker,  to  do  tW      i 
^"Tlasting  and  digging,  which  it  is  alleged  diverts  the  water  from  the 
'     plaintififs'  shore  saw  mill,  or  ratified  and  approved  of  such  acts,  after  ^ 

"^  they  w-ere  done,  and  they  did  in  fact  divert  the  water,  and  occasion  a 
"^  dam^e  to  ,the  plaintiffs'  said  mill,  he  would  be  hable  for  such  dam- 
■     agl;  but  if 'he  had  no  knowledge  of  such  acts,  and  did  not  command 
—  or   authorize   them,  nor  ratify  or  adopt  them,  and   had  no  actual 
knowledge  of  them,  he  would  not  be  liable  for  this  injury.;  npj_coiild 

Lowell's  power  of  attorney  put  into  the  case,  nor  his  general,  a|encv ^ 

in  relation  to  the  defendant's  mill  property,  if  the  jury  arr  SatJi^fififl    .,  . 
-^     that  such  general  agency  is  proved,  authorize  Lowell  to  dig  or  ex- 
"    cavate  the  bed  of  the  river,  so  as  to  divert  the  water,  nor  authorize 
^  'Km  to  bind  the  defendant,  by  giving  Tinker  liberty  to  do  so.  ^ 

-^"•""Special  inquiries  were  put  to  the  jury:     Fir-^t,  'li<l  tlie  defendant 
authorize  or  ratify  the  digging  and  blasting  aii'l  ikximmg  .  >f  tlu 
^     clranheT.drme  by 'Ferdinand  Tinker;  and,  second,  what   amount   oi 
""■(Taniage  was  dune  to  the  shore  saw  mill  of  the  plaintifTs,  by  reason 
■    ol  the  'Ugging  and  blasting  ol.the  rocks  and  .lecpening  of  the  chan- 
nel by  Ferdinand  Tinker?     To  the  first  eiue=tion,  the  jury  answered 
"~  Tn  tlVc  negative;  and  to  the  second,  the  sum  of  seven  hundred  dollars, 
to  thr  date  of  the  writ. 

Tlic  parties  agreed,  that  the  whole  verdict  is  to  be  copied  as  part 
of  the  case,  including  the  special  findings  in  answer  to  the  questions 
proposed,  and  if  the  verdict  for  the  plaintiffs  is  not  set  aside,  on  ac- 
count of  errors  of  the  judge,  or  under  the  motion,  judgment  is  to  be 
entered  according  to  the  legal  rights  of  the  parties.  From  this  we 
understand  that  the  whole  evidence  is  submitted  to  the  court,  and  if 
from  that,  it  is  satisfied  that  the  defendant  is  answerable  for  the  ex- 
cavations made  in  the  bed  of  the  river,  the  damage  foimd  for  that 
cause  is  to  be  added  to  the  verdict  returned,  and  judgment  to  be  ren- 
dered thereon. 

83  Part  of  the  opinion  Is  (nnltted. 
<;<)r)t).rn&  A.— 4'.> 


770 


EKi'MX'TS  ANi>  CDNsijjr KNti'.s  OK  'iiii:  KiM.A'iioN        (Tart  3 


Y 


u 


The  acts  of  a  general  agent,  or  one  whom  a  man  inils  in  his  pkice^ 
to  transact  all  his  business  of  a  particular  kind  or  of  a. particular 

place,  will  hind  his  principal,  so  long  as  he  keeps  within  the  scope  of 

his  authority,  tluiugh  he  may  act  contrary  to  his  4,)riva(e  lusli  uciion§j_ 
linrf  the  rule  is  necessary  to  prevent  fraud,  and  encouia-r  contulenc£^ 
Tnjlealiiiii_.2  Kent's  Com.  (5th  Ed.)  620;  Lohdcll  v.   I '.aim,  1  Mete. 
TMass.)  202  (1840);  Story  on  Agency,  §  126,  an.l  note  (1). 

"The  principal   is   held  liable  to  third  persons,  in  a  civil   suit  for 

frauds,  deceits,  concealments,  misrepresentations,  torts,  negligcjicea, 

and  other  malfeasances  and  omissions  of  duty  in  his  .agent, Jil-Uie. 

course  of  his  employment,  although  the  principal  did  nof  authorize, 

justify,  or   participate  in,  or  indeed  know   of  such   misconduct ;   qF 

even  if  he  forbade  them  or  disapproved  of  them."  "In  every  such 
casej_tlie  principal  liolds  out  his  agent  as  competent  and  fit  to  be 
trusted;  and  tlui\li\ ,  in  efTect,  he  warrants  his  inUlily  and  -o,m1 
"'conduct  in  all  matters  of  his  agency."  Story's  Agency,  §  452.  And 
as  an  illustration  of  the  principle,  a  carrier  \\'\\\  be  liable  for  the  neg- 
ligence of  his  agent,  by  which  the  goods  committed  to  his  custody 
are  damaged  or  lost.     lb.  §  453. 

But  although  the  principal  is  thus  liable  for  torts  and  negligences 
of  his  agent,  yet  w^e  are  to  understand  the  doctrine,  .with__its  just 
limitations,  that  the  tort  or  negligence  occurs  in  the  course  of  the 
agency.  For_the  principal  is  not  liable  for  the  torts  and  negligences  . 
of  his  agent  in  any  matter,  beyond  the  agency,  unless  he  has  exprcss- 
ly  authorized  them  to  be  done,  or  he  has.,  subsequently  adopted  Ihe^, ,  ^„., 


for  his  own  use  and  benefit.  lb.  §  466,  also  section  455.  The  prin- 
cipal is  not  responsible  for  mjuries  done  by  the  person  "employed 
by  him  as  an  agent,  which  he  has  not  ordered  and  which  were  not  ^ 
in  the  course  of  the  duty  devolved  upon  such  person. .  In  -^l^  si^fh 
cases  the  proper  remedy  is  against  the  immediate  wrong  doer,  for 
his  own   misconduct.     lb.    §    319. 

By  the  common  law,  "he  that  receiveth  a  trespasser,  and  agreeth  to 
a  trespass,  after  it  is  done,  is  no  trespasser,  unless  the  trespass  was 
done  to  his  use,  or  for  his  benefit,  and  then  his  agreement  subsequent 
amounteth  to  a  commandment;  for  in  that  case,  Omnis  ratihabitio 
retrotrahitar  et  mandato  as  quissarator"  (aequiparatur).  Coke,  4  Inst. 
317. 

The  evidence  shows,  that  in  the  management  of  the  mill  property 
at  Calais,  in  the  building  of  one  of  the  mills  upon  the  dam,  upon 
which  the  Washington  and  the  Afadison  are  situated,  and  in  the  re- 
pairs made  upon  the  defendant's  mills  from  time  to  time,  and  the 
super\'ision  of  their  operations,  and  the  receipt  of  rents  therefor,  in 
connection  with  the  fact  that  the  defendant  had  his  residence  in 
Boston,  and  was  not  personally  at  Calais  for  many  years  in  succes- 
sion, Lowell  was  at  least  held  out  to  the  world  as  the  defendant's 
general  agent,  in  the  charge  of  the  property  aforesaid.     But   it   is 


Ch.  5)  LIABILITY    OF    FRIXCIPAL    TO    THIRD    PERSON  771 

manifest  that  the  scope  of  this  agency  was  hmited  to  the  business  of 
keeping  the  mills  in  a  proper  condition,  leasing  the  same,  and  receiv- 
ing the  rents  therefor.^*  It  does  not  appear,  that  previous  to  the  ex- 
cavations complained  of  in  this  action,  he  had  undertaken  to  make 
such  an  alteration  in  the  bed  of  the  river,  as  to  cause  a  diversion  of 
the  water  of  the  same  from  the  wheels  of  other  mills,  to  the  injury  of 
the  owners  thereof,  or  that  he  had  done  any  unlawful  act  under  his 
agency,  commanded  before  or  ratified  after  it  was  done,  by  the  de- 
fendant. 

It  is  true,  that  Lowell  is  shown  by  the  evidence  to  have  authorized 
the  defendant's  lessee.  Tinker,  to  have  made  alterations  in  the  chan- 
nel of  the  river,  provided  no  injury  should  be  done  thereby  to  any 
one,  and  when  informed  by  the  plaintiffs  of  the  excavations  made 
by  Tinker,  and  when  he  saw  them,  he  made  no  objections  to  the  fur- 
ther prosecution  of  the  work.  But  at  that  time  the  lease  to  Tinker 
had  four  years  and  one  half  to  run,  and  the  lessee  was  entitled,  on 
request,  to  have  the  same  extended,  and  the  defendant  cannot  be 
aflfected  by  these  facts. 

From  a  full  view  of  all  the  evidence  in  the  case,  there  is  nothing 
showing  that  these  excavations  were  made  for  the  use  and  benefit  of 
the  defendant,  and  that  they  were  done  by  Lowell,  or  authorized  by 
him,  in  the  execution  of  his  agency,  as  he  was  held  out  by  the  de- 
fendant ;  and  under  the  special  findings  of  the  jury,  and  the  law  ap- 
plicable to  the  facts,  the  defendant  cannot  be  held  liable  for  this  por- 
tion of  the  injury  alleged  by  the  plaintifYs.     *     *     * 

Judgment  upon  the  verdict. 


SECTION   3.— FOR   THE    DECL.ARATIOXS.    REPRESENTA- 
TIONS, AND  ADMISSIONS  OF  THE  AGENT 


STANDARD  OIL  CO.  v.  LINOL  CO. 

(.Snr>rfiii('  ("oiiif  (if  .New  .Ii'rsi«y,  V.K'n.     77,  S.  .7.  I.;i\v.  '2'.}l.  (iS  .Ml.  171.) 

Garkisox,  J.     This  was  an  action  on  a  book  accoimt  brought  by 
"Standard  Oil  Compaii}'/'  a"corporalion  o.^  New  Jersey,     ^riic  defend 
ant  filed  a  set-olf  to  sustain  wlii.li   it    u:is  essential  '"  -I'^u    ili  ii   il" 
"Standard  Oil  Company  of  N  corporal 

•■«*  Outside  tho  f(»»rs«'  of  his  «-ini'l<'.viiM'iit.  Ilw  imciit  is  as  iinuli  n  sfriumor 
to  tlif  priiicipiil  as  Is  any  tliird  lu-rsoii.  Larson  v.  Fiiirlity  Mut.  Life  .\s><nr.. 
71  Minn.  101,  7.",  .\.  W.  711  (IS'.IS);  So.  Uy.  Co.  v.  CliainlMTH,  V2i>  Ca.  |i»|.  Tm 
S.  ]■:.  .•57.  7  L.  K.  \.  (S.  S.I  iH't;  (1!i(K!».  Wlicn  tin-  am-nt  turns  aside,  for  how 
ever  short  a  tiine,  from  Ids  |irin<l|)als  worl»  to  cnuane  in  an  aflnlr  wlinlly  Ids 
own,  he  fejises  to  a't  as  a^'ent.  <;alveston.  II.  i^  S.  Uy.  Co.  v.  Cnrrle.  1(i(»  'I'ex. 
l.'',(;,  IM!  S.  W.  1((7.'!,  H)  Ia  U.  A.  (\.  S.)  ;Wi7  (l!»(Hii.  ajiprovrd  In  Craml  'rcniple. 
eV:,  Order  v.  .lohiison  (Te.x.  Civ.  ,\pit.)  \:i'<  S.   W.    17.'.  (I'.Hli. 


772  i:i'im:(^ts  ano  ('(insi^qt'kncks  or  tiik  ki:i,ation        (Part  3 

had  acted  as  ami  was,  in  fact,  the  aj^cnt  of  the  plaiii.liiljn  orderh.i^ 
•  T,..  ./.-^.>.T^7ol^the^~prT^c  of  whidi  the  set-otT  was  filcMl,  The  main 
iTie  dc.rendaiit  toward  ilic  establishment  of  this  f.u  i  wa£_ 
ihc  uUcr  to  prove  the  statements  or  declarations  made  by  tin.'  \an'ons 
persons  with  whom  it  had  dealt  in  the  transaction  in  question.  All 
o{  these  offers  were  proit^rlv  overruled.  Agency  cannot  be  proved  bv 
tlie  declarations  of  oiie  assuming  to  act  in  that  cainicitv.  Until  the 
declarant  isjKown  to  be  the  agent  of  a  party  to  tin  nil,  his  declara- 
tiini£~(nVcTuding  his  declaration  that  he  is  such  agent)  are  madmissN 
life. __Bxyu"ti eld  V.  Denton,  72  N.  J.  Law,  235,  61  Atl.  37K.  ^ 

ifter  a  specific  ruling  to  this  effect  upon  a  question  put  to  a  wit- 
ness that  was  on  the  stand,  the  state  of  the  case  shows  that  "the  de- 
fendant thereupon  stated  that  he  desired  to  show  facts  and  circum- 
stances in  the  course  of  the  dealings  between  the  alleged  plaintiff  and 
defendant  from  which  as  a  whole  it  might  be  inferred  that  the  New- 
ark concern  was  the  agent  for  Standard  Oil  Company  of  New  York." 

"The  court  adhered  to  its  former  ruling,  and  refused  to  admit  the 
testimony." 

If  the  statement  of  a  desire  by  the  defendant  be  taken  as  equivalent 
to  an  offer  of  proof,  the  ruling,  in  effect,  was  that,  if  the  desire  was 
to  bind  a  party  to  the  suit  by  declarations  of  persons  assuming  to 
act  as  its  agents,  it  was  within  the  ruling  already  made.  If  the  de- 
fendant desired  to  adduce  testimony  that  did  not  fall  within  this  ruling, 
an  offer  to  that  effect  should  have  been  made  in  such  form  that  the 
court  might  determine  whether  the  new  offer  differed  in  principle 
from  those  already  ruled  upon.  This  might  have  been  done  either  by 
putting  to  a  witness  a  specific  question  calling  for  such  new  testimony, 
or,  if  the  court  permitted  an  offer  to  be  made,  by  making  an  offer  to 
prove  certain  definite  facts.  From  the  brief  of  counsel  for  the  de- 
fendant, rather  than  from  the  state  of  the  case,  it  is  to  be  gathered 
that  what  the  defendant  wanted  to  prove  was  a  series  of  statements 
made  by  persons  not  authorized  to  bind  their  employer  by  volunteer 
declarations  or  narratives  touching  the  master's  al'fairs.  It  cannot  be_ 
too  often  pointed  out  that  the  mere  fact  that  one  employs  others  ~tj3 . 
'^ZSoik  lojL.hhn  does  not  make  him  chargeable  with  what  they  may  say 
about  him  or  his  affairs  while  in  his  employ.  If  he  cmplpys„them  to. 
__lalk  for  him,  a  different  case  may  be  presented.  King  v.  Atlantic 
Cy.  Ga.  Co.,  70  N.  J.  Law,  679,  58  Atl.  345.  ' 

Finding  no  legal  error  in  the  case  presented  upon  this  appeal  the 
judgment  of  the  First  District  Court  of  Jersey  City  is  affirmed. 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  773 

HILL  V.  HELTON. 

(Supreme  Court  of  Alaliama.  1SS6.    SO  Ala.  52S,  1  South.  340.) 
ClopTon,  J.^=*     The  appellee  brings  this  suit  to  recover  the  pro- 
ceeds of  cottorTwTTrcTrwas  soldby  tlie  appellants  as  commission  mer-       * 

diailtb.    There  seems  to  be  no  controversy  as  to  the  ownership  or  sale_^     /^ 

— ^TtHe 'cotton.     The  disputed  question  is,  in  what  capacity  did  John;,.  ,  ^ 
son  Martin,  to  whom  defendants  accounted  for  the  proceeds,  ^Ct—    ,a# 

whether  he  shipped  the  cotton  merely  as  depot  agent,  or  whether,  as 

agent  ot  the  plaintiff  under  an  arrangement  between  the  defendant  ,      '^ 

and_JUtt^  by  which  they  advanced  him  money  to  control  the  slup^      , 
ments  of  cotton?     *     ♦     ♦  ,  u      •      ^2^ 

-Agency,  like  any  other  controyertibjeJact,_may_be  _p.rpyed  .by-£ir-  '^^Vt^ 

cumstances.  Tt^nTay  be  inferred  from  previous  emplc'\nicnt  in  sim-       ^       x^ 

'-'  ilar  acts  or  transactions,  or  from  acts  of  such  nature,  and  ^-  ccmtmu-       ^ 

oiis    as  to  furnish  a  reasonable  basis  of  inferencejhat   the>    v.eic 

known  to  the  principal,  and  that  he  would  not  have  allowed  tlie  agent^^ ^ 

so  to  act  unless  authorized.     In  such  cases,  the  aei:.  ur  Uan.acUoii&— ^ 

are  admissible  to  prove_agency.    But,  in  order  to  be  relevant,  ihe  al-      . 

'^T^^erriJTlncIpSnnuC'mlome  way,  directly  or  indirectly,  be  conneeied 
' — vvith  the  circumstances;     The  agent  nui:^t   have  a^^uincd  i-.  lepicciit 

the  principal,  and  to  have  performed  the  acts  m  his  name  and  un  lui..^^ — _, 

"l^ehalf      The  testimony  of  the  witness  Allison  tended  to  prove  noLhs » 

ifig  more  than  that  Martin  was  engaged  in  the  business  of  shipping 

^-th-rtrDtToTTor  planYers  in  the  neighborhood  of   Stevenson  other  than      _^ 

the  plaintiff,  and  receiving  and  controlling  the  proceeds,  and  that  Uus    -^ 

w'as  generallv  known.     It   is   not   pretended   that   he  had   previously        _ 

shipped  or  controlled  any  cotton  as  agent  of  the  plaintiff.     From  the ^ 

■^'^acts  that  Martin  was  engaged  in  the  business  of  shipping  cotton,  scp- 

arite  from  his  duties  of  depot  agent,  and  had  contrullcd  the  coLtoii 

•-    of  other  planters,  it  does  not   follow,  and  cannot  be  reasonably  in- 
— leffed  that  the  pTamtirimrnTnTzecrnmrEo  stiip  ancrcontfol  the  cotton 

^ nTque'stlon  as  his  agent.     Acts  done  by  Martin  as  the  agent  of  other 

**-platTtcrs  are  not  admissible  and  relevant  to  prove  agency  m  thr  pat 

ticular  shipment  of  the  plaintiff's  cotton,  in  the  absence  of  other  exi 

—  deuce  or  authority,  express  or  implied  from  circumstances.  furnislnnK 
— "^a'ground  of  reasonable  inference  of  assent,  adoption,  or^acqu^scence. 

Fisher  V.  Campbell,  9  Port.  210.  """^       .-,,•.  y 

The  declarations  and  adni.  ■  an  agent  are  admissible  against  ^ 

and   bind   his   principaT,   when    hikm    during  1i-    - ""■"'•   of   Uic  ^ 

"'     agency,  and  while  in  the  discharge  of  his  di                                 l-ccting  / 

a  transaction  then  depending,  and  so  contemi.uiane.m.  wiiU  me  main 
fact  or  subject  of  the  agency  as  to  constitute  a  part  of  the  res  gc:.Lx. 
"The  rule  adiiiitling-thc  UccUi:aLk>u*.-oi-aii  aM^ut  i^  founded  upon  Uic 
li^^ildiTitity  of  the  agent  and  the  principal,  and  therefore  UlcjJimil 


s-  Part  of  tlio  ojtininii   Is  omit  tod. 


"tJ-i  KKKKrrs  AM»  ('t>Nsi'.gri:N(i:s  <»k  'i'iik  kki.aiidn        (Tart  ."► 

in\\\  M  f.ii-  aaAlliU',C-ii^ullu>niy  to  inako  iIumu."  Declarations,  mere 
ijust  oecurrni'''"^.  ^''''  "'^'  aiJuii*iw44«r-T)aiiner  L.  ^  L. 
I.O.  \.  Monewall  Ins.  Co..  77  .Ma.  1S4;  Wliart.  Ev.  §  1173;  1  Green!. 
Kv.  §§  113.  114.  rreliniinarv  proof  of  autliority  to  make  the  declara- 
tions is  rciiuisile  to  their  admissibility  and  l)indin^  effect.  The  let- 
JjSXS^nd  \ynilen_statcnients  of  Martin,  oUcrcd  hy  th^;*  drfpiidRr*^'?,  ^^"^ 
hut  his  declarations,__Xhc.  evident  purpose  of  tlipir  infrmlnrtinn  waj 


to  shmv  eitlier  the  aj^eney  and  tlic  extent  of  anthnrity.  r.r  a  ]-.nn-hriQP 
of^the  colfoTPa"ncl~payuient  tlierefor.     They   arc   not  adiiii,s.-.!Mc    for""~ 
cithcr^^myoap.  .  Ap;ency  and  the  extent  of  authority  must  be  estab- 
lished  by  eviden'cF'DThor  than   the  acts   and  .sta.tements  of   {lie   sup- 
posed agent.'   "None  of  the  letters  or  statements  prima  facie  i\prc>cnt'~^ 

*  anv  transaction  performed  by  Martin  as  agent  of  the  plaiuiiH,   and 

while  in  the  discharge  of  his  duties  as  such  agei]J.,__With  t\\"  rxcrp- 
tionsTflTTmrOf  them  allude  to  theVotton  in  controversy;    ami  iliose 
"\\'hich  make  any  reference  to  it  are  narratives  of  past   Dccuncnce^^-^ 
and  declarations  of  a  purchase  and  payment.    They  do  U'l  r ,,,,  ,_  wiiliiii 
the  rule  of  admissibility.'"^     *,    *     * 
"Judgment  for  plaintiff  affirmed. 

3«  Accord:  Geylin  v.  Do  Villeroi,  2  Hoiist.  Hit  (ISfiO),  supra,  pp.  50,  P,r,4.  in 
which  tlie  court  charged  the  jiu-y:  "Wherever  one  ix;rsou  appoints  another  his 
iiirent.  to  represent  liini  in  an.v  Imsiness  transaction,  then  wliatever  the  a.ijent; 
does  within  tlie  scope  of  Ids  autliority.  or  in  the  hiwful  prosecution  of  tlial  l)usi- 
ne.'v''.  becomes  In  law  the  act  of  the  principal  whom  he  represents.  And,  that 
wherever  the  acts  of  the  agent  will  bind  the  i>rincipal,  there  the  representa- 
tions, orders,  dei-larations,  admissions  and  statements  of  the  agent  in  resi)ect 
to  the  .same  subject  matter  or  business,  will  also  bind  the  principal,  if  made 
nt  the  time  of  the  transaction.  These  representations,  orders,  declarations, 
/  admissions,  or  statements  are  received  and  considered  as  original  evidence, 
as  verl)al  acts  or  facts  constituting  part  of  the  transaction  itself  and  not  as 
liearsay ;  and  tlierefore  it  is  not  necessary,  as  has  been  contended  for.  to  call 
tlie  agent  himself  to  prove  tliem.  but  the.v  may  be  proved  by  any  other  com- 
lieteiit  testimony  or  witness.  P.ut  it  is  insisted  by  the  counsel  for  the  de- 
f<  iidant  that  tlie  fact  of  agency  has  not  l)ocn  i)roved  in  this  case,  neither  ex- 
pressly nor  by  implication  or  inference.  If  It  has  not,  then  certainly  the  pli'.In- 
tiff's  ciise  has  failed,  and  your  verdict  should  be  for  the  defendant.  But  if, 
on  the  other  hand,  the  existence  of  the  agency  has  been  shown  to  the  satis- 
faction of  tl»e  jury,  either  expressly,  or  by  implication  or  fair  inference,  then 
we  say  tiie  iilaintitf  is  entitled  to  recover  for  whatever  was  done,  supplied, 
or  exitended  under  the  directions  of  the  agent  and  within  the  scope  of  his 
authority."  This  is  substantially  the  doctrine  as  stated  by  Story  on  Agency, 
•  H'.ot.-fl  in  Sandford  v.  Ilaiidy.  'S.',  Wend.  200  (1S40).  The  contlicting  opinions 
of  the  judges  in  Udell  v.  Atherton,  7  II.  &  N.  171,  7  Jur.  (N.  S.)  777,  80  L.  J. 
Bxch.  337,  4  L.  T.  Rep.  (N.  S.)  797  (1861),  are  suggestive. 


Ch.  5)  LIABILITY    OF    PUIXCIPAL    TO    THIRD    PERSON  775 

HOYER  V.  LUDINGTON." 

(Supreme  Court  of  Wisconsin,  189S.    100  Wis.  441,  7G  N.  W.  348.) 

The  complaint  alleged  that  one  ^Meyers  was  ap:ent  of  T.ndinqfton 
to  sell  his  lalKt;  that  as  such  ag-ent  he  organized  a  corporat- 
it,  and  by  false  representations  induced  the  jilaintiff  [o  bu;  .n_     _^^ 

such  corporation,  which  was  worthless,  etc.     Wlurn'Mic   hv  i"'ayed     ^ 
rmtsrfflent  against  Ludiu^tnil  aiul  ^[£y.ers.  ^j^^ 


Iassoday,  C.  J.^*     *     *     *     fi^g  action  having  come  on  for  trial 
before  the  judge  and  a  jury,  and  a  witness  having  been  upon  the 
stand,  the  defendant  Ludington  objected  to  any  evidence  under  the  n>yJ^ 
complaint  as  to  him,  upon  the  grounds  that  the  complaint  did  not  ^^/Tl^ 
state  a  cause  of  action  as  against  him.     Thereupon  the  court  sus-  ^^^^^^ 

tained  the  objection  of  Ludington,  and  ordered  the  complaint  as  to  ^^ 

him  to  be  dismissed.  From  the  portion  of  the  judgment  entered 
thereon  accordingly,  dismissing  the  action  as  against  Ludington,  the 
plaintifif  brings  this  appeal.  ' 

There  is  no  doubt  of  the  general  proposition  that,  if  a;i 

employed  to  ettect  the  sale  nt'Tan'dc;  for  hTs  princiiial,  and  i 

by  meanT"Of  falsf  rri-r.  ; -^'i    i"  tlu'  land  cnnvr>rd. 

even  without  the  auihoni;   w,    i^mw^w.^c  oi  his  princiiial,  tin-  latter 

'       Ts  chargeable  with  such  fraud  in  the  same  manner  as  if  lir  had  kn.iwii 

or'authorized  the  same.     Law  v.,  Grant,  37  Wis.  548;    McKinnon  v. 

"  Vollmar,  "l'^  Wis.  82,  43  N.  W.  800,  6  L.  R.  A.  121,  17  Am.  St.  Rep. 
178;  Gunther  v.  Ullrich,  82  Wis.  222,  52  N.  W.  88.  33  Am.  St 
Rep.  32.  AnJ  fhi^  ^.;  pcpprinllv  ..n  where  the  principal  accepts  and 
enjoys  the  1)enehts  ot  the  i)urchase...    Fintel  v.  Cook,  88  Wis.  487, 

— CCrX.  V.'    ~  I'm.  ivni  tlKii,  ■"the  representation  which  is  to_bind 

the  priiic;--..  '   '"    n.-id,-  i:i  r.  I'rmuT  to  tlic  sul>irot-mnttcr  otnis 

^^^jnaking  of  sucii  a  rLprc^Dcuiaiioii  niu.-^i  uc  winiin  in'-  a^.paixiiL  ^^cope  of 

his  authority."    Mechem,  Ag.  §  74.^. 
~^   Here  the  alleged  i.-d  .  n.  .i   made  in  refcrcnr- 

to  the  sale  of  tii--  la-id  '  -i-^''  '   of  tlir  a-c;u;. . 

Hut  whoTIv  ill   I'  I'  !■  II   ■ 
-  .     ■    '  '  ■  .•   lau.I.      T';    : 

'.vith  thr  '  ■  '■' 


I') 


•   [jrctL-iiM:   mat    I  .uiiiii^ii  m  :  »..,_<- 

or  the  procuring  of  siib.^^ 
iie  cor[)orai  i' Ml.     Tnic,  it  is  alU-cU  lli>a_^ 
MUM    raise  aini    ii..iiM,n.ML    ■  cprcscnluliuiib,  and   each   of   tlicni.    were 
made  by  Meyers  as  the  agent  of  Ludington,  and  vvhil  uiiiiii. 

.iTAeronl-  .M:itl.-s..M  v.  i:l<v.  llC  Wis.  r'.'JS.  OU  N.  W.  1  H>;i  (l!l(i:;».  in  ul.l- h. 
ho\V..vtT,  tliC  court  f.MiiKl  the  n'|.nseiilatl..lis  cf  tlir  lU.-nl  will. In  tlie  s.npe 
of  his  iMilliorlty.  t<'st.-.i  not  l>.v  the  Intention  of  the  prineli-iil.  hut  hy  eon- 
ueetlon  with  the  j-ropcrty  nn.l  hnslness  of  the  nueiie.v.  S.-e.  lUso  I-!ilhi>Mi  v. 
I'lrst  .Nit  r.inl;  'f  \rl<  :!1.".  Vl'l  S.  W.  ItifJ  (l!Kl«H;  Miissey  v.  ISiKher.  .5  (  iish. 
511  (IS it))':    Olson  v.  V,.  .\.  Uy.  Co..  SI  Minn.  402,  S4  N.  W.  219  (MMKI). 

88  I'jirt  of  the  opinion   is  omitted. 


776  EFFECTS   AND    CONSl'QrKNCES   OF  THE    UEI-ATION  (Tart    o' 

the  coursc^aml  sco£e_of  his  cinjQloynuMit.  The  demurrer  ore  tenus 
only  admitted  the  issuable  faets  alleged  in  the  complaint,  but  did  not 
admit  such  mere  conclusions  of  law  from  the  facts  alle<;ed.  Aron  v. 
City  of  Wausau,  98  Wis.  5^)2,  74  N.  W.  354,  40  L.  R.  A.  7Zi,  and 
cases  there  cited.  The  representations  of  Meyers  in  respect  to  the 
corporation,  and  the  capital  sttuk  tlurrof.  wore  iiotj^iithin  thg  ap-  , 
parent  scope  of  his  am]n)rity  to  ^«.ll  ilic  land.  Uesides,  it  appears 
fl-om  the  complaint  that  Meyers  was  only  an  agent  of  Ludington  for 
the  purpose  of  selling  the  particular  lands  in  question.  He  was  not 
a  general,  but^ily  a  special,  agent-  "The  scope  of  the  authority  of  ^ 
a  special  a^ent  is  ordinarily  much  more  restricted  than  thni-  of  a  p;pn- 
erd  agent."  Mechem,  Ag.  §  285,  "While  a  general  a^ent  may  bind 
his  principal  when  acting  ^yithin  the  scope  of  his  ap|3arent  authority^ 
although  he  exceeils  his  specific  instructions,  yet  that  is  not  the  rule  .^ 
in  the  case  of  a  special  agcut.i'  Bryant  v.  Bank,  95  Wis.  481,  70 
K.  W.  482,  and  authorities  there  cited.  We  are  clearly  of  the  opinion 
that  the  complaint  fails  to  state  a  cause  of  action. 

JThe  portion  of  Jhe  iud^:ment  of  the  circuit  court  appealed  from  is 
afErraed.  "~ 


SECTION  4.— FOR  NOTICE  TO  AGENTS 
I.  In  Generai, 


MERRY  V.  ABNEY. 
(ITlfrh  Court  of  Chancery,  1661.    1  Ch.  Cas.  .38,  22  Eng.  Reprint,  682.) 

Chief  Justice  Foster,  the  Master  of  the  Rolls: 

A.  contracts  with  B.  for  sale  of  Lands,  but  sells  them  to  C^etc,,^ 
sans  Notice  of  the  first  Contract. 

Kendal  contracted  with  the  Plaintifif  to  sell  him  certain  Lands  in_ 
Leicestershire.  Aftcr\vards  Abney  the  Father,  who  lived  near  the 
LandStJ.n  behalf  of  Abney  the  Son  (a  Merchant  in  London)  purr  . 
chaseth  those  Lands  of  Kendal,  and  had  a  Conveyance  from  Kendal 
fo~Aliney"the  Son,  and  his  Heirs.  The  Plaintiff's  Bill  was  to  be  re- 
lieved upon  his  Contract  with  Kendal,  and  against  the  Conveyance 
to  Abney,  and  charged  Notice  of  his  Contract  to  both  the  Abneys. 
Abney  the  Son  pleads  himself  to  be  a  Purchaser  bona  fide,  witlnjut 
any  ijjQUce.Df  Kendal's  Contract  with  the  Plaintiff,  and  without  any 
Trust  for  Jns  Father.  . 

The  Court  declared.  That  Notice^to  the  Father  in  this  Case  waj 
Notice  to  ITie   Son,  and  should  afifect  the  Son,  who  was  the  pur- 


/ 


"^A^LA 


Ch.  5) 


LIABILITY    OF    PRIXCITAL    TO    THIRD    PERSON 


777 


cliaser.^^  So  that  Notice  of  a  dormant  Incumbrance  to  a  Party  that 
purchasclh  iQL..anoth~err~shall  affe^_Mthe  ..very  Purchaser.  And  ac- 
"cordingiy  was , this  Cause  decreed,  it  appearing  at  the  Hearing,  that 
Abney  tTie  Father  had  Notice  of  Merry's  Contract  before  he  pur- 
chased for  his  Son. 


FIELD  V.  CA^IPBELL. 

(Supreme  Court  of  Indiana.  1904.    1G4  Ind.  8S9,  72  N.  E.  2G0,  108  Am.  St.  Rep 

301.) 

Action  by  Campbell,  as  administrator  of  the  estate  of  one  Noblett, 

to  recov.er„^'X  aote>  and  to  foreclose  a  mortgage  .which  defendant 

and  her  husband  executed  to  secure  said  note.     The  note  was  givf.n,^ , 

toraise  money  to  pay  for  the  husband  a  deficit  in   his  accounts , ^^s ,,.,. 
'Treasurer*'oT' Orange  county.     The  evidence  showed  thatj  if   Noblett 


aid  not~T<nbw  tliis  purpose,  his  agent  Hicks  must  have  known  it.  .,_ 

~  'I'he.  infliann  statute  made  any  contract  of  suretyship  by  a  married 
womanyoid.    Judgment  for  plaintiff. 

^  ^JiLLETT,  J.*°  *  *  *  4  \y^  determining  the  extent  that  Noblett 
had  notice  of  what  was  to  be  done  with  the  money  received  by  appel- 
lant, it  is  important  to  consider  what  notice  he  himself  had,  and  the 
notice,  if  not  the  actual  knowledge,  which  his  agent,  Hicks,  had,  and 
the  notice  based  on  the  record.  Notwithstanding  any  conclusions 
indulged  in  by  Hicks  in  his  testimony,  it  is  plain  that  he  was  an  agent 
of  Noblett,  not  only  to  appraise  the  land,  but  to  pass  upon  the  title 
and  conclude  the  loan.  All  this  was  within  the  scope  of  his  agency, 
and  to  the  extent  that  he  fiad* notice  or  knowledge  must  notice  or 
""TafTowlecTge  be  imputed  to  his  principal.    It  is  laid  down  in  Story  on 

^   Agency ,'"%"T40.  that  "notice  of  facts  to  an  agent  is  constructive  notice 
thereof  to  the  principaTTunisclTTTvlu  i  r  it  ,iii  >  ^  iidiu,  -i  i 
connected  with,  the  subject-matter  ^t  hi^    i    ■    >  '■  >    i 

principles  "oT  public  policy,  it  is  iJii^nn.' 
municated  such  facts  to  the  principal, ^4iui 
principal  having  intrusted  the  agent  with  th 
onier  party  has  a  right  to  deem  liis  acts  ^m).i<nQw.h'"' 

npofT  the  principal."    It  was  said  by  T^ord  I'.roughman  ii 

Green,  3  Myl.  «.K:  K.  609:  *'Tli£_ilQ£liim£_of_constructiye  notice  de- 
pends  upon  two  considerations:  First,  that  certaiirnmigs  existing  ill 
the  xdaLion  or  conduct  of  the  parties  aTlh"niF"case  J^^wy.^"'!  ll^^jij 
_be£ct  a  jjresumption  so  stronjg^  of  actual  knowledge  that  4 hf  law 
holdnEcl1<nrnvTedge  to  exist"  hccausc^itjOiu3ily.,iiiipi:uba.ljk±liitt  it 
should  notT~and,  nexTrtTiat  the  policy  and  safety  of  the  public  for- 


C^ 


It  the  time  / 
iicral 


11    \'.K     h,;      n-t.  Still,  the  .„.e^. 
parliciil.il    ''•;-^i!i('ss,  \\\6 
t.TV 

k.,,,,.dv  V. 


30  Notice  to  the  ncrnf   Is  pind  notice  to  the  party. 
Vern.  .'►74,  2  Frcciii.  2;»<».  'j:!  Kim.  Kci'rint.  97:5  (17<K\). 
«o  Part  of  the  oi»lni<ii)  l.s  oniitd'd. 


Brotherluu  v.  llatt,  2 


778  KiTiiCTS  AND  (.•i>.\six>ri:N»'i;s  ok  tiik  kklation        (Part  '\ 

_]2id--3--PCESi).U.to  (lony  knowledge  while  he  is  dealing  so  as  to  keep 
liiiiiself  ignorant,  or  so  that  he  may  keep  luniscli  ii;uor.aut,  and  ye^ 
aTI  the  while  let  his  agent  know,  and  himself  perhaps  profit. by  thaj: 
knowledge._  In  such  a  case  it  would  be  most  ini(|uilous  and  most 

"tlangerous,  and  give  shelter  and  encouragement  to  all  kinds  of  fraud, 
were  the  law  not  to  consider  the  knowledge  of  one  common  to  both, 
whether  it  be  so  in  fact  or  not."  A  writer  on  the  law  of  agency  states 
the  doctrine  thus:  "The  principal  is  chargeable  with  notice  of  all  the^ 
material  facts  wdiich  come  to  the TaTgWtethrt  of  hla  a^ent  m  the  trans- 
actions in  w^hichTHe  agent  is  acting  for  tTieprincipal.  If  this  were 
not  so,  a  purchaser  would  always  free  himself  from  possible  equities  , 
arising  from  the  acquisition  of  knowledge  of  adverse  rights  bv  our-  . 
chasing  through  an  agent.  Jt  is  against  the  policy  of  the  law  to 
place  one  who  deals  through  an  agent  irTlfFelTe'r  "^sition  ilian'  one 
who  deals  in  person."  Huflfcutt  on  Agency,  §  l41.  "My  solicitui ," 
as  was  said  in  an  English  case,  "is  my  alter  ego ;  he  is  myself.  I 
stand  in  precisely  the  position  he  does  in  the  transaction,  and  there- 
fore his  knowledge  is  my  knowledge ;  and  it  would  be  a  monstrous 
injustice  that  I  could  take  advantage  of  what  he  knows  without  the 
disadvantage."     Boursot  v.  Savage,  L.  R.  2  Eq.  134. 

5.  The  fact  that  the  mortgage  to  the  bondsmen  of  the  husband  was 
of  record  lifts  the  information  which  Noblett  admits  that  he  had  con- 
cerning it  above  the  plane  of  mere  rumor,  if  his  answer  upon  the 
stand  is  to  be  so  construed.  "Any  instrument  afttcting  the  title 
which  is  properly  recorded  is   absolute  notice  to   every  one^  suL"sc- 


que n tlj 'dealiTig  with  the  title,  irrespective  of  whether  such  person^ 
has  examined  the  records,  or  even  had  an  opportunity  to  make  aji^ 
cxanTinatipn."    Wade  on  Notice  (2d  Ed.)  §  97.     See,  also,  W'ehl)  v. 
Johnli^ncock,  etc.,  Co.,  162  Ind.  616,  69  N.  E.  1006,  66  L.  R.  A. 
632;   McPherson  v.  Rollins,  107  N.  Y.  316,  14  N.  E.  411,  1  Am.  St. 
Rep.  826. 

6.  Taken  as  a  whole,  the  authorities  warrant  the  assertion  that 
the  notice  which  the  law  imputes  from  notice  to  an  agent,  or 
from  the  fact  that  an  instrument  in  the  chain  of  title  is  prop- 
erly of  record,  is  the  equivalent  of  actual  notice.  We  are  not  un- 
mindful that  a  false  representation  might  sometimes  lead  a  per- 
son who  contemplated  loaning  money  on  real  estate  security  to 
omit  to  examine  the  record,  but  we  fail  to  perceive  how  the  ef- 
fect of  such  a  representation  would  be  to  prevent  an  agent  from  in- 
forming his  principal  of  facts  which  it  was  nevertheless  the  agent's 
duty  to  communicate,  or  why  that  should  furnish  any  reason  for  not 
conclusively  presuming,  as  in  other  cases,  that  the  duty  of  the  agent 
to  communicate  facts  of  importance  to  his  principal  was  discharged. 
And  the  indulgence  of  this  presumption  in  the  case  before  us,  thereby 
infecting   Noblett   with   the   notice   of  Hicks,   makes   it   just,   as  we 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    TIIIUD    PERSON  779 

think,  to  hold  that  the  representation  of  appellant  was  not  of  such 
a  character  as  to  relieve  Noblett  of  the  imputation  of  record  no- 
tice.*^    *     *     * 

Judgment  reversed  and  a  new  trial  ordered. 


CLEMENT  V.  YOUNG-McSHEA  AMUSEMENT  CO."' 

(Court  of  Errors  and  Appeals  of  New  Jersey,  1900.     70  N.  J.  E«i.  077,  07  Atl. 
82,  lis  Am.   St.  Rep.  747.) 

The  Amusement  Company  owned  a  building,  fronting  on  the  board 

vvaTg^]^f_Atlantir  Citv,  knOAvn  a<  Ynuiii^^'s    ll-ul.      The  ooniiiany  is  a 

COrrnratjrm  with  1,500  shares  of  slock,  nt  which  Juhn  I..  \(nuig 
owned  l,4?Dr- He  was  treasiirer  of  the  company,  and  his  son-iii-lau . 
Shackelford,    was    tin-  -  ^  rv.      Tlicrc   were    two    otlicr    dircciors. 

Yfiimpr  rnn1r()]l(  il    llir   ,  i    the   cnnilian\  ,  and   h;id   unwriltcn   au- 

thority  to  lease  its  properly.     Shackelford  was  its  manager.     Clement 
leased  from_  Young  a  space  at  the  entrance  of  the  hotel   for^  a  soft_ 
"TrFiTnc"  stand."    Shackelford  made  out  and  signed  for  Young_a^leas.e  of^ 
the"lame"fbr  ten  years,  and  Clement  fitted  up  the  stancF  at  a  cost,  of ^ 
""^^f6!00D.     Shackel f ord,,gQll,e.Qted_ th_e Jlcnj^lljJ    Young  reported  to  the 
company.    Two  years  later,  the  company  brought  eiectmcnt.  and  plain- 
TiFsTlcd" 'this  bill  to  enjoin  the  prosecution  iiL_thc  suit.    Decree  for^ 
perpetual  injunction,  and  the  company  appeals. 

— Dixon,  J.*^     [After  holding  that  unjler  the  New  Jersey  statute  of__ 
frauds  ^ch  a  lease  madebv_j£i_  aL^ent  notlTayTn^  written  authority^ 


*i  Areord-  Suit  v.  Woodhall.  113  Mass.  391  (1873).  The  notice  may  be  im- 
plied, as  well  as  exi)i('ss.  Hart  v.  Siindy.  IV.)  W.  Va.  04-1,  L'O  S.  K.  00r>  (1S04». 
The  presuiiiptiun  that  the  a^eiit  has  itimimiiiicaled  material  facts,  coining;  to 
his  kiK.wledfie  as  to  the  business  intrusted  to  him.  is  conclusive,  ^rill^'le  v. 
Modern   Woodmen  of  America.   70  Neb.   USA,  107   N.   \V.   750,   113  N.   W.   231 


(lOOOl. 

<2  Accord:  Toi.liff  v.  Slia.lwcH.  OS  Kan.  .•.17.  74  I'ac.  1120  (1004).  "Notice 
to  an  a^ent  of  facts  not  arisinc  from,  or  coiinc<t«-d  with,  the  subject-matter 
of  his  atrency.  is  not  notice  to  the  principal,  unless  actually  coiMnnuiicMlcd  to 
him"      Kenton,    llolnn's  .^   Co.   v.    Monnicr,   77   Cal.   440,    10   Tac.   S20   (IssM. 


••The  ayent  represents  the  i.rindpal  only  in  the  matters  iiertalnin«  to  his 
auency."  Stewart  v.  Sonneborn.  40  A!-;.  17s  (1S73).  The  notice  nnist  be  as 
to  a  nmtter  \vlii<b  it  is  the  aKenl's  duty  to  connnnnlcate  to  his  iirincii)al.  IVn- 
nover  V  Willis  20  Or.  1,  3f;  I'ac.  r.os.  40  Am.  St.  Uei'.  504  (isOli;  Warren  v. 
ll-iyes  74  N  II  ."'.."),  (hS  Atl.  10:{  (10(l7).  This  a|>i.lics  with  sii.-cial  force  to  a  ^ 
c„n)oralion  wlibh  has  dilTerent  au.-nts  for  dllle.ent  departments  of  Us  busl- 
ne.ss.  International  Uuiblim;  i*^  I-oa"  Ass^n  v.  Watson,  l.'.s  Ind.  .''.OS.  (,  N  K. 
'Si  fUK>2);  Missouri.  K.  .Sc  T.  Uy.  r„.  v.  I'.ebher.  ss  Tex.  r,l'.».  :!2  S.  ^^•  ••I'; 
(IS'l.-,)  I'.v  the  same  rnle.  and  within  the  same  limits,  the  previously  acpiired 
knowledjre  of  lii..  a^'cnt  is  available  to  the  princii-ai  for  his  benelil.  Ilaincs 
V.   Starkev.  S2   Minn.  2:;0.   s|    N.    W.  010  (IOl»l). 

I'.ul  the  aKcnt  is  presum.'d  lo  comnuinlcale  to  ids  j.rinclpal  every  fa<-l  luiv-  ' 
inj:  dire<-t  and  importaid  bearing  on  the  subjeclmatler  of  the  a^'en<y.  and  / 
the  principal  will  be  chartred  with  notic  of  sudi  fads.     lUene  v.   Ue.l   I. Inn 

Hotel  Co..  :{i  cai.  100  dsoo.. 

*"•  Tart  of  the  oiiiidun   is  omitted.  ' 


'  u^ 


t/ 


I 

-so 


KFFKCTS    AN1>    I'ONSIU}!' KNCKS    OF     llIK    KKLATIOX  (I'ai't    3 


was  HI  elTcct  a  lease  at  will,  ami  considering  the  elTect  of  tlie  knowl- 
eiljio  by  Youn«;  and  Shackelford  that  complainaut  was  paying  thc.r^nr     » 
_-'2±l^^L"^-^'''^  tlW  iuiprgY?"1g"<^s :L^  *     *     *     Finally,  it  is  urged  that 
the  knowledge  of  Younp^  and  of  Shackelford  should  be  imuutcd  to  the 

"jTop^P^i^y- 

Assuming  that  Young,  in  executing  the  lease,  was  attempting  or  ap- 
pearing to  act  for  the  company,  notwithstanding  the  form  of  the  in- 
strument, then,  if  his  knowledge  that  he  was  overstepping  the  bounds 
of  his  authority  is  to  be  deemed  notice  thereof  to  his  principal,  no  ef- 
fective limitation  can  be  imposed  upon  the  power  of  an  agent.  By  the 
very  act  of  transgressing  the  limits  of  his  authority,  the  agent  would 
generally  for  all  practical  purposes  enlarge  them  to  the  full  extent  of 
his  transgression.  Nothing  short  of  immediate  personal  investigation 
on  the  part  of  the  principal  would,  in  most  instances,  protect  his  rights. 
An  examination  of  the  cases  already  cited  will  show  that  such  a  doc- 
trine has  no  place  in  either  legal  or  equitable  jurisprudence. 

The  knowledge  of  Shackelford  canno^be  jmimted  to  the  company ,^^ 
becau se  TTe^was  never, authorized,  to  act  as  its  ageut-in-««y-niaU£r_f6_ 
'  wTnch.l,h9.t_  knp3vledge  was  pertineJit.  His  testimony  is  explicit  and 
uncontradicted  that  in  signing  the  lease  and  collecting  the  rent  he  acted 
solely  on  behalf  of  Young,  and  had  no  authority  whatever  from  the 
company.  Although  he  was  secretary  of  the  company  during  the  run- 
ning of  the  lease,  and  became  a  director  in  November,  1903,  yet  in 
neither  capacity  did  any  duty  rest  upon  him  concerning  the  complain- 
ants' tenancy.  Whether  the  view  stated  in  Sooy  v.  State,  41  N.  J. 
Law,  394,  or  that  stated  in  Willard  v.  Denise,  50  N.  J.  Eq.  482,  26  Atl. 
29,  35  Am.  St.  Rep.  788,  be  adopted,  knowledge  possessed  by  one  per- 
son cannot  be  ascribed  to  another,  unless  there  exists  between  them  a 
relation  of  agency  in  the  exercise  of  which  the  knowledge  would  be 
useful. 

We  find  no  ground  on  which,  consistently  with  established  rules,  the 
decree  beli.v  ■      mported,  and  it  must  be  reversed,  and  the  bill 

dismissed,     i  ■  i  sed  and  bill  dismissed. 


DAY  V.  WAMSLEY. 

(Supreme  Court  of  Judicature  of  Indiana,  1870.     33  Ind.   145.) 

Complaint  by  appellee  for  goods  sold  and  delivered  to  appellant. 
Deferfse  that  the  goods  were  sold  to  defendant's  wife,  from  whom  he 
was  separated.  To  show  that  plaintiff  had  notice  of  this,  a  deposition 
was  offered,  setting  forth  a  conversation  in  which  deponent  told  Atki- 
son,  later  a  clerk  of  plaintiff,  that  Day  and  wife  were  separated. 

Ray,  J.**     ♦     ♦     *     'pj^g  deposition  discloses  that  Atkison,  at  the 


**  Part  of  the  opinion  I.s  onjitted. 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  781 

date  of  the  purchase  of  the  goods  by  appellant's  wife,  was  salesman  in 
_appelleeY^ore  and  assiste_d_in  jhe  sale  of  part  of  the  goods  for  the 
_va]ue^  oTwhich  the  suit  was  brought.     The  conversation  spoken  of  by 
the  w^ness  occurred  a  few  months  before  the  date  of  the  sale.    It  does 
iiot_a££ear  that  Atkison  was  in  the  employ  of  the  appellee  at  the  date 
of  the  conversation,  and  therefore  notice  to  him  by  such  conversation 
would  not' be,  according  to  Judge  Story's  view,  constructive  notice  to 
liis  "subsequent  employer.     Story  on  Agency,  §  140.    There  are  authori- 
ties, however,  which  controvert  this  rule.     Story,  Eq.  Jurisp.  §  408, 
note  2.    But_the_  conversation  was  not  of  such  a  nature  as  would  nat-_^ 
urally  require  the  agent  to  communicate  it  to  his  principal,  if  he  were, 
actuaily'in  the  employ  of  the  appellee.     It  was  the  mere  idle  talk  of*^        /i 
I^arties  having  no  interest  in  the  subject  di-cussed,  and  m.t  likely  to  :  / 

make  any  impression  on  the  mind  of  the  agent.     The  notice  to  the  V    y-(^  kL^f^ 
agentTlcToperate  as  constructive  notice  to  the  principal,  must  be  sucli  y  7 

~as  wouldlreasonably  charge  the  agent,  on  failure  to  repeat,  with  breach  f 


oTTaitii  anTduty  to  his  employer,*  =  and  therefore  the  law  will,  under 
"such  circumstances  only,  presume  he  has  communicated  his  kiiowlc'lgc 
"toTiis  principal.  Story  on  Agency,  §  140,  and  authorities  cited.  The 
rule,  indeed,  is,  that  the  special  circumstances  of  each  case  must  con- 
trol the  admission  or  rejection  of  the  evidence.     Story,  Eq.  Jurisp., 

supra. 

The  court  committed  no  error  in  excluding  the  evidence.    Judgment 
affirmed,  with  10  per  cent,  damages  and  costs. 


II.  TiMK  OF  Rkckivixg  NoTica 
WORSLEY  v.  EARL  OF  SCARBOROUGH. 

(IliRh  Court  ».f  ("li:iiKery,  174(i.     .3  Atk.  :«)-'.  20  Eng.  Reprint,  1025.) 

HardwickR,  Ld.  Ch.*°  *  ♦  *  Thirdly,  No  case  has  gone  so 
far,  and  it  would  be  very  inconvenient,  if  where  money  is  secured 
ui)r)n  an  estate,  and  there  is  a  question  depending  in  this  court  upon 
the  right  of  or  about  that  money,  but  no  question  relating  to  the  es- 
tate, upon  u-hicli  it  is  secured,  hut  is  ^Jiolly  a  collateral  matter,  that  a 
purchaser  of  the  estate  pending  that  suit  should  he  alTccted  with  notice 
by  such  imj^lication  as  the  law  creates  l)y  the  pendency  of  a  sui  ^ 

«r.  A><  to  vimiii'  rumor  mikI  siisplrloii.  sec  Stniilc.v  v.  .^dnvalhy,  102  U.  S. 
2r..-,.  270.  10  .'^np.  (U.  THl.  40  L.  K«l.  OfM)  (1N!»0);  Slinfcr  v.  IMiniilx  Ins.  Co.,  r,n 
Wis.  :'.iii,  1(»  .\.  W.  .*;si  (1SM»;  Sjillfrlii-IO  V.  .Miiluiic  (C.  C.l  .*!r»  I'ctl.  \i^>,  1  li. 
K    A    ."..".  (l.s.s,S)      \h  in  Inforinalion  derived  tliroimli   IntercKtrd    parties,  and 

from'a  reliable  .sonne.  MnlliUen  v.  (Jraliain,  72  I'a.  4K4  (lS71t.     As  »tire  In 

the  newsj.ai.ers,  and  mere  nntorlety.  I'ap>  v.  llrast.  IM  111.  .'{7  (lKr.«5).  As  to 
nnli.T  ae.inirrd  iii<idetit:illy,  Sleiui.-ft  v.  I'm.  Fire  Ins.  Co.,  O.S  h.wa,  Orl.  L^ 
N.  W.   12  (ISSf!). 

*<•■  Part  of   llie  fipliijon  Is  omitted. 


( 


n/ 


y 


I'"  Tine  uelXt 


782  EKFKCTS  AM>  ( . iNsKQT'KXcrs  OF  THK  uelVtion       (Part  3 

Fourtlily,  It  is  settled,  that  nc^tice  to  an  agent  or  counsel  tclio  zvas 
cnif'loycd  ill  the  tiling  by  aiiotlwr  person^  or  in  another  business,  arid 
at  another  time,  is  no  notice  to  his  client,  who  employs  him  after- 
wards; and  it  would  be  very  mischievous  if  it  was  so,  for  the  man  of 
most  practice  and  greatest  eminence  would  then  be  the  most  danger- 
ous to  employ.*^ 


MOUNTFORD  v.  SCOTT. 

(High  Court  of  Chancery,  1S2:>.     1  Turner  &  K.  '21-1.  -24  Rev.  Rop.  55,  12  Eng. 
Ch.  274,  37  Eng.  Rep.  1105.) 

The  bill  prayed  that  defendants  either  pay  plaintiff  what  was  due 
him  for  building  certain  houses  on  property  leased  to  Scott,  and  by 
him  subleased  to  defendants  Blake,  who  afterwards  sold  them  to  de- 
fendant \\'arren  by  deed  poll,  or  that  they  might  be  decreed  to  as- 
sign to  plaintiff  all  their  interest  in  the  original  lease  to  Scott.  The 
underlease  and  deed  poll  were  prepared  by  the  same  solicitor,  and 
he  knew  that  the  original  lease  had  been  deposited  with  plaintiff  as 
security  for  advances  to  be  made  in  building  the  houses. 

Eldox.  Ld.  Ch.  I  am  clearly  of  opinion  tliat  there  is  in  this  case 
no  ground  for  determining  that  the  plaintiff  is  entitled  to  relief.  It 
is  true  that  it  is  established  that  a  deposit  of  deeds  is  to  be  taken  as 
a  fact  of  evidence  that  the  deposit  is  made  for  the  purpose  of  secur- 
ing money;  that  was  laid  down  by  Lord  Thurlow,  upon  the  notion 
that  the  deposit  could  be  made  for  no  other  purpose;  but  the  whole 
tenor  of  all  the  cases  is,  that  that  doctrine  is  not  to  be  carried  fur- 
ther. The  Vice  Chancellor  in  this  case  appears  to  have  proceeded 
upon  the  notion,  that  notice  to  a  man  in  one  transaction  is  not  to 
be  taken  as  notice  to  him  in  another  transaction ;  in  that  view  of 
the  case  it  might  fall  to  be  considered,  whether  one  transaction  might 
not  follow  so  close  upon  the  other,  as  to  render  it  impossible  to  give 
a  man  credit  for  having  forgotten  it.  I  should  be  unwilling  to  go  so 
far  as  to  say,  that  if  an  attorney  has  notice  of  a  transaction  in  the 
morning,  he  shall  be  held  in  a  court  of  equity  to  have  forgotten  it 
in  the  evening;  it  must  in  all  cases  depend  upon  the  circumstances. 

<7  Ld.  Ch.  Ilardwicko  reached  the  same  conclusion  in  Ayarrick  v.  Warrick 
3  Atk.  21il.  20  KuK.  Reji.  070  (1745),  and  in  the  leading  case  of  Le  Neve  v.  Le 
Neve,  3  Atk.  64(5,  20  Kng.  Rep.  1172  (1748). 

^  Many  r-a.ses  in  the  United  States  have  followed  this  rule.  See  Pepper  & 
i  o.  V.  George,  ;A  Ala.  100  (1874),  in  which  the  court  regards  the  rule  as  for 
the  conveniens,  of  lawyers  rather  than  in  conformity  to  truth.  Houseman 
V.  Glrard  .Mutual  Ass'n,  81  Pa.  25(;  (1870),  in  which  Justice  Sharswood  savs 
the  rule  i.s  not  grounded  on  the  fallibility  of  the  memorv  of  man,  but  on  tiie 
technical  ground  -'that  it  is  only  during  the  agency  that  the  agent  represents 
and  stands  n  the  shoes  of  the  principal,  that  notice  to  him  is  then  notice  to 
hl.s  principal.  Notice  to  him  twenty-four  hours  before  the  relation  coimnenced 
«•'•'",  !"'"'Vi'',  ^'''■"'  """^■''  twenty-f<.ur  hours  after  it  had  cea.-^ed  to  be. 
Tn"f-o  )'.;.  x."'","'^^!';-  "-  '"•  '^^'P.  358  (1890),  but  cf.  Snyder  v.  Partridge,  138 
III.  It.i,  29  N.  h.  S;A,  :i2  Am.  St.  Rep.  1.30  (1891) 


C1^6) 


LIABILITY    OF    PRIXCirAL    TO    THIRD    PERSON  783 


Supposing  that  when  Warner  took  this  assignment,  he  was  affected 
with  notice  of  what  was  known  to  Gyles  in  the  transaction  with 
Elake,  it  is  a  clear  fact  in  proof  in  this  cause  that  the  lease  was  not 
deposited  for  money  advanced  at  the  time ;  if  it  was  put  into  the 
hands  of  the  plaintiff  as  a  security  at  all,  it  must  have  been  for  an 
antecedent  debt ;  but  the  account  which  Gyles  gives  of  the  transac- 
tion is,  that  the  lease  was  carried  to  the  plaintiff,  not  for  the  purpose 
of  being  applied  as  a  security  for  money  already  advanced,  but  for 
the  purpose  of  obtaining  future  credit ;  I  apprehend  it  has  never  been 
held,  that  if  deeds  are  carried  to  a  man  for  the  purpose  of  obtaining 
credit  from  him,  he  has  a  lien  upon  them  for  what  is  due  to  him  in 
respect  of  moneys  theretofore  advanced.  Such  a  decision  would 
carry  the  doctrine  upon  mortgages  by  deposit  ofMeeds,  further  than 
it  has  ever  yet  been  carried.  This  decree  th^^^re  must  be  affirmed. 
Decree  affirmed.'*^ 


THE  DISTILLED  SPIRIT^. 

(Supreme  Court  of  the  United  States,  1^".    11  W&n.  35G,  20  L.  Ed.  167.) 

The  United  States  filed  an  information/for  the  forfeiture  of  278 
barrels  of  distilled  spirits  for  fraudulently  removing  them  from  a 
bonded  warehouse  without  paying  the  revenue  tax.  It  was  found 
that  Harrington,  who  claimed  124  barrels,  had  bought  through  one 
Boyden  as  his  agent.  Boyden  knew  of  the  fraud,  but  did  not  par- 
ticipate in  it.  Harrington  knew  nothing  of  it.  The  jury  found  against 
50  barrels  claimed  by  Harrington  and  all  claimed  by  Boyden. 

Bradley,  J."**  *  *  *  The  substance  of  the  third  instruction 
prayed  for  was,  that  if  the  spirits  were  removed  from  the  warehouse 
according  to  the  forms  of  law,  and  the  claimants  bought  them  with- 
out knowledge  of  the  fraud,  they  were  not  liable  to  forfeiture.  The 
court  charged  in  accordance  with  this  prayer  with  this  (|ualification. 
that  if  Boyden  bought  the  spirits  as  agent  for  Harrington,  and  was 
cognizant  of  the  fraud.  Harrington  would  be  bound  by  his  knowledge. 
The  claimants  insist  that  this  is  not  law. 

The  question  how  far  a  purchaser  is  affected  with  notice  of  prior 
Hens,  trusts,  or  frauds,  by  the  knowledge  of  his  agent  who  effects 
the  purchase,  is  one  that  has  been  nuich  mooted  in  England  and  this 
country.  That  ho  is  b(2und_and  affected  bx  siidi  knowlrdfje  iW  no- 
tice as' his  agent  r)l)tains  in  negotiating  the_partJculartra^l:^uctiau,  is 
"everywlici'  '■ '1      lUit  Lord   liardwicke  thought  that  the  rule 

♦  «Thl.s  rnso  afllnns.  tlioncli  on  n  (llfTcrcnt  khmiikI.  .T  M.idd.  .".I.  IS  Hov.  Hop. 
ISO.  .''•(;  Va\v..  Hep-  •*--  'isisi.  and  was  aiipr<>v«'<l  in  .Nixon  v.  Ilanillton.  '1  I»r. 
&  Vv  .'5(54  :V.yi  (1.s:;s),  in  \vlii<li  is  an  Interest int;  review  of  tin-  I'.nuiisli  caso.K, 
iinil  in  Il'arureaves  v.  Kotliwell.  1  K.-en.  Cli.  IT.I  (ls:;(;).  Sim.,  also.  iMesser  v. 
Nor\v..o(l.  17  V.  \\.  (N.  S.»  m\,  H>  .Tur.  (N.  S.t  s.-,l.  \\.\  L.  J.  C.  P.  4S,  11  L.  1. 
Hep.  (.\.  S.t  111.  VI  W.  H.  Kl.'iO.  llli  K.  C.  L.  4<W  (1S()4). 

«t)  I'lirt   of  tlie  opinion  Is  omitted. 


/? 


p 


I 


7St  r.FKKors  am>  conskqt'knoks  of  tiii:  kki-ation       (Part  3 

coukl  not  be  cxtciulcil  so  far  as  lo  affect  tlie  principal  by  knowledge 
of  the  agent  actiuired  previously  in  a  different  transaction.  Warrick 
V.  WarHck,  3  Atkyns,  291.  Supposing  it  to  be  clear,  that  the  agent 
still  retained  the  knowledge  so  formerly  acquired,  it  was  certainly 
making  a  very  nice  and  thin  distincticui.  Lord  Eldon  did  not  ap- 
prove of  it.  In  Mountford  v.  Scott,  1  Turner  &  Russell,  274,  he  says: 
"It  mav  fall  to  be  considered  whether  one  transaction  might  not 
follow  so  close  upon  the  other  as  to  render  it  impossible  to  give  a 
man  credit  for  having  forgotten  it.  I  should  be  unwilling  to  go  so 
far  as  to  say,  that  if  an  attorney  has  notice  of  a  transaction  in  the 
morning,  he  shall  be  held  in  a  court  of  equity  to  have  forgotten  it 
in  the  evening;  it  must  in  all  cases  depend  upon  the  circumstances." 
The  distinction  taken  by  Lord  Hardwicke  has  since  been  entirely  over- 
ruled bv  the  Court  of  Exchequer  Chamber  in  the  case  of  Dresser  v. 
Norwood,  17  Common  Bench,  N.  S.  466.  So  that  in  England  the 
doctrine  now  seems  to  be  established,  that  if  the  agent,  at  the  time  ,„ 
of  effecting  a  purchase,  has  knowledge  of  any  prior  lien,  trust,  or  ^ 
fraud,  affecting  the  property,  no  matter  when  he  acquired  such 
knowledge,  his  principal  is  affected  thereby.  If  he  acquire  the  knowl-  ^ 
edge  when  he  effects  the  purchase,  no  question' can  arise  as  in  liis 
having  it  at  that  time ;  if  he  acquired  it  previous  to  the  purchase,  the 
presumption  that  he  still  retains  it,  and  has  it  present  to  his  mind,  _ 


will  depend  on  the  lapse  of  time  and  other  circumstances.     Kno\vT^  ^ 
edge  communicated  to  the  principal  himself  he  is  bound  to  recollect,  , 

^  but  he  is  not  bound  by  knowledge  communicated  to  his  agent,  un|ess_ j 

it  is  present  to  the  agent's  mind  at  the  time  of  effecting  the  purchase. 

Clear  and  satisfactory  proof  that  it  was  so  present  seems  to  be  the 
«^ly   restriction  required  by   the   English  rule   as   now  understood. 
With  the  qualification  that  the  agent  is  at   liberty  to  communicate    , 
his  knowledge  to  his  principal,  it  appears  to  us  to  be  a  ""nnfl  YJf^^v 
of  the  subject.     The  general  rule  that  a  principal  is  bound  by  the 
knowledge  of  his  agent  is  based  on  the  principle  of  law,  that  it  is  the     ___^ 
agent's  duty  to  communicate  to  his  principal  the  knowledge  which 
he  has  respecting  the  subject-matter  of  negotiation,  and   the   pre- 
sumption that  he  will  perform  that  duty.    When  it  is  not  the  agent's 
duty  to  communicate  such  knowledge,  when  it  would  be  unlawful  for.^ 
him  to  do  so,  as,  for  example,  when  it  has  been  acquired  confidential-  ___^ 
ly  as  attorney  for  a  former  client  in  a  prior  transaction,  the  rcas(m 
of  the  rule  ceases,  and  in  such  a  case  an  agent  would  not  be   ex-        _, 
"  pected  to  do  that  which  would  involve  the  betrayal  of  professional       ^ 
"jcbnfidence,  and  his  principal  ought  not  to  be  bound  by  his  ag-ent  s 
^ecret  and  confidential  information.     This  often  happened  in  the  case 
of  large  estates  in  England,  where  men  of  great  professional  emi- 
nence were  frequently  consulted.     They  thus  became  possessed,  in 
a  confidential  manner,  of  secret  trusts  or  other  defects  of  title,  which 
they  could  not  honorably,  if  they  could  legally,  communicate  to  sub- 
sequent clients.    This  difficulty  presented  itself  to  Lord  Hardwicke's 


Ch.  5)  LIABILITY    OF    PRINCIPAL    TO    THIRD    PERSON  785 

mind,  and  undoubtedly  lay  at  the  bottom  of  the  distinction  which  he 
established.  Had  he  confined  it  to  such  cases,  it  would  have  been 
entirely  unexceptionable. 

The  general  tendency  of  decisions  in  this  country  has  been  to 
adopt  the  distinction  of  Lord  Hardwicke,  but  it  has  several  times 
been  held,  in  consonance  with  Lord  Eldon's  suggestion,  that  if  the 


agent  acquired  his  information  so  recently  as  to  make  it  incredible 
that  he  should  have  forgotten  it,  his  principal  will  l»c  boundl  This 
is ^eally  an  abandonment  oFthe  principle  on  which  the  distmction  Is" 
_  foundeH^  Story  oiT  Agency,  §  140;  Hovey  v.  Blanchard,  13  N.  H". 
1?5';  Patten  v.  Insurance  Co.,  40  N.  H.  375 ;  Hart  v.  Farmers'  & 
Mechanics'  Bank,  S3  Vt.  252.  The  case  of  Hart  v.  Farmers'  &  Me- 
chanics' Bank,  33  Vt.  252,  adopts  the  rule  established  by  the  case 
of  Dresser  v.  Norwood.  Other  cases,  as  that  of  Bank  of  United 
States  V.  Davis,  2  Hill,  452,  New  York  Central  Insurance  Co.  v. 
National  Protection  Co.,  20  Barb.  468,  adhere  to  the  more  rigid 
view.  [See  cases  collected  in  note  to  American  edition  of  17  Com- 
mon Bench,  N.  S.,  p.  482,  and  Mr.  Justice  Clifford's  opinion  in  the 
Circuit  Court  in  the  present  case.] 

On  the  whole,  however,  we  think  that  the  rule  as  finally  settled  by 
the  English  courts,  with  the  qualification  above  mentioned,  is  the 
true  one,  and  is  deduced  from  the  best  consideration  of  the  reasons 
on  which  it  is  founded.  Applying  it  to  the  case  in  hand,  we  think 
that  the  charge  was  substantially  correct.  The  fair  construction  of 
the  charge  is,  that  if  the  jury  believed  that  Boyden,  the  agent,  was 
cognizant  of  the  fraud  at  the  time  of  the  purchase,  Harrington,  the 
principal,  was  bound  by  this  knowledge.'"'  The  precise  words  were 
"that  if  Boyden  bought  the  spirits  as  agent  for  Harrington,  and 
Boyden  was  cognizant  of  the  fraud,  Harrington  would  be  bound  by 
his  knowledge."  The  plain  anrl  natural  sense  of  these  words,  and 
that  in  which  the  jury  would  understand  them,  we  think,  is  that  they 
refer  to  l!o\(lcn'.s  know  k<ii;c  at  the  lime  of  making  the  purchase. 
Thus  construed  the  charge  is  strictly  in  accordance  with  the  law  as 
above  cxi)]ained.  There  was  no  pretence  that  Boyden  accjuirod  his 
knowledge   in  a    fiduciary  character.     *     *     *     Judgment   atlirmed. 

60  Accord:  Constant  v.  Univ.  of  K.Klif'stcr.  Ill  N.  Y.  Coi.  11)  N.  K.  <i;!l.  '2 
L.  R.  A.  7.^4,  7  Am.  St.  Rop.  im  (ISS!)).  a  Icadln),'  ease;  Snyder  v.  I'mpI  ild«(«. 
].'{«  FIl.  17.*{.  29  N.  E.  sni,  ;52  Am.  St.  Rop.  ].''.0  (1S!>1);  Scliwind  v.  Roycc,  S)4 
Md.  .-)]0,  .-.1    Atl.  45  (inO'J). 

Tlu-rc  nnist  bo  doar  and  satisfactory  proof  of  t)ic  prpscnce  In  the  airont's 
mind  of  the  antecedent  luiowledKe.  K<inital)le  Senirltles  Co.  v.  Slioppard.  7S 
Miss.  217,  28  Soutli.  842  (I'.XHO,  in  \vhl<li  llu!  Incident  was  six  yenrH  old;  Stcn- 
nett   V.  Pa.  Fin;  Ins.  Co..  (!8  Iowa,  <J74,  2S  .N.  \V.   12  (ISSCi. 

Tlie  tendency  is  to  keep  tJds  extension  of  the  rule  within  narrow  liniilH. 
Witterhr<jcl<  v.  Parker,  102  Cal.  m,  'Ad  Pac.  .'{74.  24  U  R.  A.  1!»7.  41  Am.  St. 
Rep.  172  (1891):  Trentor  v.  Potlien.  4(!  Minn.  21»S.  49  N.  W.  129,  24  Am.  St. 
Rep.  22.")  (1S91I.  Tlie  law  d<»es  not  presume  thai  what  Is  evt-r  known  will 
always  he  pres<'nt  in  the  memory.  KautTnian  v.  Robey,  (K)  Tex.  ."'.OS,  48  Am. 
Rep.  204  (INS.;). 

Goni).pR.&  A.— no 


786  ErFi:«"Ts  and  (.'oNsixirKNCKS  of  tiik  uklation       (Part  3 

FAIRFIELD  SAMXOS  P.ANK  v.  CHASE. 

(Supreme  Judicial  Court  of  Maiue,  ISSl.  72  Me.  212G,  :'.;)  Am.  Hop-  319.) 

Wnt  of  entry  to  recover  possession  of  certain  land. 

riCTKKS,  J.  A  notice  to  a  bank  director  or  trustee,  or  knowledge 
obtained  by  him.  while  not  engajjjed  cither  ollicially  or  as  an  agent 
or  attorney  in  the  business  of  the  bank,  is  inoperative  as  a  notice 
to  the  bank.  If  otherwise,  corporations  would  incur  the  same  lia- 
bility for  the  unofficial  acts  of  directors  that  partnerships  do  for  the 
acts  of  partners;  and  corporate  business  would  be  subjected  often- 
times to  extraordinary  confusion  and  hazards.  Carry  the  proposition, 
that  notice  to  a  director  is  notice  to  the  bank,  to  its  logical  sequence, 
and  a  corporation  might  be  made  responsible  for  all  the  frauds  and 
all  the  negligences,  pertaining  to  its  business,  of  any  and  all  its  direc- 
tors not  officially  employed.  Any  one  director  would  have  as  much 
power  as  all  the  directors. 

A  single  trustee  or  director  has  no  power  to  act  for  the  institu- 
tion that  creates  his  office,  except  in  conjunction  with  others.  It  is 
the  board  of  directors  only  that  can  act.'^^  If  the  board  of  directors 
or  trustees  makes  a  director  or  any  person  its  officer  or  agent  to  act 
for  it,  then  such  officer  or  agent  has  the  same  power  to  act,  within  the 
authority  delegated  to  him,  that  the  board  itself  has.  His  authority 
is  in  such  case  the  authority  of  the  board.  Notice  to  such  officer 
or  agent  or  attorney,  who  is  at  the  time  acting  for  the  corporation 
in  the  matter  in  question,  and  within  the  range  of  his  authority  or 
supervision,  is  notice  to  the  corporation.  Abbott's  Trial  Ev.  45,  and 
cases  in  note;  Fulton  Bank  v.  Canal  Co.,  4  Paige,  127;  La  Farge 
Fire  Ins.  Co.  v.  Bell,  22  Barb.  54;  National  Bank  v..  Norton,  1  Hill 
(N.  Y.)  578;  Bank  of  U.  S.  v.  Davis,  2  Hill  (N.  Y.)  454;  North  River 
Bank  V.  Aymar,  3  Hill  (N.  Y.)  263;  Ins.  Co.  v.  Ins.  Co.,  10  Md.  517, 
69  Am.  Dec.  174;  Bank  v.  Payne,  25  Conn.  444,  68  Am.  Dec.  362; 
Farrell  Foundry  v.  Dart,  26  Conn.  376;  Smith  v.  South  Royalton 
Bank.  32  Vt.  341,  76  Am.  Dec.  179;  Washington  Bank  v.  Lewis,  22 
Pick.  24;  Commercial  Bank  v.  Cunningham,  24  Pick.  270,  35  Am. 
Dec.  322;  Housatonic  Bank  v.  Martin,  1  Mete.  (Mass.)  308;  1  Pars. 
Con.  *77;  Story,  Agen.  §  140;  South.  Law  Rev.  N.  S.  vol.  6,  p.  45; 
Hoover  v.  Wise,  91  U.  S.  308,  23  L.  Ed.  392. 

Another  question  arises  in  the  case  before  us.  It  appears  that 
Brown's  knowledge  of  a  previous  conveyance  was  acquired  anterior 
to  his  employment  by  the  bank,  if  employed  by  the  bank  at  all,  and 
not  during  or  in  the  course  of  his  employment  on  their  account.    The 

51  As  to  the  knowledge  of  directors  of  a  corporation,  see  First  Nat.  Bank 
V.  Cliri.stopher,  40  N.  J.  Law,  4.'i.j,  29  Am.  Rep.  2G2  (1878).  While  engajied  in 
the  Mislness  of  the  corporation,  see  City  Bank  v.  Phillips,  22  Mo.  85,  G4  Am. 
Dec.  254  (1855);  Innerarity  v.  Merchants'  Nat.  Bank,  1.39  Mass.  3.32,  1  N. 
E.  282.  52  Am.  Rep.  710  (1885) ;  First  Nat.  Bank  v.  Blake  (C.  C.)  60  Fed.  78 
(1894j. 


Ch.  5)  LIABILITY    OP    PRINCIPAL    TO    TniPvD    PERSON  7S7 

question  is.  whether  a  principal  is  bound  by  knowledge  or  notice  which 
his  agent  had  previous  to  his  employment  in  the  service  of  the  prin- 
cipal. 

Upon  this  question  the  authorities  disagree.  The  negative  of  the 
question  has  been  uniformly  maintained  in  Pennsylvania. "'and  some 
other  of  the  states.  In  the  late  case  of  Houseman  y.  Building  As- 
sociation, 81  Pa.  256,  it  was  said,  that  "notice  to^rih  agent  twenty- 
four  hours  before  the  relation  commenced  is  nor  more  notice  than 
twenty-four  hours  after  it  has  ceased  would  be./  But  we  think,  all 
things  considered,  the  safer  and  better  rule  to_b|  that  the  knowledge 
pf  qn  ngent.  obtained  prior  to  his  emplovment  as  agent,  will  be  an 


implied  or  imputed  notice  to  the  principal,  under  certain  limitations 
~  ancT  coiiditions,  wliTdi  are' flieseT  The  knowledge  must  be  present' 
to  the  mind  of  the  agent  when  acting  for  the  principal,  so  fully  in 
his  mind  that  it  could  not  have  been  at  the  time  forgotten  by  him ; 
the  knowledge  or  notice  must  be  of  a  matter  so  material  to  the  trans- 
action as  to  make  it  the  agent's  duty  to  communicate  the  fact  to  his 
principal ;  and  the  agent  must  himself  have  no  personal  interest  in 
the  niatter  which  would  lead  him  to  conceal  his  knowledge  from  his 
principal,  but  must  be  at  liberty  to  communicate  it.  Additional  modi- 
'~'fication  might  be  required  in  some  cases. 

i'hese  elements  appearing,  it  seems  just  to  say  that  a  previous 
notice  to  an  agent  is  present  notice  to  the  principal.  The  presumption, 
that  an  agent  will  do  what  it  is  his  right  and  duty  to  do,  having  no  /  / 
personal  motive  or  interest  to  do  the  contrary,  is  so  strong  that  the  } 
law  does  not  allow  it  to  be  denied.  There  may  be  instances  where  l 
the  rule  operates  harshly;  but,  under  the  rule  reversed,  many  frauds  I 
could  be  easily  perpetrated.  Of  course,  the  knowledge  must  be  that 
of  a  person  who  is  executing  some  agency,  and  not  acting  merely  in 
some~nTimsterial  capacity,  as  servant  or  clerk.  For  Instance;  If  in 
~tHe  present  case  Brown  had  merely  taken  the  acknowledgment  of 
the  deed  to  the  bank,  or  had  transcribed  the  deed  as  a  clerk  or  copyist, 
such  acts  would  not  have  imiJoscd  a  duty  to  imjjart  his  knowledge  to 
the  bank.  But  if  cmi)loyed  to  obtain  the  title  for  the  bank  by  a  deed 
to  be  drawn  by  him  for  the  purpose,  that  would  place  the  transac- 
tion within  the  rule.  Jones  Mort.  (2(1  Ed.)  §  587.  Notice  of  the 
existence  of  an  unrecorded  mortgage  upon  the  property  to  an  ofliccr 
employed  to  make  an  attachment,  is  notice  to  the  plaintilT.  Tucker 
V.  Tilton,  55  N.  H.  223.  In  the  case  before  us,  Brown,  it  is  claimed 
by  the  defendant  was  employed  by  the  bank  to  make  an  instrument 
to  convey  a  title  frf)m  a  person  to  the  bank.  Brown  knew  that  <uch 
person  had  not  the  title.  It  would  be  his  duly  to  so  inform  his  client. 
He  would  be  likely  to  do  so.  lie  had  no  motive  not  to  do  it.  The 
law  conclusively  presumes  that  he  did  ir.form  him.  Wc  think  such 
a  cane  comes  reasonablv  within  tiie  rule,  though  it  is  not  so  marked 
a  case  as  it  would  bi-  if    I'.rown  had  been  employed  by  the  b.ink  ti) 


/ 


7SS  rrFECTS  and  conskquences  of  the  uelation       (Part  3 

asLcrtain  if  tlic  grantor  had  the  title,  and  if   he  had  then  to  make 
ihc  deed. 

The  general  rule  or  principle  touching  this  case,  guarded  by  the 
cautions  and  conditions  stated,  is  supported  by  the  later  English  cases, 
although  the  earlier  English  cases  went  the  other  way;  is  also  the 
law  of  the  United  States  Supreme  Court;  and  is,  we  think,  sustained 
by  a  preponderance  of  opinion  in  the  state  courts  where  the  ques- 
tion has  been  discussed.  Fuller  v.  Bennett,  2  Hare,  394;  Dresser 
V.  Norwood,  17  C.  B.  (N.  S.)  466;  RoUand  v.  Hart,  L.  R.  6  Ch.  App. 
687:  The  Distilled  Spirits,  11  Wall.  356,  20  L.  Ed.  167;  Hovey  v. 
Blanchard.  13  N.  H.  148;  Hart  v.  Bank,  33  Vt.  252;  Suit  v.  Wood- 
hall.  113  Mass.  391;  National  Bank  v.  Cushman,  121  Mass.  490; 
Anketel  v.  Converse,  17  Ohio  St.  11,  91  Am.  Dec.  115;  Hoppock 
V.  Johnson,  14  Wis.  303 ;  Lawrence  v.  Tucker,  7  Me.  (7  Greenl.)  195 ; 
Jones  Mort.  (2d  Ed.)  §  584,  and  following  sections  and  notes.  Many 
other  cases,  on  both  sides  the  questions,  will  be  found  cited  and  re- 
viewed, in  a  learned  article  in  the  Amer.  Law  Reg.  (Phila.)  New  Se- 
\  ries,  vol.  16,  p.  1. 

An  application  of  this  rule  to  the  facts  of  this  case,  requires  the 
verdict  to  be  set  aside.  S.  S.  Brown,  while  a  trustee  of  the  Fairfield 
Savings  Bank,  had  actual  knowledge  that  John  W.  Chase  had  deeded 
certain  land  to  Isaac  Chase.  Knowing  that  fact,  he  as  an  attorney 
wrote  and  took  the  acknowledgment  of  a  mortgage  of  the  same  land 
from  John  W.  Chase  to  the  bank,  and  the  mortgage  was  recorded 
first.  The  question  was  whether  the  bank  had  knowledge  of  the 
prior  deed  when  the  mortgage  was  taken.  The  pro  forma  ruling  that 
the  knowledge  of  Brown  was  sufficient  notice  to  the  bank  to  over- 
come the  legal  effect  of  the  fact  that  the  mortgage  was  recorded  be- 
'  fore  the  deed,  irrespective  of  the  further  question  whether  Brown  was 

/  at  the  time  of  making  the  mortgage,  acting  as  an  attorney  in  the  busi- 

'  ness  and  employment  of  the  bank  or  not,  was  erroneous.     It  is  con- 

tended that  the  evidence  shows  that  Brown  was  acting  for  the  bank. 
But  the  fact  being  at  least  questionable,  it  should  have  been  passed 
upon  by  the  jury. 
Exceptions  sustained. 


III.  Exceptions  to  the  Rule  op  NoTicB 
PURSLEY  v.  STAHLEY. 

(Supreme  Court  of  Georgia,  1905.    122  Ga.  362,  50  S.  E.  1.39.) 

Mrs.  Stahley  sued  Mrs.  Pursley  on  certain  notes  which  she  had 
signed  at  the  request  of  Green  &  Preston,  attorneys  of  plaintiff.  She 
owed  them  $50,  and  supposed  she  was  signing  them  as  security  for 
that  debt.  She  could  read,  but  was  ignorant  of  business  matters  and 
did  not  know  what  she  was  signing.    Judgment  on  the  notes. 


Ch.  5)  LIABILITY    OF    PRINCIPAL   TO    THIRD    PERSON  789 

Lamar,  J.  [After  stating  the  facts:]  The  principal  is  bound  by 
notice  to  his  agent  for  the  same  reason  and  to  the  same  extent  that 
he  is  bound  by  the  act  of  his  agent.     In  both  cases  it  must  be  lim- 

"Tlted  to  matters  within  the  scope  of  the""agency:7"'-Notice  as  to  such 
matters  binds  the  principal,  according  to  some  authorities,  on  the  the- 
ory that  the  agent  and  principal  are  to  be  regarded  as  one;  according 

"^  others,  on  the  theory  that  the  agent  may  and  should  act  for  his 
principal  on  such  information ;  and,  according  to  others,  because 
"tKere  is  a  presumption  that  such  notice  would  be  communicated.    See 

"Morris  v.  Georgia  Loan  Co.,  109  Ga.  24,  34  S.  E.  378,  46  L.  R.  A. 
506;    Civ.  Code  1895,  §§  3027,  3028.     But  when  the  agent  departs 

_fronithe  scope  of_the_agencXi_and  begins  to.  act  for  himself,  and 

,  not  for  the  principal;  when  his  private  interest  is  allowed  to  out- 
weigh his  duty  as  a  representative;    when  to  communicate  the  infor- 

^  mation  would  prevent  the  accomplishment  of  his  fraudulent  scheme — 
he  becomes  an  ojjposite  party,  not  an  agent.     The  reason  for  the  rule 

then  ceases.     Where,  therefore,  the  agent,  who  is  an  intermediary,  is 

guilty  of  an  independent  fraud  for  his  own  benefit,  the  law  does  not 
impute  to  the  principal  notice  of  such  fraud.  Instead  of  being  com- 
municated, it  would  be  purposely  and  fraudulently  concealed.  In- 
stead of  the  lender  being  bound  by  constructive  notice,  the  borrower 
must  be  bound  by  her  actual  signature  to  the  note  for  $500. 

2.  Both  parties  may  be  innocent.  The  defendant,  however,  put  it 
in  the  power  of  a  third  person  to  do  the  wrong,  and  she  must  bear 
the  loss.  She  was  endeavoring  to  arrange  to  borrow  money  to  pay 
her  own  debt.  She  allowed  the  creditor  to  prepare  the  paper.  He 
represented  the  borrower  as  much  as  he  did  the  lender.  Notice  of 
the  fraud  could  have  been  as  logically  imputed  to  one  as  to  the  other. 
In  law,  he  was  the  agent  of  neither,  but  drew  the  note  for  the  ex- 
cessive amount  for  his  own  personal  advantage,  and  in  the  commis- 
sion of  an  independent  fraud. '^^    Merchants'  Bank  v.  Dcmerc,  92  Ga. 

6  2  Accord:  Frcnkel  v.  Ilud.son,  SU'  Ala.  158,  2  South.  THS,  00  Am.  Uej).  7.'{U 
(ISSG),  in  which  tlic  rule  was  !ii)i»lli'd  to  kiiowk'dKo  by  a  < oriponuloii  «tf  facts 
known  by  the  iiresidciit  wlio  was  a<ilii;;  in  liis  own  intcitsi.  Coin.  Hank  v. 
liur^wvii,  110  N.  ('.  L'<>7,  14  S.  10.  (i'SA,  17  L.  U.  A.  :i'2(\  (IMHi);  Iniicrarlty  V. 
Menliiiiits'  Nat.  I'.:ink,  i:j9  Mass.  ;{:',L'.  1  N.  K  L'vj,  r,L'  Am.  Rep.  710  (iSS5). 
a  h'adiiif,'  case:  <iuiistcr  v.  S<  ranlon  Illuminating'  Ilcnt  ^:  Tower  Co.,  ISl  I'a. 
327,  :',7  Atl.  nnO,  r.O  Am.  St.  I{»'l».  (;r)0  (1SS)7),  continuing  a  valuable  review  of 
the  cases,  and  rrltblsinu'  I'"lrsl   .Nat.  Hank  v.  New  Mllford.  'M\  Conn.  O.'J  (ISCiJ)). 

When  tlie  ai^mt  abau<l(»ns  the  object  of  his  a^t-my,  and  a(  Is  for  lilms«'If.  It 
has  been  liebl  he  Is  outside  the  scope  of  his  authority,  ami  tc»  that  exieni 
censes  to  be  aucnt.  Henry  v.  Allen,  ir»l  N.  Y.  1.  4r>  N.  i;.  .'{.'.".  :?<»  L.  II.  A.  (ir.s 
(1890).  reversing  77  Hun,  40.  2S  N.  Y.  Supp.  242  (ISOII,  and  followed  In  Hlc- 
nentok  v.  Anuuidown,  \:>:>  N.  Y.  47,  40  N.  K.  :{21  (JSOSi;  Allm  v.  So.  Hoslon, 
R.  Co.,  ino  Mass.  200.  22  N.  K.  017.  r.  I..  K.  A.  710.  1.'  Am.  St.  Keji.  IS.'*.  (iss!>): 
Knol)elock  V.  Cicrmauia  Sav.  Hank.  r,()  S.  C.  2.'.0.  27  S.  K.  0013  nMlCi;  I>e  Kay 
V.  Haekeus.'ifk  Water  Co.,  ."'.S  N.  .F.  i:<|.  l-"'"^  (l^'^h.  followed  in  Camden  Safe  Djv 
posit  &  Trust  Co.  V.  Lord.  r,7  N.  J.  lOq.  480.  .''.S  Atl.  007  (1004);  Hank  of  Over- 
ton V.  Thomrison.  lis  Ted.  70s.  r,C,  C.  C.  A.  r(.')4  (1002).  The  exception  extends 
to  eases  in  whOh  the  au'ent  aeipilred  his  kuowledu'e  In  confidential  relatlonn 
80  that  he  is  not  at  lllterty  to  disclose  it.     Hummel  v.   Haidi  of  Monroe,  75 


y^ 


y 


790        EFFECTS  AND  CONSEQUENCES  OF  THE  RELATION    (Part  3 

739,  19  S.  E.  38;  Gunstcr  v.  Scranton  Co.,  181  Pa.  327,  Z7  Atl.  550, 
59  Am.  St.  Rep.  650;  Civ.  Code  1895,  §§  3028,  3940.  On  the  facts, 
the  case  is  clear.  The  defendant  could  read.  There  was  no  emer- 
gency. She  sii^jned  a  deed  and  twelve  notes.  Years  afterwards  she 
signed  six  additional  notes  relating  to  the  same  debt,  and  at  a  time 
when  it  was  not  alleged  that  the  agent  was  present. 

The  judgment  must  be  affirmed.     All  the  Justices  concurring. 

Iowa  t>S9  37  N.  W.  054  (ISSS) ;  Ilickinan  v.  Green,  12.''.  Mo.  10.1.  22  S.  W. 
-J.-..-..  27  y.  W.  440.  20  L.  R.  A.  39  (1804) ;  Kennedy  v.  Green,  3  My.  &  K.  G99, 
10  l^iii;.  Cb.  GOO,  40  Kng.  Rep.  2G0  (1S34).  And  to  cases  in  wliith  he  was 
reallv  a^ent  of  the  opposite  party.  .l']tna  Indemnity  Co.  v.  Schroeder,  12  N. 
D.  lio,  Or>  N.  W.  4oG  (1003).  And  to  cases  in  which  the  person  chiiuiing  tlie 
benetit  of  the  notice  colhules  with  the  anient  to  defraud  the  principal.  Cowan 
V.  Currau,  216  111.  59S,  617,  75  N.  E.  322  (1905). 


0  ^ 

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r 


Ch.  6)  LIABILITY  OF  THE  THIKD  PERSON  TO  THE  PEINCIPAL  791 

CHAPTER  VI 
LIABILITY  OF  THE  THIRD  PERSON  TO  THE  PRINCIPAL 


SECTION  1.— ON  THE  CONTRACT  MADE  BY  THE  AGENT 
I.  Disclosed  Prixcital 


/ 


FORD  V.  WILLIAMS. 

(Supreme  Court  of  the  United  States,  1S5S.     21  How.  2,S7.  IG  Tv.  Ed.  30.) 

Ford  sued  Williams  on  a  written  contract  by  which  the  latter  agreed 
to  receive  from  Bell  2,000  barrels  of  flour  at  $9  per  barrel. 

Mr.  Justice  GriER.  The  single  question  presented  for  our  decision 
in  this  case  is,  whether  the  principal  can  maintain  an  action  on  a 
written  contract  made  by  his  agent  in  his  own  name,  without  disclos- 
ing the  name  of  the  principal. 

It  is  not  necessary  to  the  validity  of  a  contract,  under  the  statute 
of  frauds,  that  the  writing  disclose  the  principal.  In  the  brief  mem- 
oranda of  these  contracts  usually  made  by  brokers  and  factors,  it  is 
seldom  done.  If  a  party  is  informed  that  the  person  with  whom  he 
is  dealing  is;  merely  the  agent  for  another,  and  prefers  to  deal  with 
the  agent  personally  on  his  own  credit,  he  will  not  be  allowed  after- 
wards to  charge  the  principal ;  but  when  he  deals  with  the  agent, 
without  any  disclosure  of  the  fact  of  his  agency,  he  may  elect  to 
treat  the  after-discovered  principal  as  the  person  with  whom  he  con- 
tracted. 

The  contract  of  the  agent  is  the  contract  of  the  principal,  and  lie 
may  sue  or  be  sued  thereon,  though  not  named  therein;  and  notwith- 
standing the  rule  of  law  that  an  agreement  reduced  to  writing  may  not 
be  contradicted  or  varied  by  jjarol,  it  is  well  settled  that  the  principal 
may  show  that  the  agent  who  made  the  contract  in  his  own  name  was 
acting  for  him.  This  proof  does  not  contradict  the  writing;  it  only 
explains  the  transaction.  But  the  agent,  who  binds  hiniself^  will  nui 
be  allowed  to  contradict  the  writing  by  j)r()ving  tTvat  be  wa*^  mnfr.-c  t 
"    ffrg  ont}' as  niC^t,  while  tht  iMm:.  .    will  !,<■  .: ':i  ■  • 

the  principal.     "Such   cvidc:..^    \  ..y.^    llaiun    Paikc! 
nTatJtTTe  contract  bnuls  those  Wliom  on  its  face  it  ji 
"TmT  shows  tbaf  if'also  binds  another,  by  reas()ij_JTiai  ujc  aci  qi   iiir 
agent  is  the  act  of  the  principal."     (See  Higgins  v.  Senior,  9  Mecson 
and  AVirstJV,  H43.) 


F 


792        EFFECTS  AND  CONSKQUKNCKS  OF  THE  RELATION    (Part  3 

The  array  of  cases  and  treatises  cited  by  the  pk\intilT's  counsel  shows 
conchisively  that  this  question  is  settled,  not  only  by  the  courts  of 
England  and  many  of  the  States,  but  by  this  court.  (See  New  Jersey 
Steam  Navigation  Co.  v.  Merchants'  Bank,  6  How.  381,  12  L.  Ed. 
465,  et  cas.  ib.  cit.)  ^ 

The  judgment  of  the  court  below  is  therefore  reversedj_and  a  \eiure 
dc  novo  awarded. 


r 


ijA^ 


BEEBEE  V.  ROBERT. 

(Supreme  Court  of  Judicature  of  New  York,  1S34.    12  Wend.  413, 
27  Am.  Dec.  132.) 

Assumpsit  for  breach  of  warranty  in  the  sale  of  cotton  by  sample. 
jrfie  cotton'was  bought  by  Woolley,  a  broker,  in  his  own  name  on  the 
order  of  plaintiff. 
/  Sutherland,  J.^     The  suit  was  properly  brought  in  the  name  of 

the  present  plaintiffs.  Woolley  acted  as  their  factor  or  agent  merely, 
in  the  purchase  of  the  cotton ;  he  had  no  interest  in  the  transaction  be- 
yond his  commissions;  he  is  not  responsible  to  the  plaintiffs  for  the 
defect  in  the  quality  of  the  cotton ;  he  has  suffered  no  injury,  and 
"no  action  could  be  sustained  in  his  name  against  the  defendant  for 
the  breach  of  the  implied  warranty — there  was  no  express  contract  or 
agfeeme'nt  with  him.  If  Woolley,  the  factor,  had  failed  to  pay  for 
the  cotton.  Robert  could  have  recovered  its  value  from  the  plaintiffs. 
When  goods  are  brought  by  a  broker  or  other  agent,  and  he  does  not 
disclose  his  principal  at  the  time,  the  principal,  when  discovered,  is 
Hable  on  the  contracts  which  his  agent  has  made  for  him.  2  Liver- 
more~on  Agency,  200.  Waring  v.  Faverick,  1  Campb.  85 ;  Kymer  v. 
Suwercropp,  Id.  109 ;  4  Taunt.  576,  n.  a. ;  Pentz  v.  Stanton,  10  Wend. 
271,  25  Am.  Dec.  558. 

Where  the  principal  is  disclosed  at  the  time  of  the  purchase,  it  theri 
becomes  a  question  of  fact,  to  be'^'termined   from  all  the  circum-., 
stances  in  the  case,  whether  the  vendor  relied  exclusively  upon  the 
credit  of  the  agent  or  not.     If  he  did,  he  cannot  afterwards  resort - 
;r.  the  principal.    2  Liver.  200r201.    15  East,  62.     4  Taunt.  574.     If 
ihc,plaintiffs  might  have  been  made  responsible  to  the  defendant  for 
the  purchase  money  upon  this  contract,  it  would  seem  to  follow  that 
^T^ere  is  sufticient  privity  of  contract  between  them,  to  enable  the  plai,n;;;__ 
tlffTto  maintain  this  action  against  him  for  the  alleged  violation  pL 
hi^s  part  of  the  agreement.    The  general  rule  is,  that  theaction  should 
be  brought  in  the  name  of  the  party  whose  legarintefest  has  been  af- 


1  Arcord:  Powell  v.  Wiide,  109  Ala.  95,  19  South.  500,  55  Am.  St.  Rep.  915 
(1S9.'>),  holdinj,'  that  the  burden  of  proof  to  show  the  agency  lies  on  the  prin- 
« ipal  in  sufli  f-a.sos:  Kln^sley  v.  Sichrecht,  92  Me.  23,  42  Atl.  249,  09  Am.  St. 
Rep.  4S0  (1M»'-.|.  containing,'  a  valuable  review  of  the  cases,  especially  as  to 
contracts  within  the  Statute  of  Brands. 

2  Part  of  the  opinion  is  omitted. 


Ch.  6)  LIABILITY  OF  THE  THIRD  PERSON  TO  THE  PRINCIPAL  793 

fected,  against  the  party  who^conmkt^djthe  jnjury^__  1  Chitty's  PI.  1. 
"TTammohd  on  Parties  to  Action,  3.  ^TBos.  &  Pull.  101,  n.  c'.  3  Bos. 
&  Pull.  149,  and  note.  Dawes  v.  Peck,  8  T.  R.  330.  Gunn  v.  Can- 
tine,  10  Johns.  387.  Yates  v.  Foote,  12  Johns.  1.  In  Spencer  v.  Field-, 
10  \Vend.  87,  and  Sailly  v.  Cleveland  &  Hutton,  10  Wend.  156,  the 
question  as  to  the  proper  parties  to  an  action  was  discussed  at  length, 
and  most  of  the  authorities  were  there  referred  to.  Those  cases 
clearly  show  that  this  action  is  properly  brought  in  the  names  of  the 
present  plaintiffs.  *  *  * 
New  trial  denied. 


HUMPHREY  V.  LUCAS. 
(Court  of  Queen's  Bench  at  Nisi  Prius.  1845.    2  Car.  &  K.  1.^2.  fil  E.  C.  L.  1.~2.^ 

Assumpsit  for  the  non-fulfillment  of  a  contract  by  the  defcndani, 
to  transfer  to  the  plaintiff  certain  shares  in  "The  Birmingham  and 
GToucester  Raihvav  Comjianv."     Plcn    nnn  ns^nmnsit. 
'         Ttre"  contr.-ict   was  ir.a 'r  >  in  tin-  >•  .  ,t   Liverpool,  by 

two  bTokcrs  who  were  members  of  tiuit  \ju<Ay.     The  plaintiff's  broker..,, 
did  tiordisclose  the  name  of  his  principal  at  the  time  the  contract  was 
rered  into.    'The  plaintiff  was   not   a   member  of  tli'  uq^qI 

EocTc^xchango.  but  he  was  cognizant  <>f  the  rules  tlici\''.. 

^atson,  for  tlu    <1'  fendant,   tendered   tlu^r    rules   in    evidence,  in 

order  to  shew  that  thev^'corftrbneff  tlie  contract  '  '  '    ' 

jhatT'as,  by  the  rules  of  the  Liverpool  Stock  Ex^        . 

Jn  question  was  a  contract  between  the  two  brokers  only,  tlir  lnil:.  i 

jiot  having  disclosed  his  princix^al,  the  latter  was  not  cntitlctl  t>i  sm. 

upon  suchjcontractj 

Ckksswell,  J.  They  are  not  admissible  as  evidence  for  any  siuli 
purpose.  I  take  the  law  to  be  clear7that  an  a;iciil  duly  authorized 
may  make  a  contract  in  his  own  name,  and  that  the  princiual  ma^  . 
afterwards  sue  upon  it.'  In  the  present  case,  the  plea  is  the  general 
Is^ITe ;  and  tTie  only  question  on  this  record  therefore  is,  whether 
the  plaintiff  marie  a  contract  with  the  defendant  or  n«>t.  T  think  he 
did.  The  rules  of  the  Liverpool  Stock  Exchange  cannot  alter  the 
generaf  law  of  the  land. 
Verdict  for  the  plaintiff. 

•  See  the  nuthf)rittos  rollected,   RussoU   on  Fnrtors,  24!^.  21B. 


?Ji  ErFKCTS   AND   CONSKgiENCKS   OF  THE    KELATION  (^i'art   3 


II.  UndisclosivD  Principai^ 
WOODRUFF  V.  McGEHEE. 

(Pupronie  Court  of  Georgia,  ISGO.     30  G.i.  158.) 

Action  for  damages  for  breach  of  warraiity  of  a  horse  made  to 
oneTTee,  plaintiff's  agent. 

^  STephe.xs,  J.  The  only__reason  assigned  for  the  rejection  of  this 
warranty  is  that"irTs~  made  tothc  agent,  the  i)rincipal  n-'i  being; 
known  in  the  transaction.  But  the  autlidritics  arc  express  iliat  the 
princijial  may  claim  all  his  rights,'  tliuu-h  not  at  lirsL  known,  just_a§. 
if  he  had  been  known,  with  the  single  limitation  that  ilir  ctluT 
party  shall  not  lose  any  right  which  he  would  have  against  tlu'  a-,  ni 
if  the  agent  were  principal  as  he  had  first  been  supposed  to  be.  S( . 
Story  on  Agency,  §  418.  The  reason  of  the  doctrine  is,  that  ii  i^ 
but  just  that  every  man  slicTuld  Have"  what  really,  though  secretly, 
belongs  to  him,  so  far  as  he  can  obtain  it  n'ithout  injuring  another^ 
by  appearing  in  his  true  character  of  owner.  We  think  the  action  is 
maintainable  in  the  name  of  the  before  unknown  principal,  and  that 
the  evidence  ought  to  have  been  admitted.*^ 

Judgment  reversed. 


WINCHESTER  v.  HOWARD. 

(Supreme  Judicial  Court  of  Mas.sacliusetts,  1807.     97  Mass.  303, 
93  Am.  Dec.  93.) 

Chapman,  J.    jrhe_j:Qurt^jTe_^£_opinionlhat-it_slio^^ 
left  to  the  jury  in  this  case  to  determine  whether  the  minds  of  the 
parties  really  met  upon  any  contract ;  and  if  so,  what  the  contract  was. 

It  is  true  that  an  agent  may  sell  the  property  of  his  principal  with-. 
out  disclosing  the  fact  that  he  acts  as  an  agent,  or  that  the  property 
is  riot  his  own;  and  the  principal  may  maintain  an  action  in  his 
own  name  to  recover  the  price.  If  the  purchaser  says  nothing  on^ 
the  subject,  he  i^  liable  to  the  unknown  prmcipal.  Huntington  v. 
Knox,  /  Cu-         "'       lUit  6ii"tTne~other  hand,  every  man  has  a  right ^ 

to  eject  whai  , .  he  will  deal  with.     As  was  remarked  by  Lord 

T^enman  in  Humble  v.  Hunter,  12  Q.  B.  311,  "You  have  a  right  to 
the  benefit  you  contemplate  from  the  character,  credit  and  substance 
of  the  person  with  whom  you  contract."     There  may  be  good  reasons 

♦  The  undisclosed  principal  may  be  a  stranger,  both  to  the  promise  and 
the  consideration.  Ilea  v.  Barker  (C.  C.)  135  Fed.  800  (1904).  lie  must,  how- 
over,  prove  that  he  is  the  real  principal.  Sims  v.  Bond,  5  B.  &  Aid.  389,  27 
E.  r.  I..  07  (]8:«i. 


Ch.  6)  LIABILITY  OF  THE  THIRD  PERSON  TO  THE  PRINCIPAL  795 

why  one  should  be  unwilling  to  buy  a  pair  of  oxen  that  had  been 
owned  or  used  or  were  claimed  by  a  particular  person,  or  whv  he 
should  be  unwilling  to  have  any  dealings  with  that  person ;  and  as  a 
man's  right  to  refuse  to  enter  into  a  contract  is  absolute,  he  is  not 
obliged  to  submit  the  validity  of  his  reasons  to  a  court  or  jury.'* 

In  this  case  it  appears  that  Smith,  the  plaintiffs'  agent,  told  the 
^efenclant  that  he  had  a  pair  of  oxen  for  sale,  (referring  to  the  oxen 

"~tn" question,)  and  that  another  pair  belonging  to  one  Blanchard  were 
m  nis  possession,  which  pair  He^was  aiithorized  to  sell.    A  jury  might 

'■"properly  find  that  this  amounted  to  a  representation  that  the  oxen 
in  question  were  his  own.  The  defeiidant  thenjrnade  inquiries ;  in 
answer  to  which  Smith  affirmed  trTaT  the~oxen  had  never  been  luirt;^ 
tliat  the  ])laintift's  had  no  mortgage  upon  them,  and  thai  llitic  was 
I'o  claim  ujmii  lliciii  Lxrci>t  the  claim  \vliicli  Smith  had.  A  jury  might 
properly  find  that  this  was,  in  substance,  a  representation  that  the  title 
to  the  oxen  was  exclusively  in  Smith ;  and  that,  as  the  defendant 
was  unwilling  to  deal  with  the  plaintiffs,  he  made  proper  inquiries  on 

_jlie  subject,  and  was  led  by  Smith  to  believe  he  was  not  dealing 
with  the  plaintiffs.  The^defendant  took  the  cattle  home  with  an  agree- 
nientjhat  he  might  return  them  "if  he  did  not  find  things  as  Smith 
ha3told  him."  In  the  course  of  the  evening  he  was  informed  that 
tne  cattle  belonged  to  the  plaintiffs,  and  being  unwilling  to  buy  oxen 
of  themThe  returned  them  to  Smith  the  next  morning  before  any  bill 
of  sale  had  been  made.    The  jury  would  be  authorized  to  find  that  he 

5  In  Arkansas  Vallp.v  Smelting  Co.  v.  r.clilfii  Co.,  IL'7  U.  S.  .'57'.),  S  Sup.  Ct. 
1308,  32  L.  Ed.  240  (l.SSS),  (iray,  J.,  puts  the  case  thus:  "Hut  every  one  has  a 
lifiht  to  select  and  determine  with  whom  he  will  contract,  and  cannot  have 
another  person  thrust  upon  him  without  his  consent.  In  the  familiar  jiliraso 
of  Lord  Denman,  'You  have  the  ritrht  to  the  benefit  .vou  anticipate  from  the 
character,  credit,  and  suhstance  of  the  part.v  with  whom  you  (•onlra<'t.'  Hum- 
ble V.  Hunter,  12  Q.  1'..  :;10,  .•JIT;  Wimhcster  v.  Howard".  It?  M.iss.  .".o;{.  .".O."., 
93  Am.  Dec.  9:5;  Ice  Co.  v.  Totter,  12:5  Mass.  2S,  2.1  Am.  Kc|i.  9:  Kiii;:  v.  Kat- 
ter.son,  13  K.  I.  117,  120.  43  Am.  K<'i»-  13;  Lansden  v.  ISIcCarthy,  4r»  .Mo.  IOC 
The  rule  upon  this  subject,  as  applicable  to  the  case  at  bar,  is  well  e.\pre.s.sed 
in  a  receid  KuKJish  treatise:  'KlKhts  arising  out  of  contract  cannot  be  trans- 
ferred if  they  are  coupled  with  liabilities,  or  If  they  involve  a  relation  of  per- 
sonal coiitiden'-e  su<h  that  the  party  wh<is«!  aurcement  conferred  (lid.se  rights 
must  liave  intended  tlicm  to  be  e.vercised  only  by  him  in  whom  he  actually 
<onfidcd.'  " 

The  exception  Is  applied  to  n  jmrely  executory  contract  In  Tancoast  v.  Dins- 
more.  10."»  Me.  471,  7.".  Atl.  4.'{,  134  Am.  St.  Uej'.  ■'"..si.'  (1!)(«)).  See,  also.  Cowan 
V.  Curran,  210  III.  r.its.  7.1  \.  K.  322  (190.-.).  Contra:  Kelly  v.  Thuey.  143  Mo. 
422,  4.1  S.  W.  .300  (1S9.S).  with  wbl<  h  <f.   Id..   1<»2  Mo.  .122.  1.1  S.  \V.  (52  (IS'.Kll. 

The  aljove  exception  has  no  application  in  ca.ses  where  it  dors  not  appear 
that  the  third  person  relb-d  on  the  learning,  skill,  and  knowle<l^e  or  reliability 
of  the  agent  of  the  undisclosed  j.rlnclpal,  and  where  no  personal  service  Is 
involved.  WIehle  v.  ."^alTord.  27  Ml.sc.  Hep.  .KJi;,  .is  N.  Y.  Supp.  29.S  (lS99i. 
-Nor  to  cases  where  the  primlpal  contra<ted  as  agent  an<l  now  sets  up  that 
he  was  the  rr-al  |»riiiclp;il,  anrl  tin*  (iKeiit  a  mere  man  of  straw.  Itbkerlon  v. 
Utirrell,  .1  .Manle  &  S.  :!s:!  (is  1(5). 

See  Moliiie  .Mallenble  Iron  Co.  V.  York  Iron  Co.,  .S.3  I'^-d.  (5(5,  27  C.  <'.  A.  4  12 
(1S97),  summarising  the  exceptions  to  the  rule. 


^  P^AAy 


\\jy 


V" 
TOG  TFIM'CTS  AND   rONSi:QrF.XrKS  Oir  TnR;%^LATION         (.Part   3 

\ 
returned  tlioin  williin  the  terms  of  the  coiKhtidii  upon  which  h<\  took 
thcni.  hccause  he  did  not  lind  things  as  Smith  had  told  him.    \It  is 
~"thus  apparent  that  upon  the  whole  evidence  tliey  would  be  justified  in  ^ 
""finding  a  verdict  for  the  defendant.  ^        j\      <         j  .  ijy- 

—    Exceptions  sustained.  ,,    V  J  fU  U'ii^^-^^^  ^ 

'     — -   Mi^^^j..       '"^ 

BARRY  V.  PAqi./J    V^ ,  -     4     . 

(Supreme  Judicial  Court  of  Massachusetts  j  1858.     10  Gray,  SOS.) 

Action  by  a  citizen  of  New  York  to  recover  the  price  of  ^goods, 
sold  bv  his  factors  in  Boston  to  the  defendants.     Verdict  for  plain-  ..^ 
liiT  and  defendant  alleged  exceptions. 

BiGELOVV,  J  8     *     *     *     2.  As  the  contract  of  an  agent  is  in  law 
the  contract  of  the  principal,  the  latter  may  come  forward  and  sue 
thereon,  although  at  the  time  the  contract  was  made  the  agent  acted 
"~as  and  appeared  to  be  the  principal.     There  is  a  qualification  of  the 
rule,  by  which  it  is  held  that  when  a  contract  has  been  made  for  an 
~~undrsclosed  principal," "who  permits  his  agent  to  act  as  apparent  piin-^,,^^ 
^cipal  in  the  transaction,  the  right  of  the  former  to  intervene  and 
Bring  suit  in  his  own  name  is  not  allowed  in  any  way  to  affect  or 
— impair  the  j;ight  of  the  other  contracting  party,  but  he  will  in  such , 
casel^e'let  in  to  all  the  equities,  set-ofifs  and  other  defences  to  which   _^ 

he  would  have  been  entitled,  if  the  action  had  been  brought  in  the 

name' of  the  agent.     But  in  the  case. at  bar  it  does  not  appear  that 

the::defendant_h€LS._.any"^fince  to  the  action,  which  he  could  have . 

made  if  it  had  been  brought  by  the  agent.     The  objection  is  purely 
^Technical,  and  goes  only  to  defeat  the  right  of  action  by  the  principal, 
irrespectively  of  any  meritorious  answer  to  the  suit. 

J[t  has  been  sometimes  said  that  when  a  sale  is  made  by  a  factor 
for  a  foreign  principal,  the  latter  cannot  sue  for  the  price.  This  sup- 
posed exception  has  been  put  on  the  ground  that  in  such  case  the  pre- 
sumption at  law  is,  that  exclusive  credit  was  given  to  the  agent,  and 
therefore  the  principal  cannot  be  treated  in  any  manner  whatever 
as  a  party  to  the  contract.  Bin  the  later  and  Ijcttcr  opinion  is,  that 
,1,,-^  •-  no  such  absolute  presumption,  and  that  a  principal,  whether 
or  dorhestic,  may  sue  to  recover  the  price  of  si^oods  sold  by 
his  faclorj  unless  it  is  made  affirmatively  to  appear  tliat  exclusive^ 
credit  wa'-  'ji\L-n  to  the  agent,  by  proof,  other  than  the  mere  fact  that 
•].'•  I  ri:  ided  in  another  state  or  country.     Story  on  Agency, 

§  420.J  J  .iicy  on  Agency  (4th  Amer.  Ed.)  324,  note.  Taintor  v. 
Prendergast,  3  Hill,  72,  38  Am.  Dec.  618.  Ilsley  v.  Merriam,  7  Cush. 
242,  54  Am.  Dec.  721,     No  fact  appears  in  the  exceptions  to  show     - 

•  Part  of  the  opinion  is  omitted. 


Ch.  6)  LIABILITY  OF  THE  THIRD  PERSON  TO  THE  PRINCIPAL  797 

_  anyexclusive  credit  by  which  to  take  the  present  case  out  of  the 
ordinary  rule  by  which  the  principal  can  maintaih  an  action  in  his 
own  namg." 


Exceptions  overruled. 


COPELAND  V.  TOUCHSTOXE. 


(Supreme  Court  of  Alabama,  1849.     16  Ala.  333,  50  Am.  Dec.  181.) 

Error  to  the  County  Court  of  Mobile. 

This  suit  was  commenced  in  a  Justice's  Court,  and  taken  by  ap- 
peal to  the   County  Court.     The  plaintiff  havi'i-  e?tahli^'— '  i---  de- 
mand the  defendant  proved  as' an  liY-  i  a:\  aco  lunt  i\.r  !o^ 
by  one  Richardson,  who  was  a  journey-man  whcclright  in  the  em-   _ 
— TTojTTrreht   of  defendant.     The   plaintiflf   in   rebuttal   proved  that   the    ^, 

contract' for  tfiV work  was  made  with  Richardson  alone,  that  plaintiff 
"^  was 'not  informed  that  he  was  in  the  employment  of  the  defendant, 
'aild  that  he  paid  said  Richardson  for  it  as  the  work  was  il'uv.     I  jHin 
"ThTs' state  of  facts,  the  cause  was  submitted  to  the  decision  of  Llie. 

court,  and  judgment  was  rendered  allowing  the  defendant's  offset. 
—     Tftfl>'  judgment  is  now  assigned  as  error. 

Chilton,  J.     It  certainly  cannot  be  assumed,  that  because  the 

work  was  done  at  the  shop  of  the  defendant,  he  is  entitled  to  recover 

""for  it.     Copeland  contracted  with  Richardson,  in  utter  ignorance  of    ^ 
— 'TTTen-eTation  which  existed  between  him  and  his  employer.  Touch- 
' — Sbtre:    Conceding,  then,  that  as  between  the  latter  and  Richardson, 
the  relation  of  principal  and  agent  obtained,  or  that  Richardson  wa.s    , 
in  the  employment  of  Touchstone,  who  was  entitled  to  all  his  earn-^ 
'-  Tngs,  it  is  too  well  settled  now  to  be  questioned,  that  if  Copeland  was      ^ 

7  Accord:  Drosser  v.  Norwood,  14  C.  B.  (N.  S.)  574.  588.  108  E.  C.  L.  574 
(1803)  in  which  tlie  third  person  was  allowed  to  sot  off  a  delit  due  him  from 
the  agent;  Traul.  v.  Milliken.  r,7  Me.  Cm^.  2  Am.  Rep.  14  (Isf.lM.  in  whldi  th.' 
third  person  had  paid  llie  agent;  Taintor  v.  I'rendergast,  .'{  Hill  (N.  ^  •»  7-. 
38  Am  Dec  CIS  (lS41i»;  Foster  v.  (Jrah.-im,  1(M5  Mass.  L'Ol!.  44  N.  K.  ll-'O  (ISiX.l. 
Ouotin"  with  approval  the  principal  case.  Sidlivan  v.  Sliailer.  70  Conn.  7.5.!. 
40  AtT  ior.4  (isosi.  wltli  a  valnahh'  review  of  cases:  HoUlold  v.  Nat.  Snppl.v 
Co    ISO  Pa.  189,  42  Atl.  l.'il.  69  Am.  St.  Uep.  709  (1S99). 

The  i)rincli)al  takes  such  a  contract  RuhJ.-l  to  all  rl;;h(s  of  (he  third  poi- 
son. Just  as  though  the  agent  were  the  i.rlncl|.al  ;■'"-'•'';'•,  ""i:'''''.',''  n,!/  i  , 
474.  SS  Am.  Dec  004  (ISC.",);  Kosser  v.  Darden.  81i  (la.  UIO.  7  Soutli.  910.  II 
Am'.   St.   Rep.   l.TJ  (ISSS). 

If  the  third  per.son  ought  to  know  he  Is  doalInK  with  nn  agent,  he  nni.st 
Ire  on  iiis  giiiinl  or  he  .•aiiiu.t  ehilm  a  set  olT  on  a  debt  due  from  tlie  agent. 
Miller  V.  Lea.  .35  .M.l.  :J9.!.  0  Am.  Reif.  417  (1S7-|;  i;r»''''f,.,^'- ^V;;'!!'''''"*"'"'  "^ 
Ark.  241,  95  S.  W.  4<H.  115  Mu.  St.  Rei*.  XI,  s  Ann    (as   5.,.'    lOUO) 

As  to  distinctions  between  foreign  and  domestic  prli.<li.als  see  OelrbKp 
V  iM.rd  L-:!  How.  49.  10  L.  ImI.  5.".4  (Is.V.n.  Certainly  the  various  states  of 
tile  Uni'ted  States  are  not  "foreign"  so  as  to  alTect  this  rule.         .,  .^,„„^,„ 

As  to  suit  by   agent  of  an   .indlsdosed   prin.-ipal  on  a   sealwl   Inst ru moil, 
see  Sehaefer  v.  Ilenkel.  75  N.  Y.  :57s.  57  Ib.w.  I'rar.  97  (1S7S)   7  Abb.  N.  (.     . 
ante.  p.  712.     Accord:    Lessee  of  Clarke  v.  ('(.urtney,  5  I'et.  .J19.  8  L.  Ld.  liu^ 
18:!1) ;    ante,  p.  45:5. 


7!)S  KFFKOTS   AN'n    COXSKQTKNl'KS   OF   'PlIK    UHT-ATION  (Part   3 

rant  of  lliis  fact — if  lie  nogotialcil  \vitlj_Rjchar(lson  as  the  prin-  , 
supposing-  liini  to  be  so,  ami  paid  him  for  the  work  l)efore  he  ^ 
hail  notice  of  any  claim  on  the  pari  of  Touchstone,  he  will  be  pro-^ 
ccted  in  such  payment. 
— JTTdp-c  Story,  in   his  work  on  Agency,  p.  4o0,  §  430,  says — "The 
modes  and  circumstances  under  which  such  paxnients  are  maife  to~L-. 
thejujcivt  may  have  a.  material  beariiTg.  on.  th.c  rights  of.  the  phacjpaL- 
Tf  thepayments  are  received  by  the  agent  according  to  the  ordinary 
rourse   of  busmess,  or  even  if_  they  are  made  out  of  the  ordinary. 
colirse  of  biisiness,  if  the  agent  alone  is  known  or  is  supposed  to  lie  llie,^ 
principal,  the  latter  will  be  bound  thereby.     Mr.  Pailey  lays  down  the 
same  cloctiMne.'    "If,"  says  he,  "the  agent  act  for  a  principal  undis-_ . 
closed,  he  has  auBiority*"to  receive~payment."    Until  the  princij^al  ap-  ^ 
pears,  the  agent  is  to  be  regarded  as  the  proprietor.— Li\^on~7rgency, 
226-232;  Faveric  v.  Bennett,  ITEast.  38;  Coates  v.  Lewis,  1  Camp. 
Rep.  444;    Blackburn  v.   Schoales,  2  Id.  341;    Stewart  v.  Aberdein, 
4  Mees.  &  Welsh.  211 ;  see,  also.  Governor  v.  Daily,  14  Ala.  469,  472. 
^Sg^Jn  the_case  before  us,  the  party  dealing  with  the  journeyman, 
having  no  notice  of  the  Tact  that  he W'as  working  for  the  defendant 
m  error,  and  having  made  to  him  full  payment  before  he  was  informed 
y  thedefendant  that  he  claimed  the  price  of  the  work,  must  be  con- 
siHereT^as  discharged  from  any  obligation   to  pay  the  yoney  oyer  ^ 
agairTto  th^principal. — Smith's  Mercantile  Law,  129.® 

TF  results  from  what  we  have  said,  that  the  County  Court  mistook 
the  law  in  holding  the  plaintiff  in  error  liable  for  the  payment  he  had 
previously  made  to  Richardson. 

The  judgment^  is  consequently  reversed,  and  the  cause  remanded. 


PITTS  V.  MOWER. 

(Supreme  Judicial  Court  of  Maine,  1841.     18  Me.  361,  36  Am.  Dec.  727.) 

Assumpsit  for  the  price  of  a  "horse  power"  sold  to  defendant  b}^ 
HTTtT'Pitts,  who  was  the  agent  of  plaintiff.  The  agent  took  in  pay;;^ 
ment  notes  running  to  himself.    The  case  comes  up  on  exceptions  to 
the  ruling  and  instructions  in  the  trial  court. 

SiiEi'LEY,  J.  It  has  been  decided,  that  the  disclosure  of  a  trustee 
and  the  judgmervnTpon  it  are  to  be  received  in  evidence  OTTJy  between 
those,  who  are  parties  to  the  suit.     Wise  v.  Plilton,  4  Greenl.  435. 

In  this  case  the  plaintiff  was  not  a  party  to  the  suit  in  which  the 
disclosure  was  made,  and  he  is  not  bound  by  that  judgment. 
""WHen  an  agent  sells  the  goods  of  his  principal  and  takes  a  prornis^^ 
scry  note  payable  to  himself,  the  principal  may  interpose  before  pay- 

»  So  rayniput  is  pnorl  to  a  brokpr  wlin  sells  as  principal.  Townsend  v.  In- 
kHs,  1  Holt.  21^.  ?,  v..  C.  L.  101  (1816);  Coates  v.  Lewis,  1  Campb.  444  (1808), 
|>er  Ld.  Kllenborough. 


Ch.  6)  LIABILITY  OF  THE  THIRD  PERSON  TO  THE  PEINCIPAL  790 

ment,  and  forbid  it  to  be  made  to  his  agent;  and  a  payment  to  the  J  y/l   / ^ 
a^tJ^rTaller  {tiTs'will  not  be  good.     And  the  principal  may  sue  in  his  '  "^  ^\^^~/ 
own  narne  on  the  contract  of  sale,  except  when,  as  with  us,  it  is  ex- 
tinguisliedby  taking  a  negotiable  promise.     It  is  said  in  argument 
For  tiie  defendants,  that  thejaw  \yill  not  imply  a  proiiiTs^wlier'e  there  j/ ■ 
fS  an  express  one;  and  that  there  being  an  express  one  iij^tlic  uote.ta,.,    ""^^ 
JrLiram  A.  Pitts  one  cannot  be  implied  to  the  plaintiff.     'I'l'"  i-"v  re-         f    ^"'"^ 
garas  the  express  contract  made  wiili  the  a^' m  in  the  as^  . 

— Tnade  with  the  principal  and  as  remaining  une\iiiiL:i>hi  '  i  ote 

not  negotiable.     These  rights   of  the  princij  al   are   \\e,i  --hed 

and  we're  recognized  in  the  cases  of  Titcomb  v.  Seaver,  4  Greenl.  542, 
and  Edmond  v.  Caldwell,  15  Me.  340.  In  this  case  the  defendants 
were  notified  before  payment  nr  jiid^meJIT  Agrgi'pjyt  them  as  trustees, 


that  thy  plauitifT  was  the  owner  of  the  property  sold,  and  that  he 
"claimed^to  JiaV-g  the  paymenfmadg  to  hunselt.    it  iliet-  thoui;ht  prop- 
er  to  disregard  thaTnotice,  the  rights  of  the  plaintifif  caiuiMt  iheieby 
)e    irnpaired.^ 
Exceptions  sustained  and  new  trial  granted. 


SECTION  2.— FOR  FUNDS  OR  PROPERTY  OF  THE  PRIN- 
CIPAL 


TAYLOR  V.  PLUMER. 

(Court  of  King's  Bench,  1S15.    3  Maule  &  S.  r.(iU,  2  Koso.  ir.T.  in  Rov.  Hop.  3G1.) 

Defendant  entrusted  to  one  Walsh,  his  broker,  a  draft  for  £22,200. 
wiTh  which  to  buy  exchequer  bills.    Tlic  broker  "misapplied  the  most 
"Of  tTie~Tirhds  from  the  draft  by  purchasing  American  Securities,  in- 
tending to  abscond  with  them  to  America.     He  was  arrested  before 
"escaping  the  country,  and  handed  over  to  his  principal  the  American 
Securities.     On  the  day   he   misapplied  the  money  he   had  become^ 
bankrupt,  and  his  assignees  now  bring  tr<:>ver  for  the  secmities.  _  i 
Lord  ELLr.NnoRouGH,  Ch.  J.    After  stating  the  case,  his  Lordship 
said,  Th£j)lamtifT  in  this_ca^is  not^^  '     r    -  .\(r  if ihciklcud- 

ant  has  succeeded  in  maintaming  tjiese  pro;  m  point  of  law. 

"viz..  th'3T'Tt'nrprV)pert\''(')T  a  ijrlnoipal  eiUrusK-d  by  him  to  his  factor 
for  any  special  pun  1 1^<' T^kT.  iiu-s  lo  fTii-  mineinal.  iii  il\\  idi-landiiiL'  any 

IIgg"^hictT  til  a!  I 

so  long  as  such  prupert^^  '  "'^^p'] 


0  It  mnttrrs  not  tlmt  tlio  tliiitl  |.«i.H..ii  lia.s  jtr.'iiii.s.'.l  to  i.ii.v  lln-  imtc  f<>  tin- 
aKPnt.     FarmerH*  &  Mf<  hnnlcs'  Nnf.  Itnnk  v.  Klnc,  r>7  V\\.  UOL'.  OS  Am.  Im-c 

121.-)  (isas). 


^' 


800  KFFKCTS   AND   CONSKQl'ICNCKS   OF  THE    REI.ATION  (Part   3 

guishod  fronijillj3llicrj)rojK'rtx._  And,  sccgjjdb..- thai. all,  property  tJius-. 
cTrcumstanccd  i5._e»4Ualb'-  recoverable  from  the  assignees  of  the  lac- 

Tor,  in  the  event  of  his  bceoniinj;  a  bankrupt,  as  it  was  from  the 

factor  himself  before  his  bankniplcy.    .y\nd,  indeed,  upon  a  view  of 
"      the  authorities,  andToTTsuTeration  of  the  arguments,^;!  should  seeOL- 

that  if  the  property  in  its  original  state  and  form  was  covered  wjlli, 
"     a"trust~in  favour  of  the  principal,  no  change  of  that  state  and  form  . 
""cruTdivest  it  of  such  trusT,'  or  give  the  factor,  or  those  who  represent 
7~~tTifii  in  right[[jin"y7otber  more  valid  claim  in  respect  to  it,  thnn  thpy 
respectivelxji^c^  before  such  change^  ^n  abuse  Df  trust  can  confer 
^IIin^rTiglitsonnie  party  abusing  it,  nor  on  those  wlu)  claim  in  privity 
wjth  him.    The  argument  which  has  been  advanced  in  fa\M)ur  of  the 
plaiiittflTsT^hat  the  property  of  the  ]irincii>al  continues  (nil\-   so  lung 
a^TTie"authOrity  of  the  principal  is  pursued  in  rc^pcct  to  the  order  and_ 
^^spbsitfoTi  "of'  it,  and  that  it  ceases  when  the  property  is  toriiously  _ 
^  L  convened  into   another   form  for  the  use  of  the   factor  himself,   is 

miscliievous  in  principle,  and  supported  by  no  authorities  of  law. 
And  the  position  which  was  held  out  in  argument  on  the  part  of  the 
plaintiffs,  as  being  the  untenable  result  of  the  arguments  on  the  part 
of  the  defendant,  is  no  doubt  a  result  deducible  from  those  argu- 
ments ;  but  unless  it  be  a  result  at  variance  with  the  law,  the  plain- 
tiffs are  not  on  that  account  entitled  to  recover.  The  contention  on 
the  part  of  the  defendant  was  represented  by  the  plaintiffs'  counsel 
as  pushed  to  what  he  conceived  to  be  an  extravagant  length,  in  the 
defendant's  counsel  being  obliged  to  contend,  that  "if  A.  is  trusted 
by  B.  with  money  to  purchase  a  horse  for  him,  and  he  purchases  a 
carriage  with  that  money,  that  B.  is  entitled  to  the  carriage."  And, 
indeed,  if  he  be  not  so  entitled,  the  case  on  the  part  of  the  defend- 
ant appears  to  be  hardly  sustainable  in  argument.  It  makes  no  dif- 
ference in  reason  or  law  into  what  other  form,  different  from  the 
original,  the  change  may  have  been  made,  whether  it  be  into  that 
of  promissory  notes  for  the  security  of  the  money  which  was  pro- 
duced by  the  sale  of  the  goods  of  the  principal,  as  in  Scott  v.  Surman, 
W'illes,  400,  or  into  other  merchandize,  as  in  Whitecomb  v.  Jacob, 
Salk.  160,  for  the  product  of  or  substitute  for  the  original  thing  stilly 
follow^s  the  nature  of  the  thing  itself,  as  long  as  it  can  be  ascertained   . 

to  be  such,  and^the  right  only  ceases  when  the  means  of  ascertain- 

ment  fail,  which  is  the  case  when  the  subject  is  turned  into  money, 
and  rnixccrand  confounded  in  a  general  mass  of  the  same  description. 
The  difficulty  which  arises  in  such  a  case  is  a  difficulty  of  fact  and 
not  of  law,  and  the  dictum  that  money  has  no  ear-mark  must  be  un- 
derstood in  the  same  way;  i.  e.  as  predicated  only  of  an  undivided 
and  undistinguishable  mass  of  current  money.  But  money  in  a  bag, 
or  othenvise  kept  apart  from  other  money,  guineas,  or  other  coin 
marked  Cif  the  fact  were  so)  for  the  purpose  of  being  distinguished, 
are  so  far  car-marked  as  to  fall  within  the  rule  on  this  subject,  which 

4 


Ch.  6)  LIABILITY  OF  THE  THIED  PEBSON  TO  THE  PBINCEPAL  801 

applies  to  every  other  description  of  personal  property  whilst  it  re- 
mains, (as  the  property  in  question  did,)  in  the  hands  of  the  factor, 
or  his  general  legal  representatives.^"     *     ♦     * 
A  nonsuit  must  be  entered. 


PEARCE  et  al.  v.  DILL. 

(Supreme  Court  of  Judicature  of  Indiana,  1S97.     149  Ind.  136,  48  N.  E.  7SS.) 

^Plaintiff  deposited  over  $5j0P0  in  her  name  in  the  defendant  baak^- 
giving  her  husband  authority  to  check  it  out  for  her  business.  He 
"Had  dealings  with  Pearce,  who  maintained  a  bucket  shop,  and  to  jiax 
for  '"Tutures"^  or  '^options"  in  wheat  and  corn,  he  drew  checks  f^'r 
$4.700  in  Pearce's  favor.  These  ilic  liaiik  received,  and  ir:r 
the  amount  to  the  account  of  Pearce.  Dill  and  Pearce  are  bum  m- 
"soTvent,  and  ]\Irs.  Dill  seeks  in  equity  to  have  the  court  restore  to  hex- 


account  the  moneys  wrongfully  transferred  and  still  standing  in  the 
account  of  Pearce.     From  judgment  for  plaintiff,  defendants  appeals. 
Jordan,  J.^^     *     *     *     The  insistence  of  counsel  for  appellee  is 
^that^^.  S.  Dill,  the  agent  of  their  client,  committed  a  Breach  of  trusty 
and  wrongfully  diverted  the  money  of  his  principal  into  the  bandar — 
"of  the  appellant  Pearce,  and  that  she  has  the  right,  under  the  facl.s 
and  the  law  applicable  thereto,  to  trace  it  into  Pearce's  bank  accounj 
"■   to  which  it  had  been  transferred,  and  have  it  restored  to  her  li\   thj 
'       court  as  her  property.     The  authorities  generally  affirm  and  supi^ort 

tTie  right  of  a  cestui  que  trust  to  pursue  and  recover  trust  funds  wrong-        ^ 
__    fully  diverted,  where  their  identity  has  not  been  lost,  and  whore  tluy    ^    ^  / 
have  not  passed  into  the  hands  of  parties  for  value  without  iioiiee     ^^  __^ 
of  the  trust.    Whenever  any  property  or  fund  in  its  original  state  has  y         / 

once  beerT  impressed  with  the  character  or  nature  of  a  trust,  no  sub-       / 
sequent  change  of  its  original  form  or  condition  can  devest  it  of  its  /      /^     / 
fru-StcJiaLacter,  so  long  as  it  is  capable  of  being  identified^  ancl_  the  ( 

"^Ine^iary  thereoT" rfiay  pursue  and  fecTaim  it,  regardless  of  the  forin         . 
Into  which  it  may  have  t)Cieh  "changed.  provuTcd  It  has  not  gone  into   ^ 
"     the  J)ossession  of  a  bona  fide  purdi  '  hout  notice.     All  that  the 

"^"~l3w  contemplates  by  re(juiring  the  i  .  .  or  fund  to  be  identified 
is  a  substantial  identification,  and,  in  case  the  fund  consists  of  money, 
the  cestui  que  trust  may  reclaim  it,  although  not  able  to  tr."  <•  '^- 
i^ntical  coins  or  bills,  so'ToYig  as  Tls  identity  as  a  fund  can  b' 
"  Uined.  It  is  a  well-settled  i)rinciplc  that  the  abuse  of  a  trust  luiid 
by  a  trustee  or  fiduciary  confers  no  ri^ht  upon  bim,  nor  nimn  ibnct-  ^ 
who  cTaltn  in  privity  with  liiin.     \\'l:i  re  the  fuii<l 

">  Ah  to  the  right  of  the  prlnrlpiil  to   hi.s  property  In  the  liniiclH  of  third 
persons,  see.  al.'io,  ante,  \\.  riOl. 

11  I'art  of  the  op'"'""  '»  omitted. 
Godd.Pb.&  a.— ."jI 


802  EKFKOTS    AM)    CHt.NSKgr  KNCKS    OV   ■niK    KKI.ATION  (Turt    3 

or  converted   into  other  property,  or   mixed   with   the_funds   of   the 
■     trustee,  or  of  those  clainiinjj  througB  him,  arid  can  be  traced  _aad 
"'~"~~trtcTrfrricdj_courts~\vTrraTlrihute  the  ownership  to  fhc  cestui  qtic  trust, 
and  will  noT  pernrft  the  wroni^ful   act  of  the  trustee  or   liduciary  in 
mixing  the  trust  fund  with  his  own  funds,  or  those  of  a  third  party, 
to  defeat  a  recovery,  but.  in  general,  in  such  cases,  will  separate  the 
~~Trust "fuivd  from  the  others  with  which  it  has  been  commingled,  and 
restore  it  to  the  beneficiary  entitled  to  receive  It     Hevls  v7  TTellin,  63 
" — riurT?9T~BiuuTyVrTown  of  Monticello,  84  Ind.  119;   Riehl  v.  Asso- 
ciation, 104  Ind.  70.  3  N.  E.  633;    Orb  v.  Coapstick,   136  Ind.  313, 
36  N.  E.  278.     Shepard  v.  Bank  (No.   17,783)  149  Ind.  532,  48  N. 
E.  346.     See.  also,  the  many  leading  authorities  collected  in  a  note 
to  the  case  of  Bank  v.  Goetz,  32  Am.  St.  Rep.  119,  on  page  125  (s.  c. 
138  111.  127,  27  N.  E.  907). 

The  rule  is,  when  the  right  to  pursue  and  reclaim  a  trust  fund  ex- 
ists, that  the  true  owner  thereof,  when  the  fund  is  traced  to  the  pos_-_ 
""^ssion  of  another,  and  identified,  has  the  right  to  have  it  restored 
^"    fo  hinr,  not  as  a  debt  due  and  owing  to  him,  but  for  the  reason  that 

it,is  his  property,  wrongfully  diverted  and  withheld ;    and  it  can  make 

no  difference,  in  regard  to  the  right  of  recovery  in  such  a  case,  whether 

the  fund  has  been  traced  into  the  possession  of  a  single  individual 

~orjntgjthej2ands_^f  a  firm  or  association  composed  of  many  persons, 

or  into  the  form  of  a  bank  account.    In  reHallett's  Estate  and  Knatch- 

buTl'vrHallett,  13  Ch.  Div.  696;   Englar  v.  Offutt,  70  Md.  78,  16  Atl. 

'    497,  14  Am.  St.  Rep.  332;    National  Bank  v.  Insurance  Co.,  104  U. 
S.  54,  26  L.  Ed.  693. 

The  evideiice,.jLS  we  have  seen,  discloses  that  Dill  was  the  agent 

of  the  appellee,  and  only  authorized  to  draw  checks  upon  her  money 

in  the  bank  for  her  use  or  in  her  business.    The  relation  between  him 

and  the  appellee  was  of  a  fiduciary  character,  and  in  the  use  of  her 

""money  in  this  respect Jbe  occupied  the  position  of  a  trustee;    and,  in 

llie~event  that  he  wrongfully  diverted  or  misapplied  such  funds,  the 

rules  relating  to  the  pursuit  and  recovery  of  a  trust  fund  apply.    Riehl 

■"ITT^Association,  supra;    Roca  v.  Byrne,  145  N.  Y.  182,  39  N.  E.  812, 

45  Am.  St.  Rep.  599.     *     *     * 

To  summarize,  in  conclusion,  the  agent  of  the  appellee  is  shown 
to  have  abused  his  trust  by  wrongfully  diverting  the  money  of  his 
prinrif.al  into  the  hands  of  Pearce  for  an  illegal  consideration.  The  lat- 
Ter  !  the  checks  in  controversy  with  knowledge  that  the  funds 

up<jn  Willi  ii  they  were  drawn  belonged  to  appellee,  and  that  Dill,  with 
whom  he  dealt,  was  misappropriating  the  money.  By  the  means  of 
these  checks,  which,  in  his  hands  at  least,  were  tainted  with  the  ille- 
gality of  the  transactions  in  the  settlement  of  which  they  were  drawn, 
appellant  procured  the  bank  to  swell  his  account  with  the  money  be- 
longing to  appellee.    Under  the  facts,  certainly  it  must  be  said  that 


Ch.  6)  LIABILITY  OF  THE  THIRD  PERSON  TO  THE  PRINCIPAL  803 

L^e  equitiewre  all  with  the  appel]ee,  and  neither  of  the  appellants 

areihajp^sition  fo  successijj^  recover.^- 

■^  SSmTother  alleged  errors  are  discussed  by  appellants'^  counsel, 
but  the  judgment  is  so  manifestly  right  upon  the  evidence  that,  even 
if  we  should  concede  that  the  intervening  rulings  of  which  they  com- 
plain were  erroneous,  they  would  not  result  in  a  reversal.  Section 
670,  Rev.  St.  1894  (section  658.  Rev.  St.  1881).  The  judgment  is  af- 
firmed, at. the  cost  of  the  appellants.  "     "   "     "^ 


LIME  ROCK  BANK  v.  PLIMPTON. 
(Supreme  Judicial  Court  of  Massachusetts,  1S35.     17  riclc.  150    "^S  Am    Doe 

WiLDE,  J.     The  plaintiff's^  clajm  is  not  founded  on  any  privity  be- 

^  tween  theparties,  arising  from  an  express  contract,  but  on  principles 

r  o^  equTty  imposing  an  obligation  on  the  defendants,  which  the  law 

J_^wiFmply  a  promise  on  their  part  to  fulfil.    It  is  cont'emled  that  the 

defendants   have  money  in  their  hands  belonging  to  the  plaintiffs, 

^  wnich  they  cannot  in  c(|uity  and  s^dc,!  conscience  retain,  and  that  in 

^^  such  case  an  action  for  nionry  ]ia>l  and   rcocTvcd'wTrTlie.'^Xncr'this 

generai^principle  is  unlonl.tc  <l!y  url!  (,^ialili>licd  by  the"  authorities^ 

^    and  IS  reasonable  and  cannui  operate  injuriuu;,lyto_anyppg^     The 

question   then  is,  whether  the  defendants  have  in  their  hands  any 

money  which  in  equity  and  good  conscience  belongs  to  the  plaintiffs. 

Jt  is  proved  satisfactorily  that  the  money  borrowed  by  the  defcMidants 


? 


^arkhurst. i^as  the  iiioi 

__agentj   but  of  this~'frict  ilu- 

ol  the  loan.     It  \\a>  iIkit: 


of  the  plaintiffs  in  his 

no  fN-nowlc 
:aL'l   Itrlw 


lands   as    llirir 
^c  at  the  linK\ 
n  ''k-  defend-  _^ 
ould  be 

'ijsj; 


t   onjy 
but 


the  loan.     It  \\ 
ants  ami  Parkhurst;    and  ii  the  ca^c  had  .stopped  1 
very  clear  that  this  action  could  not  be  niaintainrd. 
IS  true,  tlial  the  -aN-  li\   an  a:;'  iil,  willionl  aiitlicFi' 
than  money  ma\  be  di>a\oucd,  and  set  aside  in  tin-  casr  oi  .i     ■ 
purchaser,  yet  in  respect  to  money  the  law  is  otherwise;    n. 
)ecause  money  has  no  car  mark  and  cannot  be  easily  idenliliec 
because  a  different  doctrine  would  In-   ))r.idnrii\.-  .,r    m,  .i    mi. 
It  Isy  (Tierefore.  manifest  that  before 
the  money  lent  was  ihenioney  of  the  piainiius,  luc^   ,, 
i^arkhurst^  or  if  they  had  received  tli<-  money  in  jvim- 
against  Parkhurst,  tliii>  acliuu  cuuld 

UCS  *^"  ^^^''  defend.ilil  .     lli.it    tile    tiiiie 

only  quest  1'  n 


>2lf  the  nccnt  exr-hnnirea  the  prliielpal'H  projtcrl.v.  the  i)nip<'r(y  for  wlileh  ^ 
It  is  exfJiaiiKed  Ix-emiM's  liif  iirlnrliials  property,  and  lio  may  ree.iver  it   frnm        / 

a  tiiird  iKirly  who  lias  taken  It  in  i;o<hI  fjiltli  from  the  a^'enf,  and   Is  not  eoni  / 

peilod  to  sot  off  a  del)t  of  tiie  aKciit  tn  tlic  tliird  i»arty.     si.v  ...,.,,>,  ,     K  >  i..    !■  I 


W.  Va.  L'LU  LM  S.  K.  SSJl.  .'j?  Am.  St.  Uep.  .S.'',4  (IMJCt 


J     o 


804        EFFECTS  AND  CONSKQUENCES  OF  THE  RELATION    (Part  3 

lawfully^ tlotain  the  money;  and  wc  arc  of  oninioii^that ^ they  cou^4. 
"VTTarkhurst  \vas~in(lchted  to  tlicni  in  a  sunT"^cee^ng' (lie  loan, 
^Ttiey  liad  a  legal  nglitjiT  set-off  as  against  Parkhurst,  of  which  they 
covfld^not  be  dcpj-xyiidJbD'  the  intervention  .of  the  plaintiffs'  claim; 
anTl  however  disingeinious  the  defendants'  conduct  iii;i\  he  consider'e3 
nrfcTotipni  to  f^irTJulrst,  they  had  a  legal  right  tlms  lo  srcmo  their 
own  debt.     Their  refusal  to  repay  the  loan  according  to  agroLiiicnt 

'     was^a  breach  ofproniise ;  but  against  this  tlie  defendants  could  set  off 

^  "n  btjeZu^TjorpFdmrse  by  Parkhurst.  and  this  set  off  is  allowed  hy  law. 
The  tlefendants,  therefore,  had  a  legal  ri-lu  to  ai)iin)[)iialc  the  money     ^ 

"^"^A  :  t.  t' '  the  nS^-nicnt  of  their  own  debL  "  This  distinguishes  the  present 

^"^casc  from  tliat  of  Mason  v.  Waite,  where  the  money  came  into  the 
defendant's  hands  unlawfully,  and  he  had  no  legal  or  equitable  right 
to  retain  it  ;  and  also  from  that  of  Clarke  v.  Shee,  Cowp.  200.  But 
the  law  is  laid  down  by  Lord  Mansfield,  in  the  latter  case,  is  decisive 
against  the  plaintiffs'  claim.  '^.here_money  or  notes/'  it  is  said,  _ 
"are^paid  bona  fide,  and  upon  a  valuable  consideration,  they  never 

shall  be  brought  back  by  the  true  owner;   but  where  they  come  mala 

fide  into  a  person's  hands,  they  are  in  the  nature  of  speeific  property; 

and  if  their  identity  can  be  traced  and  ascertained,  the  party  has  a 

right  to  recover."^'' 

~~        JTbluDiifo  set  aside  the  nonsuit  overruled. 


f 


DEAN  V.  PLUNKETT. 

(Supreme  Judicial  Court  of   Massachusetts,  1884.     136  Mass.   195.) 

Contract  on  account  annexed  to  recover  $1,608.91,  and  interest,  for 
goods  sold  and  delivered.     Judgment  for  $119.91.     Plaintiffs  appeal. 

Devens,  J."  In  Locke  v.  Lewis,  124  Mass.  1,  26  Am.  Rep.  631, 
the  authorities,  which  were  found  to  be  to  some  extent  conflicting, 
were  carefully  examined;  and  it  vi^as  held  that  a  sale  by  a  partner,  in 

i»  As  to  money  deposited  in  a  bank  in  such  a  way  as  to  show  the  bank  that 
It  does  not  belong  to  the  depositor  personally,  see  Baker  v.  N.  Y.  Nat.  Etxch. 
Bank,  IfX)  N.  Y.  HI,  2  N.  K.  4.")2,  ;>',  Am.  Rep.  150  (iss.l),  in  wliich  the  money 
was  deposited  in  the  name  of  "Wilson  &  Bro.,  Agents."  See.  also,  Nat.  Bk. 
V.  Ins.  Co.,  104  U.  S.  54,  26  L.  Ed.  693  (1881),  in  which  the  l)ank  knew  the 
money  deposited  by  the  agent  belonged  to  the  principal;  Union  .Stock  Yards 
Bank  v.  Gillespie.  l.'iT  U.  S.  411,  11  Sup.  Ct.  118,  .34  L.  Ed.  724  (1890);  and 
Central  Stock  &  Grain  Exchange  v.  Bendinger,  109  Fed.  926,  48  C.  C.  A.  726, 
56  L.  R.  A.  875  (1901),  In  which  defendant  accepted  the  principal's  money  for 
an  illegal  purpo.se. 

F>ven  though  the  money  be  deposited  in  the  agent's  name,  and  remain  in 
his  account,  the  principal  is  entitled  to  reclaim  it  from  the  bank  as  against 
the  general  creditors  of  the  awnt.  Roca  v.  I'.yrue,  145  N.  Y.  182,  39  N.  E. 
812,  45  Am.  St  Rep.  .599  (1S9.">),  affirming  68  Hun,  502,  22  N.  Y.  Supp.  1039 
(1893) ;  Scott  v.  Surman,  Willes,  400  (1742).  This  is  so  even  though  some  of 
the  agent's  money  l)e  mingled  with  the  money  of  the  principal.  Van  Alen  v. 
Am.  Nat.  Bank,  52  N.  Y.  1  (187.3). 

1*  Part  of  the  opinion  is  omitted. 


Ch.  6)  LIABILITY  OF  THE  THIRD  PERSON  TO  THE  PRINCIPAL  SOo 

payment  of^  his  own  debt,  of  goods  which  were  in  fact  the  goods  of 
tne  partnership,  but  which  the  partnership  has  so  entrusted  to  him 
as  to  enable  him  to  deal  with  them  as  his  own,  and  to  induce^  the 
public  to  believe  them  to  be  his,  and  which  the  creditor  received  |in~  _ 
good  faith  and  without  notice  that  they  were  the  goods  of  the  part- 
'  nership,  was  valid  against  the  partnership  and  its  creditors.  No  dis- 
fih'ction  in  favor  of  a  partnership  can  be  made  where  such  a  transac- 
tion is  the  act  of  an  agent  who  is  not  a  partner,  to  whom  goods  have 
been  similarly  entrusted  as  the  case  rests  upon  the  principles  of 
agency.  '■    autlToritics  agree,"  says  Chief  Justice  Gray,  "that       A^ ^ 

when  a  pc  i     mi,  . mrusicd  with  goods  as  agent,  sells  them  to  one  who^,^'^ 
TiaT  no  knowledge  that  he  is  agent,  but  is  led  to  believe,  from  the  ^ 
fnanner  in  which  he  has  been  allowed  to  deal  with  the  goods,  that 
they  are  his,  the  other  party  to  the  transaction  may  set  off  against  the  ^ 
principal  a  debt  of  the  agent."     124  Mass.  7,  26  Am.  Rep.  631. 
""""  The  principle  thus  established  goes  far  in  disposing  of  the  case  at 
bar.    The  plaintiffs  are  the  widow  and  two  of  the  children  of  Horatio^ 
N.  Dean,  who,  in  company  with  another  child,  his  son  Ransom  B^" 
j!)ean,  had  carried  on  business  at  Adams  under  the  name  and  style  of^ 
H.  N.  Dean  &  Son.    Upon  the  decease  of  Horatio  N.  Dean,  in  Au- 
gust, 1872,  Ransom  B.  Dean,  who  also  was  the  administrator  of  his 
estate  with  the  will  annexed,  continued  the  business,  under  the  same 
name  and  style,  as  surviving  partner,  for  the  benefit  of  himself  ami 
those  interested  in  his  father's  estate.    The  defendants,  wlu),  at  _som<L.- 
— lime  prior  to  June,  J_877,  made  the  contract  with  him  by  which  they  —  - 
bougTit  the  g'oocls^  the  price  of  which  is  sought  to  be  recovered  in 
this  action,  believed  that  he  was  in  reality,  as  in  appearance,  then 
"    carrying  on  said  business,  as  he  had  done  for  the  first  few  months, 
"""^s  surviving  partner,  for  thr  benefit  of  those  interested  in  the  estate. 
In  faCt,~ari  arrangemerif  ha^l  I'm  made  in  1875,  by  which  the  plain- 
tiTTshad  agreed  to  continue  and  prosecute  the  business  at  Adams  as 
''copartners  under  the  name  of  H.  N.  Dean  &  Son,  which  was  the 
^-gSnTa^  and  style  of  the  original  firm,  and  had  constituted  Ransom  H. 
'    Dean  their  agent  and  attorney  to  conduct  it.    _There  was  no  inten- 
tional concealment  of  these  circumstances,  but  no  public  notice  of 
"them  was  given;   and  the  finding  of  the  auditor  necessarily  determines^ 

^ThaF'tTiey  were   unknown  to  the  defendants  when  they  made   their 

""agreem eti fvNTni  Ransom  B.  Dcnn,  and  when  they  received  from  hijn 
the  disiMitecl  items  oHhe  account  in  suit.  Tlu-re  were  certain  items 
Tlcliverecrto^he  defendants  before  this  agreement,  their  liability  f->r 
wh'rb  the  defendants  do  not  dispnte,  and  which  are  not  iu-re  con- 
sidered. 

The  plaintifTs,  assuming  the  name  and  st2lc_of^thc_old  jirm^  under 

which,  as  surviving  partner,  Ransom~TrT)ean  was  en( tiled  f.'        '  '     ! 

carried  on  the  bu^ine^s.  neglecting  to  give  notice  of  their  pi:;  i 

~  or  interest  in  It,  enii  i  ting  to  him  all  the  prnperty  and  its  manage- 


SOG        EFFECTS  AND  CONSEQUENCES  OF  THE  RELATION    (Part  3 

niont  (thov  residing  clscwliere  and  williout  the  State),  and  permitting 
Fiini  in  appearance  to  continue  to  conduct  the  business  as  surviving 
partner^cannot  coniipel  those  who  honestly  purchased  goods  of  him 
jr?"STrcti, -and  in  if:fno ranee  of  his  agency,  to  pay  or  account  for  them 
except  in  the  manner  agreed  upon  with  him.^"  *  *  * 
*""      Judgment  afHrmed. 


SECTION  3.— IN  TORT 


\ 


/ 


1 


I  \ 


PATTISON  V.  BARNES. 

^     '       /     I  (Supreme  Court  of  Judicature  of  Indiana,  18GG.    26  Ind.  209.) 

Cqniplaint  by   Pattison  against  Barnes  alleging  that  he  had   em- 
ployed an  agent  to  pay  and  compromise  debts  due  to  and  from  a  part- 
nership, of  which  plaintiff  had  been  a  member;  that  to  deceive  and 
~  defraud_jplaintiff,  defendant  falsely  represented  to  the  agent  that  plain- 
~t[ff~\vas  indebted  to  him  in  a  large  sum,  thereby  inducing  the  agent 
'     to  compromise  the  debt  by  a  payment  of  $250;  that  defendant  well 
knew  plaintiilf  did  not  owe  him  in  any  way,  either  personally  or  as  a 
"member  ofany  firm ;  wherefore  he  prays  judgment.     Defendant  de- 
imrrred,  and  the  demurrers  were   sustained.     Plaintiff   excepts   and 
"appeals  to  this  court.  «— — — 

Elliott,  J.^*  *  *  *  -^^  brief  has  been  furnished  us  by  the  ap- 
pellee. The  paragraphs  were  demurred  to  separately,  for  the  reason 
that  neither  stated  facts  sufficient  to  constitute  a  cause  of  action.  We 
are  not  advised  of  the  particular  objection  which  the  court  below 
regarded  as  fatal  to  the  complaint,  but  it  is  said  in  the  brief  of  the 
appellant's  counsel,  that  it  was  insisted  by  the  counsel  for  the  defend- 
ant that  the  suit  should  have  been  brought  by  the  agent  upon  whom 
the  fraud  was  practiced,  and  that  the  plaintiff's  remedy  was  against 

'  15  Accord:  Nixon  v.  Brown,  57  N.  H.  34  (1876),  in  which  the  agent  bought 
a  lior.se  and  took  a  bill  of  sale  in  his  own  name.  The  principal  allowed  him 
to  have  the  possession  of  the  horse  and  keep  the  bill  of  sale.  The  agent  sold 
the  horse  to  defendant.  Cf.  (iussner  v.  Hawks,  13  N.  D.  4.53,  101  N.  W.  898 
(1904>.  in  whifh  the  court  held  that  the  principal  could  not  be  divested  of  the 
ownersliip  of  his  property,  without  his  consent,  unless  by  his  conduct  he  had 
estopped  himself  to  as.sert  his  ownership,  as  against  an  innocent  i)urcha.ser. 
Clearly  if  tbe  tliird  person  is  cbargfd  with  knowledge  of  the  source  of  the 
fund  paid  nvcr  by  the  agent,  he  cannot  dispute  the  principal's  right.  Riehl  v. 
Kvansville  Foundry  Ass'n,  104  Ind.  70,  3  X.  E.  0.33  (1885) ;  Whitley  v.  Foy,  59 
N.  C.  34,  7.S  Am.  Dec.  2.30  (1800»,  in  which  the  court  says  the  principal  may 
reclaim  his  property  unless  it  has  been  transferred  bona  fide  to  a  purchaser 
of  it,  or  his  assignee,  for  value  without  notice.  Tbis  is  true  as  to  money  or 
negotiable  paper,  l»ut  there  can  be  no  holder  for  value  without  notice  of  other 
propert.v  exchanged  unless  upon  tbe  ground  of  estoppel.  The  proport.v  in  the 
case  was  money.  As  to  negotiable  paper,  see  Winship  &  Bro.  v.  Merchants' 
>'at.  Bank,  42  Ark.  22  (18S:i). 

i«  Part  of  the  opinion  is  omitted. 


Ch.  6)  LIABILITY  OF  THE  THIRD  PERSON  TO  THE  PRINCIPAL  807 

his  agent,  and  not  against  the_ defendant.     It  may  be  that  the  plaintiff 
CDTTtrt-Tecover  against  tlie' agent",' as  the  money  was  not  paid  on  a 
claim  existing  against  the  plaintiff.     Be  that  as  it  mav,  we  think  it 
^clear  that  the  facts  stated  in  either  paragraph  of  the  complaint  show 
^a  valid  cause  of  action  in  favor  of  the  plaintiff  against  the  defendant, 
"^ach  paragraph  charges  the  defendant  with  obtaining  the  plaintiff's 
_J2i2a£ilJro"''  h's  agent  by  fraud  and  deceit,  willfully' practice7rup'b'ir" 
^_hinTjpr  that  purpose.    The  fraud  thus  perpetrated  on  the  agent  was 
a  fraud  on  the  principal,   as  the  money  obtained  by   mean's   of  the 
fraud  was  the  property  of  the  principal,  and  he  is  therefore  entitled 
to_Jns  remedy  directly  against  the  wrong-doer.^^     We  see  im  \alid  f 

objection  to  either  paragraph  of  the  complaint,  and  think  the  court 
erred  in  sustaining  the  demurrers. 

The  judgment  is  reversed,  with  costs,  and  the  cause  remanded, 
with  instructions  to  the  court  below  to  overrule  the  demurrers  to 
the  second  and  third  paragraphs  of  the  complaint,  and  for  further 
proceedings. 


GILMORE  v.  NEWTON. 

(Supreme  Judicial  Court  of  Massjiclinsetts,  1SG4.    0  Allen,  171.  S."  Am. 

Dec.  74U.) 

Tort  foj^the  conversion  of  a  horse,  which  plaintilT.  the  owner,  let 
to^one  Barrows,  and  which  the  latter  e.\rhaiiL;(.d  with  defendant  for 
another  horse.     To  an  instructed  VLidici  fwr  plaiutirt,  defendant  al 
leged  exceptions.  ^~    ~  "  ' 

Metcalf,  J.  We  cannot  sustain  these  exceptions.  Th^  aiithoriti'  s 
are  decisive  that  tITe  defendant  converted  to  his  own  use  ific  pTaintiT/'s 
horse  by  taking  an  assignment  and  possession  of  him  from  a  person 
who  had  no  authority  to  dispose  of  him,  and  subsetiucntly  exercis- 
"  ing-dominion  over  him.  Stanley  v.  Gaylord,  1  Cush.  546,  48  Am. 
Dec.  643,  and  cases  there  cited ;  Riley  v.  Boston  Water  Power  Co., 
11  Cush.  11;  Williams  v.  Merle,  11  W^end.  80,  25  Am.  Dec.  604;. 
Riford  V.  Montgomery,  7  Vt.  418;  Courtis  v.  Cane,  32  \l.  17^2,  7b 

17  When  the  third  p'Tson  deceives  tlie  an"iit.  flie  linv  will  Ireiil  tlu>  prin- 
<ipal  us  deceived.  IN'rkliis  v.  ICviins,  CI  Idwa.  .■{.',  ir»  N.  \V.  r>s  |  (iss;;i;  Citi- 
uier  V.  Wii^lit,  1')  Ind.  liT.S  (iSdO);  W.ird  v.  I'.oiUciili.'ip-n.  .")(»  Wis  J.V.I  7  ,\. 
W.  ;{40  (ISSO). 

The  lialillity  will  he  (he  rleanT  when"  the  third  ]iers<)ii  connives  with  the 
tmcut  to  (h'traiid  lh(  iirlti(i|ial.  White  Sewhm  .Miich.  Co.  y.  Jteltiiit',  id  .Mo. 
Ajip.  417  (is'.di.  An<l  It  will  not  iii;itter  Hint  (he  pihielpal  ml^'ht  luive  re<-ov- 
ered  from  his  a;;en(.  KlnuniMn  v.  rierei',  17  .Muss.  L'47  (ISL'Ii;  Iterlholf  v.  (.Mdn- 
lan.  (IS  111.  L';»7  (1.S7.",(.  ,\n.v  prollt  (he  third  person  has  made  (hereh.v  he  liolds 
ff»r  the  princiiial,  who  may  recover  i(  In  a  (or(  action.  lioston  v.  Slnmions.  l.'iO 
Mass.  4r,l,  U.{  N.  K.  LMO.  «j  L.  U.  A.  (J'Ji*.  1.')  Am.  St.  Hep.  :.•:!(»  (ls<H»i;  Mnvor  of 
Salford  V.  Lever,  (IMH)  1  Q.  II.  KiM.  (JO  I>.  J.  g.  H.  .'«>.  tVA  L.  T.  t\:>s,  ;•,!»  W.  K. 
S,-.,  ,")  .1.  I'.  l.'44:  (;ran(  v.  (;olr|.  etc.,  Syiidl<a(«'.  I IIMKJ]  1  g.  U.  'Sili,  GJ)  L.  J. 
Q,  I'..   I.'.n,  VJ  L.  T.  .',   Id  T.  L.   I{.  sc,  4S   W.  U.  I^SC). 


\l 


808  EFFECTS   AND   CONSKQI'EXCKS   OF  THE    RELATION  (Part  3 

Am.  Dec.  174.  In  McConibie  v.  Davics.  6  Kast,  5-^0.  Lord  Ellen- 
borough  said:  "Accordiui;  to  Lord  Holt,  in  Baldwin  v.  Cole,  6 
Mod.  212,  the  very  assuming  to  one's  self  the  property  and  right 
of  disposing  of  another  man's  goods  is  a  conversion;  and  certainly  a 
man  is  guilty  of  a  conversion  who  takes  my  property  by  assignment 
from  another,  who  has  no  authority  to  dispose  of  it."  " 

The  defendant  admits  that  although  he  had  no  notice  that  the 
horse  was  stolen,  yet  he  acquired  no  title  to  him.  But  he  objects  to 
the  maintenance  of  this  action,  because  no  demand  of  a  delivery  of 
the  horse  to  the  plaintifT  was  made  and  refused  before  the  action  was 
^conmienced^  And  he  cites,  among  other  books,  2  Greenl.  Ev.  §  642, 
"wTiere  it  is  said  that  "a  mere  purchase  of  goods,  in  good  faith,  from 
one  who  had  no  right  to  sell  them,  is  not  a  conversion  of  them 
against  the  lawful  owner,  until  his  title  has  been  made  known  and 
resisted."  This  position,  though  not  supported  by  the  cases  referred 
to  by  Mr.  Greenleaf,  may  be  sustained  by  other  cases.  And  not  only 
are  there  decisions  that  "a  mere  purchase"  of  property,  without  tak- 
ing possession  of  it,  is  not  a  conversion  of  it,  but  also  decisions  that 
a  purchase,  receiving  a  pledge,  or  other  bailment,  etc.,  of  property 
from  one  who  had  no  right  to  dispose  of  it,  and  taking  possession 
thereof,  without  any  further  act  of  dominion  over  it,  does  not  always 
constitute  a  conversion  of  it.     But  we  need  not  discuss  this  class  of 

18  Accord:  Velsian  v.  Lewis,  15  Or.  539,  16  Pac.  631,  3  Am.  St.  Rep.  184 
(18SS).  in  wliich  the  court  said:  "At  first  blush,  it  may  seem  strange  that  one 
who  takes  possession  of  goods  or  chattels  under  a  contract  of  purchase  from 
one  who  had  no  right  to  sell  should  be  ti-eated  as  a  wrong-doer,  but  the  ex- 
planation of  the  principle  lies  in  the  common-law  maxim  caveat  emptor,  wliich 
applies  to  the  transfer  of  personal  property.  It  is  the  buyer's  own  fault  if  he 
is  so  negligent  as  not  to  ascertain  the  right  of  the  vendor  to  sell,  and  he  can- 
not successfully  invoke  his  bona  fides  to  protect  liiniself  from  liability  to  the 
true  owner,  who  can  only  be  divested  of  his  rights  or  title  to  his  property  by 
his  own  act,  or  by  the  operation  of  law.  Every  person  is  bound  at  his  peril 
to  ascertain  in  whom  the  real  title  to  property  is  vested,  and,  however  much 
diligence  he  may  exert  to  that  end.  he  must  abide  by  the  consequences  of  any 
mistake.  Oil  more  v.  Newton,  9  Allen,  171,  S5  Am.  Dec.  749;  Spraights  v. 
Hawley.  39  N.  Y.  441,  100  Am.  Dec.  4.52;  Hotchkiss  v.  Hunt,  49  Me.  213. 
Nothing  can  be  plainer  than  that  no  one  can  sell  a  right  when  he  himself  has 
none  to  sell,  and  that  every  such  wrongful  sale,  by  whomsoever  made,  wheth- 
er by  thief  or  bailee,  acts  in  derogation  of  the  riglits  of  the  owner,  and  in 
hostility  to  his  authority,  and  consecjuently  can  neither  acquire  themselves, 
nor  confer  on  the  purchaser  any  right  or  title  of  such  owner..  Mere  posses- 
sion of  another  man's  property  affords  no  evidence  that  the  person  having 
such  possession  has  power  to  sell  it,  and  he  who  purchases  or  intermeddles 
with  it  must  see  to  it  that  he  is  protected  by  the  authority  of  one  who  has 
power  to  sell.  Dixon  v.  Caldwell.  15  Ohio  St.  412,  Sfj  Am.  Dec.  487;  Spraights 
V.  Hawley,  supra ;  Cooper  v.  Newman,  45  N.  II.  339.  A  possession  taken  un- 
der a  purfhase  from  one  without  title,  and  who  has  himself  been  guilty  of  a 
conversion  in  disposing  of  the  goods  or  chattels,  is  a  possession  unauthorized 
and  wrongful  at  its  inception,  and  which  the  absence  of  evil  intent  in  the 
purchaser  cannot  make  riglifful  or  lawful.  Such  a  possession  is  based  on 
the  assumption  of  a  right  of  property,  or  a  right  of  dominion  over  It,  derived 
from  the  fontract  of  sale;  and  what  is  this  in  the  legal  sense  but  a  wrongful 
Intermeddling  or  asjiortation  or  detention  of  the  property  of  another?" 

See,  also.  Ilolton  v.  Smith,  7  N.  II.  446  (18.3.5). 


Ch.  6)  LIABILITY  OF  THE  THIED  PERSON  TO  THE  PRINCIPAL  809 

cases,  for  no  one  of  them  sustains  the  defendant's  objection ;  forjiis^ 
is  a  case  not  only  of  receiving_an  assignment  and  taking^  possession. 
"oFthe  Horse,  but  aTso^Talterwards  exercising  dominion  over  him  b^_^ 

ailing^rirm  to  a  third  person.     See  Leonard  v.  Tidd,  3  IMetc.   6; 

ernald  v.  Chase,  37  Me.  292 ;  BilUter  v.  Young,  6  El.  &  Bl.  41.  ^ 

Demand  and  refusal  are  never  necessary  as  evidence  of  conver-_y 
sTon7  except  when  the  other  acts  of  the  defendant  are  not  suflBoirni 
To^prove  it ;  nor^are  they  evidence  of  it,  when,  as  in  this  case^  it  u.i- 
not  m  the  power  of  the  defendant  to  deliver  the  property  when  de- 
manded. Besides,  after  property  has  been  converted,  n  ^l.'^-.ry  pf 
it  fo  the  owner,  on  demand  by  him  will  not  l>ar  or  dn  nqj}^  , 

for  the  conversion,  but  will  only  mitigate  damages.     A   demand  on 
the  defendant  for  the  horse  was  therefore  needless  for'lEe'pIaTiUiii^ — .' 
and^  would  have  been  useless  to  the  defendant. 
— Exceptions  overruled. 


JONES  &  JETER  v.  BLOCIvER. 

(Supreme  Court  of  Georgia,  1S71.     43  Ga.  331.) 

Warner,  J.    The  plaintiffs  brought  an  action  against  the  defend- 
ants to  recover  damages  for  persuading,  enticing  an^l  I'l-Huring  one 
^n/Villiam  Powell  to  leave  their  employment.     The  plaintitYs  allege,  in 
"THeir  declaration,  that  on  the  5th  day  of  January, 1871,  they  entered 
— into  a  contract,  for  a  valid  and  legal  consideration,  \vIth_Powcll,  to 

""work  for  them  on  their  farm  in  Early  county,  for  the  year  15/ 1 ;  that 

'""subsequently  to  the  making  9f  said  contract^  the  defendants  malicious- 

"^persuaded,  enticed,  procured,  and  caused  the  said  Powell  to  break 

EiT'contract  with  plaintiffs,  leave  their  employment,  and  to  go  into . 

— fhe  employment  of  defendants,  knowing  at  the  time  they  -lid  so  that___^ 
— ^said  Powell  was  under  contract  with  the  plaintiffs  as  before  stated*  — 
whereby  they  were  damaged  ^500.00.     The  defendants  denuirred  to     , 
flie  plaintiffs'  declaration,   as   not  being   sufficient   in   law  to  entitle  ^ 

them  to  recover,  which  the  court  sustained,  and  dismissed  the  plain  '     ^ 

tiffs'  action,  whereupon  the  plaintiffs  cxceiHed. 

It  was  said  by  P.lackstone  "that  the  retaining  another  person's  serv- 
ant during  the  tiiin  he  lias  acrccd  to  serve  his  present  mailer,  as  it  is 
Tingenttemanli!  n  jV/r/ya/  act.     For  every  master  has,  by 

his  contract,  pur(  na^<<i  lor  .i  valuable  consiflcration  the  service  of 
his  domestics,  for  a  limited  time,  the  inveiKli"K  or  hiring  of  his  serv- 
ant, which  indorses  a  breach  of  this  contract  is,  therefore,  an  injury 
to  the  ma.ster;  and  for  that  injury  the  law  has  Riven  him  a  remedy 
by  a  special  action  on  the  case:"  3d  I'.lackstone's  Commentaries, 
142.  The  same  principle  is  api)licablc  where  one  nw  ••■;''■■  n 
lahorrr  to'^work  on  his  farm,  and  another  man,  ktio; 
c  of  employment,  '  persuades  the  1. 


810         EKPHCTS  AM)  CONSKQIKNCKS  OK  THK  UKLATION     (Part  3 

leave  tlie  service  of  his  Ikst  employer  during;  the  lime  for  which  he 
was  soj^rni^lo^edJ"     It  ^vas  error  in  the  Court  below  to  sustain  the 
demurrer  to  the  plaii^irts'  decTaration,  and  dismissing  the  samq. 
Jiittgnient   reversed. 

10  Accord:     Hart  v.  Aldrid^ro.  Cowpor  H-t  (MIA),  per  Txird  Mansfiold. 

The  snnio  rule  applies  when  tlic  priii(ii)al  is  deprived  of  tlie  services  of  his 
iii:ent  hv  a  wroiiL'ful  iiiiitrisoimieiit.  of  (lie  aueiit  l».v  a  third  person.  Woodward 
v".  Waslibiu-n.  .">  l»cnio.  .•'.»■.!)  (IstC),  and  wlien  (lie  a.i;ent  by  tln-oats  and  intimi- 
dation is  indnced  to  lirealc  Ids  contract.  1  >on'nnis  v.  Ilennessy,  17(i  111.  <i()S, 
n-J  N.  E.  0-J4.  -A  N.  E.  r)-J4.  4:5  L.  II.  A.  707.  SOI!,  GS  Am.  St.  Kep.  L'Oli  (ISDS), 
attcniptins:  to  distinu'uish  the  famous  Enf,'lish  case  of  Allen  v.  Flood.  IIS'.IS] 
A  C  1.  G7  L.  J.  Q.  B.  110,  77  L.  T.  717,  40  W.  R.  1258.  Cf.  Boinlior  v.  Ma- 
cauley,  91  Ky.  l.?">.  lo  S.  W.  (iO.  12  Ky.  Law  Kep.  737,  11  L.  R.  A.  550,  ;{4  Am. 
St.  Rep.  171  (ISOl).  The  agent  must  be  under  a  contract  which  he  is  induced 
to  break  to  the  injury  of  the  principal.  Walker  v.  Cronin,  107  Mass.  555 
(INTH.  The  principle  extends  to  every  grade  of  service  from  the  most  brilliant, 
best  paid,  to  the  most  homely.  Ilaskins  v.  Royster,  70  N.  C.  GOl,  16  Am.  Rep. 
780  (1874).  The  leading  case  of  Lumley  v.  Gye,  2  El.  &  Bl.  21G,  75  E.  C.  L. 
216  (1S53). 


PART  IV 

ACTIONS^ 

CHAPTER  I 
THE  FORM 


LOVELESS  V.  FOWLER. 

(Supreme  Court  of  Georgia,  1S87.    79  Ga.  134,  4  S.  E.  lOn,  11  Am.  Rt.  Rop.  407.) 

Bleckley,  C.  J.  There  was  a  bailment  of  goods  to  be  sold  for 
cash.  The  bailee  sold  a  part  on  a  credit,  and  a  part  remained  unsold. 
He  paid  the  bailor  for  a  portion  of  them.  The  bailor  then  brought 
trover  against  him,  requiring  bail  under  the  statute  applicable  to  such 
actions.  Pending  the  action,  the  defendant  died,  and  his  adminis- 
trator was  made  a  party.  The  alleged  value  of  the  stock  was  $1,156.- 
43,  but  how  much  was  sold,  unsold,  or  paid  for  does  not  appear. 

1.  There  was  authority  to  sell,  and,  that  being  so,  the  sale  on  a 
credit  was  a  mere  violation  of  instructions  as  to  the  terms  of  sale. 
Such  a  sale  would  pass  title,  unless  the  purchaser  knew  of  the  viola- 
tion of  instructions,  and  a  sale  which  passes  title  is  not  a  conversion, 
though  it  may  be  an  abuse  of  authority.  It  is  like  selling  at  a  less 
price  than  that  named  in  the  agent's  instructions.  The  Broker's 
Case  (Clark  v.  Cumming),  77  Ga.  64,  4  Am.  St.  Rep.  72,  is  not  in 
point.  A  sale  on  credit  by  an  agent  in  possession  of  the  goods,  and 
authorized  to  sell  for  cash  only,  is  not  a  conversion  ;  certainly  not, 
unless  it  appear  that  the  purcliaser  had  notice  of  the  limitation  in 
the  agent's  instructions. 

2.  The  pro])er  remedy  against  such  agent  is  not  trover,  but  an 
action  on  the  ca.se  for  violation  of  instructions  or  breach  of  contract; 
and  in  the  ];resent  instance  the  class  of  remedy  is  material,  for  in 
trf)ver  bail  is  requirable.  but  in  an  action  for  breach  of  contract,  or 
for  disobeying  instructions,  it  would  not  be. 

1 'J'hc  onliiiMry  rules  of  pliMdliiu  ;iii<l  |tnir(l<c.  of  roursp,  Rovorn  In  nrMli>nH 
pfdwiriK  "lit  of  the  )i;it'iicy  rrliilioii,  iiiul  iiccil  no  spccliil  coiislilcriilloii  In  a 
hook  fin  I'rlnripjil  iiml  .\p'nt.  'I'lu'  ciisfs  In  I'lirt  IV  jiri-  cliosm  to  lllusfnitc 
lulos  \v)il«h  nr*'  pt'cnliiir  to  imfMuy.  or  whlfli  Ijikc  on  ii  pfcniliir  color  or  In- 
terost  In  imciKV  prohlcnis.  Miiny  of  (lie  fiisfs,  Htiprn.  of  frnirsi«.  ilhiMlrnli' 
IncldontJilly  rtilVs  of  ph-ndlnu'  iind  priu'tlco,  iind  niiiy  ""W  iirolltnlily  lit-  re- 
examined from  this  stMndpolnt. 

(MI) 


812  ACTIONS  (Part  4 

3.  Ruling,  as  we  do,  that  the  creiHt  sale  was  not  a  conversion, 
cither  of  the  whole  stock  or  the  part  sold,  and  no  demand  appearing 
as  having  been  made  prior  to  the  commencement  of  the  action,  we 
see  no  evidence  in  the  record  of  any  conversion  at  all  on  which  to 
base  a  recovery.  Unless  an  actual  conversion  by  a  bailee  be  shown, 
an  action  of  trover  against  him  will  not  lie,  without  a  previous  de- 
mand for  the  goods,  and  failure  to  redeliver. 

4.  In  the  argument  here  it  was  said  that  a  demand  could  and  would 
have  been  proven  had  the  court  not  prematurely  granted  a  nonsuit 
on  the  agreed  statement  of  facts.  We  are  thus  called  upo  to  con- 
strue the  statement,  so  as  to  see  whether  the  court  below  u.^rpreted 
it  correctly.  The  parties  went  to  trial  on  a  statement  as  to  what  evi- 
dence the  plaintiff  would  introduce,  and  on  which  he  based  his  right 
to  recover ;  which  statement  was  that  the  goods,  of  the  alleged  value 
of  $1,156.43,  were  delivered  by  plaintiff  to  defendant  to  be  sold  for 
cash,  and  plaintiff  and  defendant  were  to  divide  the  profits,  and  the 
goods  not  sold  were  to  be  redelivered  to  plaintiff,  and  that  plaintiff 
proposed  to  prove  only  that  defendant  sold  a  part  of  the  goods,  and 
sold  them  for  credit,  and  paid  plaintiff  for  a  portion  of  them,  and 
there  can  be  no  identification  of  the  goods  sold  or  not  sold,  but  plain- 
tiff can  only  show  that  goods  were  turned  over  to  defendant.  This 
statement  conceded  that  plaintiff  could  prove  the  facts  recited  there- 
in, and  them  only,  and  was  a  virtual  admission  that  no  demand  for 
the  goods,  or  any  of  them,  prior  to  the  institution  of  the  suit,  could 
be  established;  and  the  object  of  the  statement  being  that  the  court 
might  determine  the  law  arising  upon  the  recited  facts,  though  they 
alone  were  in  evidence  before  the  jury,  there  was  no  error  in  order- 
ing a  nonsuit. 

Judgment  affirmed. 


]\TcMORRIS  v.  SIMPSON. 
(Supreme  Court  of  Judicature  of  New  York,  1839.     21  Wend.  610.) 

Action  of  trover.  Defendant  went  to  market  with  his  own  butter, 
and  also  took  some  for  plaintiff,  a  neighboring  farmer.  He  could 
not  sell  it  in  New  York  City,  and  so  shipped  it  South.  There  was 
evidence  of  usage  and  custom  and  of  the  broad  powers  given  by  plain- 
tiff. The  trial  judge  charged  that  he  was  bound  to  sell  in  New  York 
and  not  elsewhere.    Motion  to  set  aside  a  verdict  for  plaintiff. 

Bron'SON,  J.^  [After  holding  that  the  judge  was  not  on  the  evi- 
dence justified  in  so  charging  the  jury:]  *  *  *  fhe  question 
whether,  in  any  view  of  the  case,  this  action  of  trover  can  be  main- 
tained, was  discussed  on  the  argument,  and  as  that  point  may  arise 
on  another  trial,  it  will  be  proper  to  give  it  some  consideration.  The 
most  usual  remedies  of  a  principal  against  his  agent  are  the  action 

2  Part  of  the  opinion  is  oujittod. 


Ch.  1)  THE   FORM  813 

of  assumpsit,  and  a  special  action  on  the  case;  but  there  can  be  no 
doubt  that  trover  will  sometimes  be  an  appropriate  remedy.  That 
action  may  be  maintained  whenever  the  agent  has  wrongfully  con- 
verted the  property  of  his  principal  to  his  own  use ;  and  the  fact  of 
conversion  may  be  made  out,  by  showing  either  a  demand  and  re- 
fusal, or  that  the  agent  has,  without  necessity,  sold  or  otherwise  dis- 
posed of  the  property  contrary  to  his  instructions.  When  an  agent 
wrongfully  refuses  to  surrender  the  goods  of  his  principal,  or  wholly 
departs  from  his  authority  in  disposing  of  them,  he  makes  the  prop- 
erty his  own,  and  may  be  treated  as  a  tort-feasor.  But  there  must 
be  some  act  on  the  part  of  the  agent — a  mere  omission  of  duty  is  not 
enough,  although  the  property  may  be  lost  in  consequence  of  the 
neglect.  Nor  will  trover  lie  where  the  agent,  though  wanting  in 
good  faith,  has  acted  within  the  general  scope  of  his  powers.  There 
must,  I  think,  be  an  entire  departure  from  his  authority  before  this 
action  for  a  conversion  of  the  goods  can  be  maintained.  The  fol- 
lowing cases  will  be  found  to  support  these  positions.  Lyeds  v. 
Hay,  4  T.  R.  260;  Murray  v.  Burling,  10  Johns.  172;  Yaul  v.  Har- 
bottle,  Peake's  Cas.  49;  Severin  v.  Keppell,  4  Esp.  R.  156;  Anon.. 
2  Salk.  655;  Packard  v.  Getman,  4  Wend.  613,  21  Am.  Dec.  166; 
Bromley  v.  Coxwell,  2  Bos.  &  Pul.  438;  Owen  v.  Lewyn,  1  Vent. 
223.  Catlin  v.  Bell,  4  Camp.  183,  was  an  action  of  assumpsit,  but 
trover  might,  perhaps,  have  been  maintained. 

In  the  case  at  bar,  if  the  defendant  was  limited  to  a  sale  in  the  city 
of  New  York,  and  not  elsewhere,  the  delivery  of  the  property  to  a 
third  person  to  be  disposed  of  in  another  market,  would,  I  think,  be 
a  conversion.^  But  there  must  be  a  new  trial,  on  the  ground  that 
the  case  belongs  to  the  jury. 

New  trial  granted. 

«  See,  also,  Murray  v.  nurlinp:,  10  Johns.  172  (ISl.*?). 

Whether  the  ii(ti<>;i  :ij;!iiiist  an  iijrent  may  he  trover,  or  must  he  hased  upon 
his  ohli^'ation,  is  a  tlilluiilt  (|iiestlon.  If  Ills  wrons  is  simply  n  failure  iirop- 
erly  to  perform  his  a;.'('my,  tlie  action  should  l)e  hased  on  tlie  ohllpitlon.  If 
tlie  wrong  Is  an  invasion  of  the  ri^lils  <>f  tlie  owner  which  exists  independent 
of  tlie  eontraet,  the  aetion  Is  not  f<iuinl<>d  on  the  eontrart,  and  could  he  sus- 
tained whether  the  contract  e.xlsted  or  not.  Trover  lies,  ("otton  v.  Sharp 
stein,  14  Wis.  L''J<!,  SO  Am.  Dec.  774  (IS(il) ;  Laverty  v.  Snethen.  OS  N.  Y.  Til.'^, 
L'.*}  Am.  Kep.  ]S4  (1S77).     See,  also,  ante,  pp.  .Wt,  [>i>7. 

When  the  itiincijial  is  entitled  to  re<-eive.  and  the  agency  contract  ro<iulres 
the  awent  to  pay  over,  the  ldeMtl<al  money  re<clved.  trover  lies  r<ir  Its  eon- 
version.  In  oilier  cases  the  jirlnclpal  and  a^'eiit  are  merely  dehtor  and  cred- 
itor, and  a  contract  ad  ion  lies.  Salem  Traction  Co.  v.  Anson.  41  Or.  Wi'J,  (17 
I'ac!  Unr,,  m  I'ae.  070  (UM)!').  .  ... 

When  the  a^ent  h:is  converted  his  princlpars  proiierty,  the  latter  has  his 
election  to  sue  in  tort  for  the  trespji.ss  and  asportation,  or.  If  tie  can  <ome  at 
the  property,  to  .sue  in  replevin  for  its  rec(»very,  or  to  waive  the  tort,  and 
sue  in  assuiiipsit  iij'on  the  fid  Ion  thai  Ihe  ak'ciit  lias  disposed  of  imiiM-ity. 
and  has  promised  to  pay  for  it.  Harler  Co.  v.  Pearson,  !.•<;  Ohio  CIr.  Ct.  U.  (M)} 
(HlOli-  Schick  v.  Suttle.  ni  .Minn.  I.-..',  lO'J  N.  W.  217  (ItHr.i;  Md'rIllls  v.  Al 
len  .■>7  Vt  .'■.0.-.  nss.-,).  The  acijon  on  assnm|.sii  for  money  had  and  n-c.-lved 
is  i.ased  on  the  assumption  that  the  money  has  hwn  received,  or  the  au'enl 
has  received  some  benefit   from   the  transaction  as  a  credit  on  his  ac.unt. 


814  ACTIONS  (Part  4 

ASIILKY  V.  ROOT. 

(Supronio  Judicial  Court  of  Massiuliusctts,  1S02.     4  Allon.  n04.) 

CiiAPMAX,  J.  The  instruction  to  the  jury  that  the  plaintiff  was  not 
oniiilccl  to  recover  in  this  action  the  sum  of  Jf2250  collected  by  the 
defenilants  and  in  their  hands  as  his  agents  was  erroneous.  The  de- 
fendants' counsel  contends  that  it  was  correct,  because  the  declara- 
tion is  in  tort,  and  this  sum  can  only  be  recovered  in  an  action  of 
contract.  It  is  true  that  the  declaration  is  in  tort.  It  alleges  among 
other  things  that  the  defendants  were  the  agents  of  the  plaintiff,  and 
as  such  undertook  to  collect  and  secure  a  certain  note  of  $2500;  that 
they  collected  the  sum  of  $2250  on  the  note,  and  lost  the  balance,  and 
refused  to  pay  over  the  money  collected  upon  the  plaintiff's  demand, 
and  that  their  conduct  was  negligent  and  fraudulent  and  a  breach  of 
their  duty  as  agents. 

This  is  one  of  the  numerous  classes  of  cases  where  a  party  may 
elect  to  sue  either  in  contract  or  tort.  At  common  law  he  might  sue 
in  assumpsit  for  breach  of  contract,  or  in  case  for  breach  of  duty. 
The  general  rule  is  well  stated  in  Courtenay  v.  Earle,  10  C.  B.  73, 
that  where  there  is  an  employment,  which  employment  itself  creates 
a  duty,  an  action  on  the  case  will  lie  for  a  breach  of  that  duty,  al- 
though it  may  consist  in  doing  something  contrary  to  an  agreement 
made  in  the  course  of  such  employment,  by  the  party  on  whom  the 
duty  is  cast.  See  also  Church  v.  Mumford,  11  Johns.  479,  where  the 
doctrine  is  applied  to  the  case  of  a  breach  of  duty  by  an  attorney ; 
and  Howe  v.  Cook,  21  Wend.  29;  Gilbert  v.  Williams,  8  Mass.  51,  5 
Am.  Dec.  77;  Dearborn  v.  Dearborn,  15  Mass.  316;  Dwight  v. 
Brewster,  1  Pick.  50,  11  Am.  Dec.  133.  The  jury  should  have  been 
instructed  that  the  plaintiff  could  recover  in  an  action  of  tort  for  all 
the  injury  which  had  been  caused  by  the  defendants'  breach  of  duty, 
whether  in  the  loss  of  security  or  the  neglect  to  pay  over  on  demand 
the  money  which  they  had  collected  as  his  agents. 

The  proof  of  the  statutes  of  Iowa  was  in  conformity  with  the  pro- 
vision of  Gen.  St.  c.  131,  §  63. 

As  to  certain  other  questions  argued  in  respect  to  the  admission  of 
testimony,  they  may  not  arise  upon  a  new  trial,  and  therefore  it  does 
not  seem  to  be  necessary  to  decide  them. 

Exceptions  sustained. 

It  does  not  lie  when  no  money  or  credit  has  yet  passed  from  the  third  per- 
son to  the  auent.  Uowland  v.  Barnes,  81  N.  C.  2.'}4  (1S79).  See,  also,  Lind- 
ley  V.  DowniiiK.  2  Ind.  418  (isno);  Challiss  v.  W^viie,  35  Kan.  506,  11  Pac.  438 
(1880».  Having  made  his  election  the  principal  must  abide  by  the  choice  with 
all  lt.s  c-onse<|uences.  Colt  v.  Stewart,  50  X.  Y.  17  (1872),  in  which  tlie  prin- 
cipal sued  in  assumpsit,  and  therefore  had  to  allow  a  counterclaim  by  the 
agent. 


Cn,  1)  THE  FORM  815 

KING  V.  ROSSETT. 

(Court   of  Exchequer,   1827.     2  Younj,'e  &  Jervis,  33.) 

Bill  against  stock-brokers  for  an  accounting.  It  prayed  a  discov- 
ery ;  an  account  of  the  true  prices  at  which  the  stock  was  sold  and 
purchased ;  and  an  injunction  to  restrain  proceedings  at  law  which 
the  agents  were  taking  for  a  balance  they  claimed  to  be  due  from 
plaintiff.  The  agents  had  rendered  plainlifT  an  account,  showing  a 
balance  due  them  of  £625.  PlaintilT  claimed  this  was  erroneous  and 
inaccurate,  and  that  they  really  owed  him  ilOOO.  Defendants  put  in 
a  general  demurrer  for  want  of  equity. 

Alexander,  L.  C.  B.*  I  can  entertain  no  doubt  whatever  as  to 
the  course  which  ought  to  be  pursued  in  this  case,  and  am  clearly  of 
opinion  that  the  demurrer  should  be  allowed.  The  bill  is  filed  by  a 
principal  against  his  agents,  and  it  is  said  that  that  fact  alone  is  sufii- 
cient  to  sustain  the  bill.  Undoubtedly,  a  principal  is  entitled  to  an 
account  from  his  agent,  and  may  apply  to  a  Court  of  Ec|uity  for  that 
purpose ;  but,  as  I  conceive,  before  that  Court  will  interfere,  a  ground 
for  its  interposition  must  be  laid,  by  showing  an  account  which  cannot 
fairly  be  investigated  by  a  Court  of  Law.  Unless  Courts  of  Equity 
were  to  put  that  limit  to  their  interference,  no  case  of  this  description 
would  ever  be  tried  in  a  Court  of  Law,  and  wherever  a  person  was  en- 
titled to  a  set-ofif,  a  bill  might  be  sustained."  *  *  *  Demurrer  al- 
lowed with  costs,  according  to  the  practice  of  the  Court. 


VILWIG  V.  BALTIMORE  6L'  O.  R.  CO. 

(Rupreine  Court  of  .Vpj.t-.'ils  of  Vlr«iiilii.  1SS4.  7!)  Vm.  nO.) 
Bill  against  MKvig  and  W'orthen  for  a  discovery  on  oath  by  Wor- 
then  of  his  receipts  and  credits  as  agent  of  the  company,  to  determine 
the  amount  for  which  Vilwig  was  liable  as  surety  on  Worthon's  bond. 
HiNTOx,  J.°  The  bill  charges  that  this  company,  a  short  time  prior 
to  January  13,  1875.  appointed  one  B.  II.  Worthcn  its  a.^ent  in  Win- 
chester;  that  the  scope  of  his  agency  extended  from  Harper's  I'crry 

*  Part  of  the  oi»hilon  Is  omitted. 

fi  A  elnini.  in  eflfet.  merely  for  (himimes  for  hrejicli  of  n  eontrnrt.  or  nr 
eouiits  all  on  on<'  side,  Is  niiproprliiti'ly  disposed  of  nf  law.  an<l  e«nilly  will 
not  take  Jurisdiction.  I'Mton  v.  dark,  l.'d  Vn.  v.),  27  .\ti.  IK!  (lS!t:!).  The 
same  tliiiiK  is  true  of  a  mere  money  demand,  Harry  v.  Slcvms,  ."U  lleav.  2r>s. 
31  L.  .7.  Ch.  7S.-.,  (]  L.  T.  Uep.  N.  S.  r,r,.s.  <»  .Tur.  N.  S.  H.!.  10  W.  K.  S22.  51 
Kni;.  Hepr.  ll.'!7  (ist;2i,  and  of  a  simple  thouu'h  lonn  aei-ounf  of  (ransaellonN 
l»v  an  auent  upon  1Ix<m1  terms,  or  for  a  dcllnltc  compensation,  (ioildlu  v. 
Inland,  S7  Va.  70<;.  1.''.  S.  K.  Ijn,  2J  Am.  St.  Ucp.  «;7.s  (isitli. 

Sec.   jiiso,   the  jeadinu   ••ase  of   Koley   v.    Hill.  2   II.    L.  <'as.  2.S.  9   V.uii.    Ilepr. 
1(M»2  (1S4.S).  atlirndnk'  X  Jnr.  ;U7.   i:'.   L.   J.  Ch.   1S2,  1  Phil.  I'M).   I'.J   Knuv   <h. 

;:;»;».  4r  Knu.  itepr.  fis:;  (isi;!i. 

'•  F'arf  of  the  opinion  is  omitted. 


816  ACTIONS  (Part  4 

to  Strasburg.  subject  to  subonlinalc  aj::cncics  at  certain  intermediate 
points  on  the  line  of  tlie  road.  Tliat  Worthen  gave  bond  on  the  13th 
January,  1S75,  with  (the  apjiellant)  John  Vilwig  as  his  surety  in  the 
penalty  of  ^3.000,  conditioned  for  the  failhful  performance  of  his  du- 
ties as  such  agent.  That  Worthen's  agency  terminated  on  the  10th 
March.  1875,  and  that  there  was  then  due  to  the  company  a  sum  "of 
not  less  than  $1,140.39  with  interest,  etc.,  after  allowing  all  credits." 
The  bill  also  alleges  that  Worthen  had  received  as  agent  of  the  com- 
pany large  amounts  of  money  for  which  he  had  not  accounted,  and 
that  no  full  settlement  could  be  had  with  him  until  he  should  make  a 
full  disclosure  on  oath  as  to  "the  receipts  and  credits"  during  these  pe- 
riods. It  then  prays  for  a  discovery,  an  account,  and  for  general  re- 
lief. In  ]\Iay,  1879,  more  than  three  years  after  the  plaintiff  had  been 
required  by  the  court  to  furnish  the  defendants  with  copies  of  all  pa- 
pers pertaining  to  the  office  of  the  agent  at  Winchester,  during  the 
period  covered  by  the  bond  of  Worthen  and  Vilwig,  for  the  purpose 
of  aiding  them  in  making  their  answer,  and  more  than  two  years  after 
an  account  had  been  ordered,  Vilwig  filed  an  answer,  which  is  not  sus- 
tained by  the  proofs  however,  in  which  he  reserves  the  right  to  demur 
to  the  bill.  And  in  November,  1883,  more  than  eight  years  after  the 
filing  of  the  bill,  Worthen  filed  an  answer  in  which  he  demurs  to  the 
bill,  "pleads  want  of  jurisdiction  in  the  court,"  and  denies  that  any 
discovery  is  needed  from  him  or  that  he  had  at  any  time  received  any 
money  as  agent  for  which  he  had  failed  to  render  a  full  account. 

Now,  assuming  for  the  purposes  of  the  case,  what  is  certainly  not 
beyond  dispute,  that  it  was  competent  for  the  defendant  to  plead  to  the 
jurisdiction  of  the  court  at  the  time  he  did,  and  after  he  had  submitted 
to  its  jurisdiction  for  so  long  a  time,  and  in  some  instances  invoked  its 
powers,  we  proceed  to  consider  the  first  error  assigned  upon  this  ap- 
peal, viz.:  The  bill  should  have  been  dismissed  for  want  of  jurisdic- 
tion. The  bill  in  this  case,  it  will  be  observed,  is  not  a  technical  bill 
of  discovery,  or,  as  it  is  sometimes  called,  a  pure  bill  of  discovery,  that 
is,  a  bill  filed  for  the  purpose  of  enforcing  discovery  in  aid  of  proceed- 
ings before  some  other  tribunal,  but  is  a  bill  for  discovery  and  relief ; 
that  is,  it  is  a  bill  in  equity  calling  for  a  discovery.  In  this  sense,  "ev- 
ery bill  in  equity"  may  properly  be  deemed  a  bill  of  discovery,  since  it 
seeks  a  disclosure  from  the  defendant,  on  his  oath,  of  the  truth  of  the 
circumstances  constituting  the  plaintiff's  case,  as  propounded  in  his 
bill.  2  Story's  Eq.  §  1483.  The  bill  in  this  case  not  being  then  the 
technical  bill  of  discovery,  the  cause  did  not  necessarily  terminate  with 
the  failure  to  obtain  the  discovery,  and  it  was  competent  for  the  court, 
the  bill  being  for  an  account  as  well  as  a  discovery,  to  go  on  and  de- 
termine the  matter  of  controversy,  if  an  account  was  needed  for  a 
proper  decision  of  the  case.  For,  as  courts  of  equity  have  jurisdiction 
in  the  case  of  trustee  and  cestui  que  trust,  where  the  cestui  que  trust 
demands  an  account  of  moneys  received  under  the  trust  under  the  gen- 


Ch.  1)  THE   FORM  817 

eral  equity  for  enforcement  of  trusts,  so  "a  corresponding  equity  ex- 
ists as  against  an  agent  or  steward,  or  a  person  in  any  similar  charac- 
ter, who  is  bound  by  his  office  to  render  regular  accounts.  And  if  he 
fails  to  render  such  accounts,  his  employer  will  have  an  equity,  arising 
out  of  the  agent's  failure  of  duty  to  have  the  accounts  taken  in  the 
court  of  chancery,  where  the  evidence  may  be  supplied  by  discovery  on 
oath."  "This  equity  does  not  originate,"  says  Adams,  "in  the  mere 
want  of  discovery,  which  will  not  *  *  *  confer  a  jurisdiction  for 
relief,  but  in  the  additional  ingredient,  that  such  want  has  been  caused 
by  the  defendant's  fault."    Adams'  Eq.  §§  220,  221. 

In  Coffman  v.  Sangston,  21  Grat.  263,  this  court  said:  "The  juris- 
diction of  courts  of  equity  in  matters  of  account  involving  the  trans- 
actions and  dealings  of  trustees  and  agents  is  now  well  established. 
Not  that  the  bare  relation  of  principal  and  agent  justifies  the  interfer- 
ence of  the  court  in  every  case,  but  whenever  it  appears  that  a  discov- 
ery is  necessary,  or  that  there  are  mutual  accounts  between  the  par- 
ties, or  the  remedy  at  law  is  not  plain,  simple  and  free  from  difficulty, 
the  equitable  jurisdiction  attaches."  Zetelle  v.  Myers,  19  Grat.  62; 
Segar  v.  Parrish,  20  Grat.  680;  Simmons  v.  Simmons'  Adm'r,  33  Grat. 
451.  Within  this  category  the  case  in  hand  clearly  falls.  It  is  a  case 
requiring  an  investigation  of  the  complicated  account  of  an  agent  oc- 
cupying a  position  of  confidence  and  trust,  charged  virtute  officii  with 
the  duty  not  only  of  keeping  but  of  rendering  regular  accounts,  and 
who  was  the  custodian  of  most,  if  not  of  all  of  the  papers  and  vouch- 
ers which  showed  the  receipts  anrl  disbursements  of  his  agency.  In 
such  cases  the  remedy  at  law  is  not  as  plain  or  free  from  difficulty  as 
it  is  in  equity,  and  this  is  strikingly  illustrated  by  the  case  of  Ricii- 
mond  &  Petersburg  R.  R.  Co.  v.  Kasey  &  al.,  30  Grat.  220.  where,  the 
action  being  covenant,  both  parties  found  it  necessary  to  have  the  ac- 
count taken  before  a  commissioner.^  In  view  of  what  has  been  said, 
we  cannot  doubt  that  the  court  of  equity  properly  had  jurisdiction  of 
the  case.     *     *     * 

7  The  eqiiity  jnrisdlcdon  rests  Ijirp'I.v  n|">ii  conll(l«'iitinl  rt'lallrtiis,  Invulvliin 
the  ncod  of  fliscovcry.  aiicl  tin*  duty  i»f  cxiiLiiiMllnii.  M.-irvlu  v.  Unxiks.  JM  N. 
Y.  71  nss.-',);  Kippf  V.  .^tu-(Iill,  (Jl  Wis.  ."'.s.  UO  .\.  \V.  V,\r,  (issii.  rf.  .Miikciizli' 
V.  .Tdlmstdii,  4  .M.nld.  ."'.T-i,  .">•;  I'.im.  \U'\>r.  1 V2  (ISl'M,  which  mnkcs  tlit»  <Hniity 
jurisdiction  very  lirn;id.  with  Moxoii  v.  Hrlu'lH.  I..  K.  1  Cli.  IMH'.  'JO  I,.  T.  K.'i'- 
N.  S.  nOl  tlS(!!»),  .•iiid  Sinith  v.  Lcvcnux.  1'  I».'  (i.  .T.  A:  S.  1.  !>  .lur.  N.  S.  1  HO. 
Xi  L.  J.  Ch.  107.  0  L.  T.  Hoj).  N.  .S,  :\]:\,  .'{  N.-w  Ucit.  is.  IL'  W.  It.  :il.  07  Knu. 
Ch.  1,  40  Knt,'.  Rc'pr.  Ii74  (IHh'.l.  Ilinlllii;:  lt,s  iint'  to  cases  in  wlilch  nn  iidci|uiil<> 
dlscovory  cannot  he  Imd  nt  law.  !<cc.  also,  the  i:r>nenil  discussion  of  iipproprl- 
ate  actionH  In  Ueeslde's  Hx'r  V.  Keeside,  49  I'u.  :i'22,  SS  Am.  I)«'C.  OO.'l  (isd.'i). 
(iODD.I^l.iSc  A. — 51i 


SIS  ACTIONS  (Part  4 


UNDERTTILL  v.  JORDAN. 

(Supromo  Court  of  Now   York,   Appellate   Division,   First  Department,   1902. 
72  App.  Div.  71,  70  N.   Y.   Supp.  2(JG.) 

Appeal  from  special  term,  New  York  county. 

Action  for  an  accounting  by  Edward  C.  L^nderhill  against  Nina 
Jordan  and  another.  From  a  judgment  for  defendants,  plaintiff 
appeals.     Reversed. 

lI.Mcii,  J."  The  learned  trial  court,  in  making  disposition  of  the 
issue  of  law  raised  by  the  demurrer,  seems  to  have  based  its  conclu- 
sion ui^on  the  ground  that  the  complaint  did  not  plead  an  equitable  cause 
of  action,  for  the  reason  that  the  plaintiff  had  no  lien  upon  the  fund  in 
his  hands,  and  also  because  he  had  an  adequate  remedy  at  law  ;  and, 
further,  that  the  complaint  could  not  he  sustained  as  an  action  at  law  to 
recover  for  services  rendered  without  disregarding  the  substantial  aver- 
ments of  the  complaint  and  the  prayer  for  relief.  It  is  not  necessary,  in 
support  of  the  conclusion  at  which  we  have  arrived,  to  determine  wheth- 
er the  averments  of  the  complaint,  coupled  with  the  prayer  for  relief, 
state  a  legal  cause  of  action  or  not.  Nor  is  it  absolutely  essential  to  the 
maintenance  of  an  equitable  action  for  the  relief  demanded  in  this  com- 
plaint that  there  should  exist  a  lien  upon  the  fund  in  plaintiff's  hands. 
It  is  clear,  from  the  averments  of  the  complaint,  that  the  plaintiff  has 
established  that  there  existed  between  himself  and  the  defendants  the 
relation  of  principal  and  agent  of  such  a  character  as  constituted  the 
plaintiff  a  quasi  trustee  for  the  defendant,  and  such  relation,  within 
the  doctrine  announced  in  Marvin  v.  Brooks,  94  N.  Y.  71,  would  have 
entitled  the  defendants  to  maintain  an  equitable  action  to  procure  an 
accounting  of  the  plaintiff's  acts  in  dealing  with  the  trust  funds  intrusted 
to  his  care  and  management.  While  it  is  true  that  the  existence  of  a 
bare  agency  is  not  suf^cient  upon  which  the  equitable  jurisdiction  of  the 
court  can  be  invoked,  yet  where  the  agent's  duties  are  fiduciary  in  char- 
acter, and  involve  a  dealing  with  trust  funds,  he  is  regarded  in  the  law 
as  a  quasi  trustee,  and  may  be  called  to  account  in  a  court  of  equity  for 
his  management  of  the  trust  fund ; "  and  in  such  action  judgment  may 
pass  determining  the  respective  rights  and  liabilities  of  the  parties  there- 
to, and  adjusting  the  respective  interests  of  the  parties  in  and  to  the  trust 

s  The  facts  and  the  rest  of  the  opinion  are  on  p.  G48. 

»  When  the  agency  is  fiduciary,  and  especially  if  the  legal  relief  and  mode 
of  obtaining  it  is  less  eflicient,  then  the  jurisdiction  in  equity  attaches  in  a 
suit  by  the  agent  against  the  principal,  llapgood  v.  Berry,  157  Fed.  807,  85 
C.  C.  A.  171  (1907). 

As  to  the  agent'.s  remedy  in  law  against  the  principal,  see  ante,  p.  605  ff . ; 
also.  Ribl)  V.  Alien,  149  U.  S.  481,  i:^,  Sup.  Ct.  950,  37  L.  Ed.  819  (189:j) ;  Hill 
V.  Thompson.  2  Moore,  C.  P.  420,  8  Taunt.  371,  4  Eng.  Ch.  189  (1818). 

As  to  actions  by  the  third  jw-rson  against  the  agent,  see  p.  650  ff. ;  by  the 
third  person  against  the  principal,  see  p.  724  ff. 


Ch.  2)  THE    PARTIES   TO   THE    ACTION  819 

fund.  In  the  present  case  the  complaint  avers  in  terms  that  the  plain- 
tiff acted  for  the  defendants  as  agent,  factor,  and  manager,  and  this 
averment  is  accompanied  by  facts  showing  wherein  and  how  he  man- 
aged the  estate  of  the  defendants ;  that  from  time  to  time  he  rendered 
to  them  accounts  of  the  conduct  of  the  business,  and  from  time  to  time 
paid  over  money  to  the  defendants  arising  out  of  such  business,  and 
that  there  has  never  been  a  final  settlement  and  adjustment  of  accounts 
between  the  parties ;  that  in  the  course  of  such  business  the  plaintiff 
has  advanced  money  for  expenses  connected  with  his  management  of 
the  defendants'  property,  for  which  he  has  not  been  paid ;  and  that  the 
reasonable  value  of  his  services  is  a  specified  sum,  for  which  he  asks  to 
be  allowed.  The  authority  which  we  have  cited  is  clearlv  decisive  of 
the  proposition  that  the  defendants  could  maintain  an  equitable  action 
for  an  accounting  based  upon  these  facts.  If  the  defendants  could 
maintain  such  an  action,  then  it  must  follow  that  the  plaintiff  has  the 
reciprocal  right  to  also  maintain  an  action  for  the  same  purpose,  as  it 
would  be  clearly  obnoxious  to  every  principle  of  equity  to  hold  that 
one  party  might  invoke  the  aid  of  equity  and  that  the  other  could  not, 
although  the  rights  and  liabilities  of  each  were  governed  bv  and  arose 
out  of  the  same  transaction.  It  is  quite  evident  that  the  complaint  is  in- 
artificially  drawn,  but  such  fact  does  not  defeat  the  plaintiff's  rights  in 
the  premises,  and  furnishes  no  ground  for  a  demurrer  to  his  comi)laint. 
Enough  appears  to  show  the  right  tc  the  equitable  interposition  of  the 
court,  and  this  is  sufficient  to  resist  the  demurrer.  W'ctmore  v.  I'orter, 
92  N.  Y.  76.     *     *     * 


CHAPTER  II 
THE  PARTIES  TO  THE  ACTION 


For  cases  illustrating  actions  by  the  agent  against  the  third  per- 
son, see  p.  701  ff. ;  by  the  third  person  against  the  agent,  p.  ToO  ff. ;  by 
the  principal  against  the  third  i)cr.son,  ante.  p.  791  fl.,  especially  iU-eliee 
V.  Robert,  12  Wend.  413,  27  Am.  Dec.  132.  ante,  p.  792:  by  the  third 
person  against  the  i)rincipal,  ante,  p.  724  ff. ;  by  the  principal  against 
the  agent,  ante,  i>.  50>  fl. ;  by  the  agent  against  his  princii«al,  ante,  p. 
r,05  ff. 


siiO  ACTIONS  (Part  4' 

CHAPTER  III 
EVIDENCE  OF  THE  AGENCY 


SECTION  1.— rRESUMPTION  AND  BURDEN  OF  PROOF 


SCHMIDT  V.  SHAVER. 

(Supreme  Court  of  Illinois,  1902.     196  111,  108,  63  N.  E.  655,  89  Am.  St.  Rep. 

250.) 

In  1894  appellant,  Ida  E.  Schmidt,  by  her  next  friend,  obtained  a 
judgment  against  the  city  of  Chicago  for  $5,000  for  a  personal  injury. 
The  suit  was  prosecuted  for  a  contingent  fee  of  one-fourth  by  a  claim 
corporation,  of  which  one  Beck  was  president.  At  his  suggestion 
Shaver  was  appointed  guardian  of  appellant.  As  appellant  was 
poor,  and  there  was  delay  in  recovering  the  judgment,  the  guardian 
secured  a  court  order  to  sell  it  for  $4,375.  Shaver,  through  Beck, 
sold  to  Perkins,  but  Perkins  did  not  meet  his  agreement,  and  Shaver 
left  the  assignment  in  a  vault  of  the  Claim  Company  with  some  oth- 
er papers  he  had  there.  Beck  took  the  assignment  from  the  vault 
and  delivered  it  to  Perkins,  receiving  a  check  made  out  to  himself. 
The  judgment  was  further  assigned  several  times,  finally  coming  into 
the  hands  of  Pearson,  one  of  the  appellees.  Shaver  heard  no  more 
about  it,  and  had  none  of  the  proceeds.  They  were  misappropriated 
by  Beck.  Appellant  came  of  age,  and  on  finding  what  had  been 
done,  brought  a  bill  in  equity  to  set  aside  all  the  assignments.  Her 
bill  was  dismissed  for  want  of  equity  and  she  appealed. 

CarTwright,  J.i  *  *  *  The  judgment  could  not  be  collected 
at  the  time,  and  the  court,  which  had  general  supervision  of  the 
guardian,  found  that  the  price  offered  was  a  good  one  under  the  cir- 
cumstances. We  think  the  probate  court  had  a  right  to  authorize  the 
sale  of  the  judgment  at  what  it  found  to  be  its  actual  value.  The 
guardian,  however,  never  carried  out  the  order  of  the  probate  court, 
and  never  delivered  the  assignment  to  Perkins,  unless  Beck  was  his 
agent  to  make  the  delivery.  The  rights  of  Perkins  and  the  subse- 
quent assignees  must  depend  upon  establishing  an  agency  in  Beck  to 
make  the  delivery  and  receive  the  payment.  Upon  that  question,  the 
burden  of  proof  was  upon  the  defendants,  who  affirmed  the  existence 

1  Part  of  the  opinion  Ls  omitted. 


Ch.  3)  EVIDENCE   OF    THE   AGENCY  821 

of  the  relation   of  principal  and  agent  between   the   guardian  and 
Beck.f 

There  is  no  presumption  of  Beck's  authority,  and  one  who  claims 
the  benefit  of  a  contract  made  through  an  agent  has  the  burden  of 
proof  when  the  alleged  agency  is  denied.  In  order  to  prove  the 
agency,  the  defendants  were  bound  to  prove  an  appointment,  either 
express  or  implied  from  the  circumstances,  or  that  the  guardian  held 
Beck  out  as  his  agent,  with  authority  to  make  the  deliverv  and  re- 
ceive the  payment.  Perkins  had  notice  that  Beck  was  not  the  own- 
er of  the  judgment,  and  was  not  entitled  to  the  proceeds,  but  that 
they  belonged  to  the  guardian,  and  that  Beck  could  only  receive 
them  as  agent  for  the  guardian,  and  it  was  therefore  incumbent  on 
him  to  ascertain  what  Beck's  authority  was.  The  guardian  never 
authorized  Beck  to  deliver  the  assignment  or  receive  payment,  and 
never  knew  of  the  act  until  it  was  discovered  after  his  discharge, 
shortly  before  this  suit  was  begun.  The  filing  of  the  assignments 
with  the  clerk  of  the  court  did  not  operate  as  constructive  notice  to 
the  guardian  or  appellant.  They  were  not  required  to  be  recorded, 
and  were  not  contemplated  by  the  statute  as  public  records,  and 
would  not  amount  to  constructive  notice  to  anv  one.  Wade,  Notice, 
§  119;  Bourland  v.  Peoria  Co.,  16  111.  538;  Betser  v.  Rankin.  77  111. 
289.  The  guardian  never  received  any  part  of  the  proceeds,  and  never 
ratified  the  sale  or  the  act  of  Beck  in  any  manner.  The  mere  fact 
that  Beck  assumed  to  act  as  agent  in  delivering  the  assignment  and 
receiving  the  payment,  without  the  knowledge  or  subsc(|uent  ratifica- 
tion of  the  guardian,  was  not  sufficient  to  prove  the  agency.  It  is 
beyond  question  that  the  guardian  never  held  Beck  out  as  having 
authority  to  receive  payment,  unless  it  was  by  the  single  act  of  leav- 
ing the  assignment  for  safe-keeping  in  the  vault  of  a  corporation  of 

t  The  onus  proband!  rest.s  on  the  person  setting  up  an  iiKcncy.  imt  only  as 
to  the  faft  of  the  aRcncy,  Imt  also  as  to  the  .si-ope  of  the  authorilv.  R-iker 
&  Co.  V.  Kellett  Chatham  .Ma<h.  Co.  (Tex.  Civ.  App.)  St  S.  \V.  C.r.l  U!H».7i: 
Clark  V.  .Ionian.  .'{;">  W.  Va.  7.'.."».  14  S.  10.  'ITyTy  (1S!»1).  The  lainleii  of  proof 
rests  upon  the  |iarty  who  asserts  the  agency,  whether  he  he  tiie  lliird  person. 
Ward  V.  'J'rustees  M.  K.  Church,  '11  U.  I.  'IVCl,  (il  ,\tl.  (iol  (liMC)).  or  the  ap-nt 
who  is  sued  jiersonally,  and  who  seeks  to  escape  hy  proof  that  lie  aefed  an 
n«ent,  Miller  v.  Stoek.  li  Halley,  ](J.'{  (1H;{1);  (Jlllaspie  v.  Wes.s.)ii.  7  Tort.  l.'J. 
;{1  Am.  Dee.  71  n  (18."i.S). 

The  weiu'lit  of  evidenep  need  not  ho  stroni;  to  npliold  a  (Indlne  l)y  a  Jury 
cf  aueney.  .\ohle  v.  r.urney,  IL'l  Ca.  JHKt.  r^{  S.  K.  Ul'S  d'.KMIi.  It  is  enouirli 
if  the  faets  proved  show  that  su<li  was  the  umlerstandlim  of  the  parlies,  hull 
V.  Dunihauld,  7  Kan.  .\pp.  .■;7<i.  HI  Tac.  \\'.'A\  (ls!»S(.  ilut  If  thi-  presumptions 
are  (Hjual,  \\w  iiro(»f  of  the  au'eiiey  falls.  Kelly  v.  ICi^tates  of  Strong:.  r».s  Wis. 
I.',:.',  .'.i  N.  w.  7l.'l  (1VN7);  Ward  v.  Trustees  M.  V..  Church.  '11  \K.  I.  'Jil'j.  Cl 
Atl.  y't'A  (lIMtij).  I'roof  of  the  anenr-y  must  l»e  «'lear  and  fleilslve.  Proudfoot 
V.  Wi..'hlnian.  7«  111.  nH-'J  (lN7r»).  If  tipon  all  the  facts  the  Jury  are  In  douht. 
the  verdift  must  he  auainst  the  au'eney.  Heals  v.  Merrlani,  11  .Melc.  (.Mass.1 
•17t)  llspii.  This  Is  the  more  so  If  the  facts  are  Ininnslstent  with  the  at'cncy. 
Stratton  v.  Todd.  SL'  Me.  1  l!»,  H>  Atl.  Ill  (issjh.  Tlie  lmpurlan<e  of  this  rule 
as  ti<  the  iPiHi'^  pmliaiuli  is  well  set  forth  in  the  celelualrd  dl'-sentiim  ojilnlon 
of  Lord  Cranworth  In  Tole  v.  Leiisi.  .■;::  j,  .i  ci,  i:.:.  -i  .rm-  \  s.  820,  8 
L.  T.  t;45  (ISOL'K  ante  p.  49. 


Si.'2  ACTIONS  (Part  4 

which  Bock  was  the  manager,  and  the  only  reason  Perkins  had  for 
assuming  that  Beck  was  the  agent  of  the  guardian  was  that  he  had 
possession  of  the  assignment.  Beck  was  not  an  attorney  or  broker, 
and  the  sale  of  judgments  was  not  within  the  scope  of  the  usual 
business  carried  on  by  him  from  which  an  inference  of  authority 
might  arise.  It  is  true  that,  where  a  person  has  possession  of  a 
promissory  note  which  is  due  and  payable,  it  may  be  inferred  that 
he  has  authority  to  receive  payment  of  it  (Stiger  v.  Bent,  111  III. 
328) ;  but  authority  to  receive  payment  cannot  be  inferred  from  pos- 
session when  the  paper  is  not  due  (Fortune  v.  Stockton,  182  111.  454, 
55  N.  E.  367),  and  the  mere  possession  of  personal  property  does 
not  generally  authorize  an  inference  of  power  as  agent  to  sell  it  and 
receive  the  proceeds.  So  far  as  appears  Perkins  made  no  inquiry  as 
to  Beck's  authority,  but  from  the  mere  possession  of  the  paper  dealt 
with  him  and  paid  with  a  check  payable  to  the  order  of  Beck.  He 
thereby  put  it  in  the  power  of  Beck  to  misapply  the  proceeds  and  de- 
fraud the  guardian.  He  might  have  protected  himself  by  inquiry, 
or  by  making  the  check  payable  to  the  order  of  the  guardian.  There 
was  no  previous  course  of  dealing  recognized  or  acquiesced  in  by  the 
guardian  from  which  authority  could  be  inferred,  and  no  other  rela- 
tion out  of  which  an  agency  ordinarily  arises,  and  we  cannot  regard 
the  alleged  agency  proved  by  the  mere  fact  that  Beck  had  posses- 
sion of  the  assignment. 

Neither  was  there  any  evidence  that  the  guardian  held  Beck  out  as 
his  agent  with  authority  to  make  the  delivery  and  receive  the  pro- 
ceeds. Where  one  party  holds  another  out  as  his  agent  with  au- 
thority to  do  an  act,  he  is  bound  by  the  act  of  the  agent  on  the 
ground  of  estoppel.  The  guardian  left  the  assignment  with  the  cor- 
poration merely  for  safekeeping,  and  Beck  possessed  himself  of  it 
wrongfully,  and  delivered  it  in  fraud  of  the  rights  of  the  guardian  and 
appellant.  Beck  knew  that  he  had  no  authority  to  deliver  the  as- 
signment, as  is  clearly  shown  by  his  conduct.  He  told  the  guardian 
eight  months  after  he  had  received  the  proceeds  that  there  was  no 
prospect  of  selling  the  judgrnent,  and  kept  informing  appellant  and 
her  mother  that  the  judgment  would  probably  be  paid  to  them 
some  time  in  the  future.  The  transaction  by  Beck  was  fraudulent, 
and  it  was  essential  for  defendants  to  show  that  Perkins  believed  in 
the  existence  of,  and  relied  upon,  the  agency  and  authority  of  Beck, 
and  that  he  had  no  notice  of  the  fraud.  It  was  agreed  by  counsel 
that  Pearson  would  testify  that  he  purchased  the  judgment  from  Mc- 
Bean  in  good  faith  and  for  value,  and  with  no  knowledge  of  any  de- 
fect in  Mc Bean's  title,  and  that  he  was  advised  of  the  state  of  the  rec- 
ord. There  was  no  evidence  on  the  same  questions  as  to  Perkins, 
the  only  evidence  being  that  he  gave  the  check  payable  to  the  order 
of  Beck  and  received  the  assignment.  The  equities  of  the  ca.se  are 
with  the  appellant,  and,  if  Perkins  did  not  get  title  to  the  judgment, 


Ch.  3)  EVIDENCE    OF    THE    AGENCY  823 

those  claiming  through  him  obtained  none.  The  judgment  was  not 
assignable,  and  all  that  could  be  transferred  was  an  equitable  title. 
Hughes  V.  Trahern,  64  111.  48.  The  alleged  agency  of  Beck  for  the 
guardian  was  not  proved.  There  was  no  express  appointment  or 
authority  conferred  or  intended  to  be  conferred.  There  was  no 
previous  course  of  dealing,  relation  of  the  parties,  usual  employment, 
or  other  circumstances  from  which  an  appointment  could  be  fairly 
implied.  The  guardian  did  nothing  which  ought  to  estop  him  as 
having  held  out  Beck  as  his  agent.  *  *  * 
Reversed  and  remanded. 


WISCONSIN  BANK  v.  MORLEY  ct  al. 
•  (Supreme  Court  of  Wisconsin,  1SG5.    19  Wis.  02.) 

Action  to  foreclose  a  mortgage,  given  by  one  Aldrich  to  plaintifT. 
Aldrich  was  son-in-law  of  Morley,  and  acted  as  his  agent  in  negotia- 
tions with  one  jSIiller,  president  of  plaintiff  bank,  by  which  Miller 
paid  a  debt  he  owed  Morley  by  conveying  certain  property,  includ- 
ing this  land,  to  Morley.  Aldrich  wrongfully  took  the  deed  in  his 
own  name,  and  gave  Miller  a  mortgage  on  the  land  to  secure  a  loan 
made  to  him  the  same  day  by  the  bank.  Aldrich  intended  to  pay 
the  note  before  it  fell  due,  but  died  without  doing  so.  Judgment  for 
defendant. 

Dixon,  C.  J.2  *  *  *  'Y\]q  admissibility  of  Morley's  testimony 
being  established,  the  merits  of  the  controversy  scorn  less  diflicult. 
There  can  be  no  pretense  that  Aldrich  had  original  authority  from 
Morley  to  execute  the  mortgage.  Indeed  this  is  scarcely  claimed  by 
the  bank.  The  conversation  of  Morley  and  his  recommendations  to 
Miller  at  the  time  he  introduced  Aldrich  in  the  summer  of  1S59, 
amount  to  nothing  by  way  of  establishing  such  authority.  They 
were  mere  general  words  of  commendation,  employed  on  occasion 
of  the  introduction  of  a  stranger,  and  not  intended  nor  understood  as 
the  grant  of  authority.  Miller,  who  represents  the  bank  throughout 
the  transaction,  took  the  mortgage  knowing  that  Aldrich  was  not 
the  owner  and  that  the  proprrty  was  Morley's.  He  took  it  without 
the  slightest  evidence  that  Al<hich  was  authorized  by  Morley  to  exe- 
cute it  It  turns  out  upon  trial  that  Aldrich  had  no  such  authority. 
So  far  then  the  mortgage  was  void  as  against  Morley.  and  the  only 
ground  upon  which  it  can  be  sustained  is  that  taken  by  counsi-j, 
namely,  that  Morley  subse(|uently  actjuicsced  in  ati<l  ratified  it.  I'p- 
on  this  p(jint  it  is  urged  tliat  Miller,  in  Sci)lcml)er,  ISol.  notifu-il 
Morley  that  he  had  made  the  loan  and  taken  the  mortgage,  and  that 
Morley  waited  until  September.  1S<')2.  before  repudiating  it,  or  in- 
forming Miller  that  Aldrich  acted  without  authority.  If  it  be  ad- 
mitted that  the  case  is  one  where  mere  silence  on  the  part  of  Morley, 

'  r.nrt   rif  tlio  njiliiini)   Is  oiiiltlffl. 


824  ACTIONS  (Part  4 

after  notice  from  T^Iillcr,  woukl  constitute  a  ratification,  still  I  do  not 
think  there  is  any  proof  to  warrant  the  application  of  the  doctrine;. 
Morlev,  who  admits  the  receipt  of  Miller's  letter  in  September,  1861, 
testifies  to  nothing  of  the  kind.  True,  he  says  he  wrote  to  Aldrich 
for  information  respecting  it,  l)ut  he  does  not  say  that  he  did  not 
replv  to  Miller.  Neither  does  Miller,  himself  a  witness,  testify  that 
Morlev  neglected  to  answer,  or  that  Morley  first  informed  him  of 
Aldrich's  want  of  authority  in  September,  1862.  Counsel  seem  to 
assume  the  fact  because  in  the  series  of  letters  which  passed  be- 
tween Morley  and  IMiller,  and  which  were  introduced  on  the  part  of 
the  bank,  the  first  in  which  Morley  denies  the  validity  of  the  mort- 
gage was  dated  in  Septeml^er,  1862.  But  it  is  obvious  that  the  let- 
ters introduced  were  not  all  which  passed  between  the  parties.  Of 
those  introduced,  the  first  from  Morley  by  no  means  indicate  that  he 
had  been  slow  in  repudiating  the  mortgage.  On  the  other  hand  it 
is  fairly  to  be  inferred  from  them,  not  only  that  he  had  replied  to 
Miller's  first  communication,  but  that  he  had  informed  him  that  the 
mortgage  was  invalid.  He  speaks  of  the  claim  as  one  which  must 
be  collected  from  Aldrich's  estate.  And  his  letter  of  September, 
1862,  was  written  in  answer  to  one  from  Miller  of  the  first  of  the 
same  month.  Again,  Miller's  letters  tend  to  the  same  conclusion. 
In  that  of  June  11th,  1862,  he  writes  for  advice  as  to  what  is  tlien  to 
be  the  course  taken  in  regard  to  Aldrich's  afifairs  in  Madison.  This 
by  no  means  indicates  that  Morley  had  kept  silence,  or  that  he  had 
acquiesced  in  or  acknowledged  the  validity  of  the  mortgage.  But 
aside  from  this  criticism  upon  the  correspondence,  I  hold  that  the 
fact  of  ratification,  if  ratification  there  was,  should  be  as  clearly  made 
out  in  evidence  as  that  of  original  authority,  in  case  the  bank  had 
relied  upon  that.  In  either  case  the  burden  of  proof  is  upon  the 
bank.^  If  Morley  did  not  reply  to  IMiller  for  the  space  of  a  year, 
or  if,  replying,  he  did  not  deny  Aldrich's  authority  or  admitted  it,  the 
fact  was  one  susceptible  of  clear  and  easy  proof,  arid  should  have 
been  placed  in  clear  light  before  the  court.  Miller  was  upon  the 
stand.  He  could  have  testified  to  it  or  produced  the  letters.  Mor- 
ley was  upon  the  stand,  and  he  also  might  have  reen  questioned. 
But  instead  of  this,  no  question  of  the  kind  was  p::t  to  either,  and 
I  think  there  is  no  evidence  in  the  case  authorizing  T'^e  assumption  of 
the  counsel,  and  that  the  judgment  should  be  afifirr.ied. 

8  Thf  burrlen  of  showing  ratification  is  on  liiin  who  ;  elies  on  it.  Moore 
V.  Ensley,  112  Ala.  228,  20  South.  744  (1896);  Combs  '  Scott,  12  Allen,  493 
(186GJ. 


Ch.  3)  EVIDENCE    OF    THE    AGENCY  825 

SECTION  2.— ADMISSIBILITY 
I.  In  Generai, 


LAWRENCE  v.  WINONA  &  ST.  P.  R.  CO. 
(Supreme  Court  of  Minnesota.  1870.     15  Minn.  .390  [(iil.  .313],  2  Am.  Rep.  1.30.) 

Action  for  five  boxes  of  household  goods  destroyed  by  fire  in  de- 
fendant's warehouse  at  Waseca.  The  goods  were  shipped  from  Wi- 
nona and  were  consigned  to  Alankato.  It  was  the  custom  to  carry  via 
defendant's  hne  to  Waseca  and  thence  by  team  to  Mankato.  The 
team  line  was  operated  by  one  Phelps  under  an  agreement  with  de- 
fendant that  if  he  would  run  the  team  line  they  would  give  him  all 
Mankato  freight  from  their  western  terminus,  Waseca. 

Ripley,  C.  J  *  *  *  *  The  evidence  of  Phelps'  manner  of  doing 
business  at  Mankato  should  have  been  excluded.  Unless  he  was  the 
defendant's  agent  it  was  irrelevant ;  and  before  the  act  of  B.  can  be 
given  in  evidence  as  the  act  of  A.  it  must  be  proved  that  B.  was  the 
agent  of  A.  Stark,  pt.  4,  p.  55.  The  plaintiflf  claims,  indeed,  that  the 
evidence  in  question  itself  tends  to  prove  this ;  but  the  agency  of  a 
party  must  be  proved  from  other  evidence  than  his  acts  before  it  can 
be  shown  that  his  acts  are  binding  upon  his  alleged  principal.  Scott  v. 
Crane,  1  Conn.  255.  B.'s  authority  to  act  for  A.  may  Ix-  inferred  from 
the  habit  and  course  of  dealing  of  A.  and  B.,  but  not  of  B.  alone,  even 
though  his  acts  be  done  in  A.'s  name.  Stark,  pt.  4,  pp.  55.  59.  In  this 
case  Phelps  did  not  assume  to  act  in  the  name  of  the  defendants. 
Plaintifif  would  infer  Phelps'  agency  from  the  fact  that  the  way-bill, 
which  he  usually  left  with  the  goods,  was  signed  by  defendants'  freight 
agent,  and  included  a  charge  for  team,  as  well  as  railroad  charges. 

The  leaving  of  the  way-bill  was  Phelps*  act;  its  delivery  to  him  was 
the  act  of  defendants'  freight  agent.  (Jn  its  face  it  i)urports  to  be  for 
transportation  to  Waseca  only,  and  its  delivery,  receipted  by  the  sta- 
tion agent  to  Phelps,  (it  appearing,  according  to  the  evidence  intro- 
duced by  plaintifT  himself  that  the  freiglit  was  delivered  to  Phelps  by 
the  station  agent  upon  his  receipting  therefor  ajid  either  paying  or  be- 
coming personally  resjMUisible  to  defendants  for  the  freiglit  money  and 
back  charges  due  them,)  tends  of  itself  to  prove  that  such  goods  and 
way-bill  were  delivered  to  him  not  as  defendants'  cnipl<»ye,  but  as  the 
agent  of  the  consignees.  It  apjK-ars.  however,  that  these  way-bills  usu- 
ally, but  not  always,  inclu«led  a  charge  for  "team."  ad<lilional  to  de- 
fendants' dues,  which  is  said,— though  of  this  there  is  no  proof,— to  be 
for  hauling  from  Waseca  to  Mankato.    Whether  adde.l  by  the  freight 

*  Tart  of  tlnj  niiininn  Is  «iiiilftf<l. 


826  ACTIONS  (Part  4 

agent,  and  if  so.  at  whose  direction  or  request,  or  by  Pheli^s  himself, 
does  not  appear ;  but.  at  all  events,  there  is  no  inference  from  the  cir- 
cumstances that  Thelps  received  the  bill  as  defendants'  agent,  to  col- 
lect the  amount  for  them  and  on  their  account,  for  plaintiff  has  him- 
self introtluccd  positive  testimony  that  the  defendants  had  no  interest 
in.  nor  received  any  part  of  the  moneys  received  on  the  transportation 
of  freight  between  Waseca  and  Mankato.  The  evidence  of  I'almer 
was  inadmissible  for  the  further  reason  that  he  testified  only  to  facts 
occurring  after  the  fire ;  Phelps'  way  of  doing  business  at  Mankato  in 
May  could  have  no  tendency  to  prove  what  it  was  in  March.  Mead's 
declarations,  though  of  themselves,  indeed,  they  rather  go  to  show  that 
defendants  had  no  control  over  the  rates  of  freight  between  Waseca 
and  Mankato,  yet  were  inadmissible  in  any  view.  They  did  not  tend 
to  prove  any  contract  with  plaintiff  or  any  usage  of  defendants.  There 
is  no  evidence  either  that  the  matters  in  question  were  within  the  scope 
of  his  agency  or  that  the  declarations  were  in  regard  to  a  transporta- 
tion then  depending  so  as  to  be  a  part  of  the  res  gestae.  1  Greenl.  Ev. 
subd.  113. 

We  think,  however,  that  there  is  competent  evidence  in  the  case 
tending  to  show  that  Phelps  was  an  independent  common  carrier.  In 
that  case  defendants  were  intermediate  carriers  between  Fort  Howard 
and  Mankato.  If  they  were,  were  they  under  any  responsibility  to 
plaintiff  at  the  time  of  said  fire,  in  respect  of  such  goods?  If  so,  what 
was  it?     *     *     * 

The  Court  found  that  defendants  were  liable  as  common  carriers  un- 
til the  goods  were  delivered  to  Phelps,  and  on  this  ground  affirmed  the 
judgment  of  the  district  court. 


LYONS  V.  THOMPSON. 

(Supreme  Court  of  Iowa,   1SG4.     16   Iowa,  62.) 

Wright,  C.  J.°  Plaintiff  seeks  to  recover  for  the  value  of  certain 
goods  delivered  to  A.  B.  Olmsted  &  Co. 

Upon  the  trial,  certain  orders  were  introduced,  signed  by  Boyles  and 
others,  and  defendants  objected  to  their  introduction  for  the  reason 
that  they  were  not  signed  by  Olmsted  &  Co.  Plaintiff  thereupon  of- 
fered to,  and  did  prove  by  parol,  that  the  persons  signing  said  orders, 
in  giving  the  name,  acted  for  and  as  the  agents  of  said  company.  This 
testimony  was  objected  to,  upon  the  ground  that  as  the  agency  did  not 
appear  upon  the  face  of  the  orders,  and  the  principal  was  not  dis- 
closed, the  testimony  was  incompetent;  and  the  admission  of  this  tes- 
timony is  the  first  error  demanding  our  attention. 

That  the  authority  of  an  agent,  except  in  special  cases,  may  be 
shown  by  parol,  cannot  admit  of  doubt.    2  Greenl.  §  61.    The  case  be- 

5  Part   of  tlif*  opinion  Is  omitted. 


Ch.  3)  EVIDENCE    OF    THE    AGENCY  827 

fore  us  does  not  fall  within  any  of  the  exceptions.  Not  only  so,  but 
the  appellants  mistake  the  application  of  the  rule  for  which  they  con- 
tend. The  question  is  not,  whether  the  persons  signing  the  orders 
might  not  be  made  liable  personally  for  the  goods  delivered  thereon, 
but  whether  it  can  be  shown  by  parol  that  they  were  acting  at  the  time 
as  the  clerks  or  agents  of  and  for  Olmsted  &  Co. 

If  an  individual  is  in  the  habit  of  giving  orders  or  directions  in  re- 
lation to  the  delivery  of  goods  or  any  thing  else  by  a  clerk,  there  is  no 
rule  violated  in  allowing  the  fact  of  agency  to  be  shown  by  parol. 
The  question  is,  were  the  goods  delivered  to  or  for  a  particular  person. 
To  establish  such  delivery,  and  the  person  for  whom  delivered,  it  is 
an  every  day  practice  almost,  to  show  for  whom  the  person  ordering 
them  was  acting,  if  a  question  of  agency  arises.  Story  on  Agency, 
§  50.     *     *     *     Affirmed. 


DICKINSON  V.  SALMON. 

(Supreme  Court  of  New  York,  Appellate  Term,  1001.     .in  Misc.  Rop.  1G9, 
73  N.  Y.  Supp.  196.) 

McAdam,  J.  The  plaintiff,  a  plumber,  did  and  performed  work  and 
furnished  material  in  making  repairs  to  the  houses  known  as  Nos.  57 
and  59  West  Seventy-First  street  and  No.  132  West  Eighty-lMfth 
street,  in  the  city  of  New  York,  between  January  and  March,  1896,  of 
the  value  of  $136.38.  The  order  for  the  work  and  material  was  given 
by  one  Frank  Yoran,  and  the  main  question  litigated  at  the  trial  was 
whether  Yoran  had  authority  to  give  the  order  ami  bind  the  defendant 
thereby. 

It  was  conceded  that  Yoran  was  the  agent  employed  to  collect  the 
rents,  and  that,  according  to  the  custom  of  agents,  he  made  out  writ- 
ten statements  every  month  to  his  principal,  giving  the  amoiuU  of  rents 
collected,  the  commissions  for  collection,  and  the  repairs  to  the  houses, 
and  after  derlucting  these  a  check  was  made  out  by  Yoran,  for  the  l)al- 
ance,  to  the  individual  name  of  the  defendaiU,  who  deposited  the  same 
in  his  bank.  For  live  years  these  statements  and  checks  were  sent  to 
and  received  by  the  defendant,  the  checks  being  indorsed  and  deposited 
to  his  credit.  He  never  at  any  lime  objected  that  the  checks  were  not 
properly  made  out,  or  that  Yoran  had  no  authority  to  contract  bills 
for  repairs.  This  evidence  was  sufficient  to  rc<|iiirc  tlie  submission  of 
the  question  of  agency  and  authority  to  the  jury.  It  was  .m>  submitted, 
and  the  jury  found  that  Yoran  had  the  required  authority,  and  ren- 
dered a  verdict  in  favor  of  the  plaintiff. 

It  is  impossible  to  lay  down  any  inflexible  rule  by  which  it  can  bo 
determined  what  evidence  is  sufficient  to  establish  agency  in  atiy  given 
case,  but  it  may  be  said,  in  general  terms,  that  whatever  evidence  has 
a  tendency  to  prove  agency  is  admissible,  even  though  it  be  not  full  and 
satisfactory,  as  it  is  the  |)r<ivince  of  the  jury  to  [)ass  ujxmi  it.     Mcchem. 


§28  ACTIONS  (Tart  4 

Ag.  §  106.  Authority  is  often  implied  from  the  recognition  of  the 
principal  or  his  acciuiescence  in  tlie  acts  of  the  agent  (Story,  Ag.  §§  54, 
55;  2  Greenl.  Ev.  [Redf.  Ed.]  §  65;  Cow.  Treat.  [Kingsley's  Ed.]  §§ 
154,  242).  as  well  as  from  circumstances  (In  re  Zinke,  90  Hun,  127, 
35  N.  Y.  Supp.  645).  Thus,  where  one  is  accustomed  to  permit  his 
wife,  child,  or  servant  to  i)urchase  goods  on  his  account,  all  purchases 
so  made  will  he  deemed  authorized,  and  he  will  he  hound  to  pay  for 
them.  Cow.  Treat.  §  242.  And  see  Olcott  v.  Tioga  R.  Co.,  27  N.  Y. 
546,  84  Am.  Dec.  298;  Svkes  v.  Temple,  69  Hun,  448,  23  N.  Y.  Supp. 
425';  Lowenstcin  v.  Lom'bard,  Ayres  &  Co.,  164  N.  Y.  324,  58  N.  E. 
44;  Wood,  Mast.  &  S.  §  260.  The  argument  by  which  the  defendant 
seeks  to  avoid  the  application  of  these  rules  is  unavailing. 

We  find  no  errors  prejudicial  to  the  appellant,  and  the  judgment 
and  order  must  be  affirmed,  with  costs.    All  concur. 


SHARP  V.  KNOX. 
(Kansas  City  Court  of  Appeals,  Missouri,  1S92.    48  Mo.  App.  1G9.) 

Suit  in  equity  for  cancellation  of  a  certain  deed  of  trust  and  the  sur- 
render of  a  certain  promissory  note  secured  thereby.  The  evidence 
consisted  of  an  extensive  correspondence  between  Craig  and  defendant 
as  to  this  and  other  similar  business  transactions. 

Smith,  P.  J.s  *  *  *  The  undisputed  evidence  is  that  on  Feb- 
ruary 15,  1888,  Craig  loaned  for  Knox  to  plaintiff  $750,  taking  a  note 
therefor,  payable  to  Knox  on  or  before  three  years  after  date.  Plain- 
tiff executed  a  deed  of  trust  on  his  land  to  secure  the  note.  Craig  told 
plaintiff  at  the  time  of  the  execution  of  the  note  that  it  could  be  paid 
at  his  office.  The  note  and  deed  of  trust  were  sent  to  Knox.  On 
March  15,  1888,  plaintiff  through  Craig  secured  another  loan  from  an- 
other capitalist,  by  giving  his  note  and  deed  of  trust  on  his  land  for 
the  same ;  out  of  this  last-named  loan  he  paid  off  to  Craig  the  Knox 
note.  Craig  then  told  plaintiff  that  he  would  give  him  a  receipt  against 
the  note  and  mortgage,  which  he  accordingly  did ;  he  further  then  told 
plaintiff  that  he  did  not  then  have  the  note  in  his  possession,  but  would 
send  back  to  Knox  and  get  it.  The  matter  thus  remained  until  Craig 
failed,  when  it  was  discovered  that  Knox  still  held  plaintiff's  note,  and 
that  the  deed  of  trust  had  not  been  satisfied  on  the  record. 

The  decisive  question  presented  for  our  determination  is  that  of 
agency,  whether  Craig  was  authorized  to  collect  of  the  plaintiff  the 
note  given  by  him  to  Knox  while  it  was  in  the  latter's  possession.  The 
rule  is  elemental  that  agency  is  directly  proven  by  express  words  of 
appointment,  whether  orally  uttered  or  contained  in  some  deed  or  oth- 
er writing.  It  is  directly  established  by  evidence  of  the  relative  situa- 
tion of  the  parties,  or  of  their  habits  and  course  of  dealing  and  inter- 

«  Part  of  the  opinion  is  omitted. 


Ch.  3)  EVIDENCE    OF    THE    AGENCY  829 

course,  or  is  decided  from  the  nature  of  the  employment  or  from  sub- 
sequent ratification.  Greenl.  Ev.  §  60.  An  agency  may  be  created  by 
the  express  words  or  acts  of  the  principal,  or  it  may  be  implied  from 
his  conduct  and  acquiescence ;  so  the  nature  and  extent  of  the  author- 
ity of  an  agent  may  be  implied  or  inferred  from  circumstances.  If  the 
agency  arises  by  implication  from  numerous  acts  done  by  the  agent 
with  the  tacit  consent  or  acquiescence  of  the  principal  it  is  deemed  lim- 
ited to  acts  of  like  nature.  Story  on  Agency,  §§  45,  97.  It  has  been 
m  effect  repeatedly  held  in  this  state  that  agency  and  the  scope  of  an 
agent's  authority  are  facts  to  be  proved  like  other  facts.  They  may 
be  proven  by  the  transactions  that  have  taken  place  between  the  princi- 
pal and  the  agent,  showing  what  the  understanding  was  as  to  the  scope 
of  the  agent's  authority;  evidence  of  a  course  of  dealing  by  an  agent 
sanctioned  by  his  principal  is  one  of  the  recognized  modes  of  proving 
the  extent  of  an  agency ;  and  such  evidence  is  admissible  whether  the 
party  introducing  it  knew  at  the  time  of  the  transaction  in  contro- 
versy, that  the  dealings  had  taken  place  or  not.  Gibson  v.  Zeibig,  24 
Mo.  App.  65 ;  Greeley-Burnham  Grocery  Co.  v.  Capen,  23  Mo.  App. 
301 ;  Wheeler  v.  Metropolitan  Co.,  23  Mo.  App.  190;  Brooks  v.  Jame- 
son, 55  I\Io.  505 ;  Franklin  v.  Globe,  52  Mo.  461 ;  Edwards  v.  Thom- 
as, 66  Mo.  468.  In  the  last-cited  case  it  is  said.  "Instances  there  are 
without  number  to  be  found  in  books,  when  authorit)'  of  an  agent  to 
act  in  a  given  manner  follows  by  inevitable  implication  from  the  mere 
fact  of  his  employment  or  from  long-continued  and  rci)eated  acts  of 
acquiescence."  In  Mechem  on  Agency,  §  86.  it  is  stated:  "That, 
where  it  appears  the  alleged  agent  has  repeatedly  performed  acts  like 
the  one  in  question  which  the  principal  has  ratified  and  adopted,  his 
authority  for  the  performance  of  the  disputed  act  may  be  inferred. 
And  this  statement  of  the  rule  seems  fairly  supported  by  a  number  of 
adjudicated  cases.  Jewett  v.  Railroad,  10  Ind.  539;  Fisher  v.  Camp- 
bell, 9  Port.  210;  Robinson  v.  Green,  5  liar.  115;  Raw.son  v,  Curtiss. 
19  111.  456:  I'.merson  v.  Cogswell,  16  Me.  77;  Walsh  v.  Pierce.  12  Vt. 
130;  Downer  v.  Morrison,  2  Grat.  237.  When  the  principal  puts  an 
agent  forward  as  gincral  agent,  though  in  a  particular  line,  or  places 
him  in  a  position  where  others  are  justified  in  the  belief  that  his  pow- 
ers are  general,  the  restriction  that  may  bo  imposetl  upon  him  pri- 
vatelv  will  be  immaterial  except  between  him  and  his  principal.  New 
Alhaiiy  v.  Meyers,  43  Mo.  App.  124;  Baker  v.  Railroad.  91  Mo.  152. 
3  S.  W.  486.  And,  when  an  agency  is  shown  to  exist,  the  presumption 
would  be  that  the  agent's  authority  was  general  ratlur  than  limited. 
Mechem  on  Agency.  §  9. 

It  is  conceded  that  Craig  was  the  agent  of  Knox,  but  it  is  insi.stcd 
that  his  powers  as  such  agent  were  special  and  limited.  As  has  al- 
ready been  stated  Craig,  as  the  agent  of  Knox,  made  repeated  collec- 
tions of  the  notes  of  the  latter  while  the  same  were  in  his  possession 
at  his  home  in  Indiana,  an<l  under  precisely  the  same  circumstances 


830  ACTIONS  (Tart  4 

that  tlie  note  in  question  was  collooteil.  and  wliicli  collections  so  made 
were  satislietl  and  adopted  by  Knox.  For  the  performance  of  the  dis- 
puted act  in  this  case  we  think,  under  the  principles  of  law  just  ad- 
verted to,  the  authority  of  Craig  may  be  inferred.  The  authority  of 
Craig,  as  agent  of  Knox,  to  collect  the  note  of  plaintiff  results  by  in- 
evitable implication  from  the  long-continued  and  repeated  acts  of  ac- 
c|uiescence,  to  which  reference  has  been  made.  We  think  the  general 
authority  of  Craig  to  collect  and  otherwise  manipulate  the  Missouri 
loans  of  Knox  is  fairly  deducible  from  the  facts  shown  by  the  evi- 
dence."    *     *     * 

Judgment  for  plainlill  aBirmcd. 


II.  Written  Power 
ELLIOTT  V.  STOCKS.' 

(Supreme  Court  of  Alabama,  ISSO.    67  Ala.  330.) 

Suit  commenced  by  attachment  at  the  instance  of  Stocks  and 
against  Cothran,  Marshall,  McCullough  and  McElwain.  Elliott 
claimed  the  property  in  question  as  trustee  under  a  deed  of  trust  by 
McElwain  given  in  1875  to  secure  large  creditors  of  the  Cornwall 
Iron  Works.  The  Works  had  been  in  straits,  and  on  January  1, 
1874,  was  bid  in  at  a  sale  by  Cothran,  with  the  consent  of  the  cred- 
itors, under  an  agreement  that  he  should  operate  for  the  benefit  of 
the  creditors  and  upon  satisfying  them  he  should  have  the  Works. 

7  It  is  not  necessary  to  establish  every  agency  by  direct  evidence.  It  may 
be  established  by  cirrumstances.  such  as  the  relation  of  the  parties  and  their 
conduft  with  referenoo  to  the  subject  matter  of  the  alleged  contract.  Llnd- 
quist  v.  Dir-kson,  9S  Minn.  369,  107  N.  W.  958,  6  L.  R.  A.  (N.  S.)  729,  8  Ann. 
Cas.  1024  (1900).  ante,  p.  7o8;  Rol)erson  v.  ClevenRer,  111  Mo.  App.  022,  86  S. 
AV.  512  (1905);  Hull  v.  Jone.s,  69  Mo.  587  (1879):  Tonnossee  River  Transfer 
Co.  v.  Kavanaugb.  101  Ala.  1,  13  South.  2S3  (1893).  Or  by  a  lonj;  course  of 
dealins:  by  an  a^ent  for  his  principal  in  which  acts  in  this  line  have  never 
been  ropudiated  l)y  the  principal.  Wheeler  v.  Benton,  67  Minn.  293,  69  N.  W. 
927  as97). 

In  the  nature  of  the  case  greater  latitude  must  be  allowed  in  the  admission 
of  evidence  to  prove  an  implied  agency  tlian  in  the  case  of  an  express  agency. 
I'atter.son  v.  Van  Ixjon,  18()  Pa.  367,  40  Atl.  495  (189S). 

»  Accord :  Loudon  Savings  Fund  Society  v.  Ilagerstown  Savings  Bank,  36 
Pa.  498,  78  Am.  Dec.  390  (1860). 

If  the  writing  cannot  be  produced  its  contents  must  be  clearly  proved. 
Stadleman  v.  Fitzgerald,  14  Neb.  290,  15  N.  W.  234  (1883). 

See,  also,  Claflin  v.  Continental  Jer.sey  Wbrks,  85  Ga.  27,  11  S.  E.  721  (1890), 
ante,  p.  337. 

However,  it  is  competent  to  prove  by  parol  the  situation  of  the  parties  and 
of  the  subject-matter  of  the  agency  at  the  time  it  is  made,  and  the  surround- 
ing circumstances,  not  to  contradict  or  enlarge  the  written  pmver,  but  to  ex- 
plain it  and  its  scope.  Wood  v.  Clark,  121  111.  .359,  12  N.  E.  271  (1887) ;  Brant- 
ley v.  Southern  Life  Ins.  Co.,  53  Ala.  554  (1875).  So,  too,  proof  of  the  usages 
of  trade  may  be  permitted  to  interpret  the  powers  actually  given,  though  not 
to  enlarge  them.  Cawthorn  v.  Lusk,  97  Ala.  674,  11  South.  731  (1892),  ante, 
p.  310. 


Ch.  3)  EVIDENCE    OF    THE    AGENCY  831 

This  agreement  let  in  with  Cothran  the  other  defendants  In  the  at- 
tachment suit.  The  debts  were  not  paid,  and  ElHott  and  Stocks 
both  claim  the  property. 

Stone,  J.«     Alany  of  the  questions  in  this  cause  arc  settled  bv  our 

.'^7^  'onn^'  '^'^  °^  ^"'°"  ""■  ^''''^'  ^  ^^°-'  ^'  the  present 'term 
(67  Ala.  290). 

The  instrument  under  seal  of  January  1st,  1874,  is  the  written  evi- 
dence of  the  contract  by  which  the  defendants  agreed  to  operate  the 
property  known   as   the   Cornwall   Iron  Works,  in  joint  adventure 
Before    that    agreement   was    consummated,    the    ownership   of    the 
property  was  in  Cothran.     That  agreement  let  in  Marshall,  McCul- 
lough,  and  McElwain.     Before  reading  it  in  evidence,  it  was  neces- 
sary to  prove  its  execution.     It  purported  to  be  signed  bv  Cothran 
and  McCullough  in  person,  with  scrolls  for  seals  annexed,   and  the 
signature   for  Marshall  was   as  follows:     "Robert  ^^lar^hall    by  his 
attorney  in   fact,   Thomas  McCullough.      [Seal.]"     McCullough  was 
called  to  prove  the  execution,  and  he  proved  that  both  Cothran  and 
himself  executed   it   in  person.     He  proved   that   he   executed   for 
Marshall,  and  that  he  had  authority  to  do  so.     On  cross-examination 
he  was  asked  if   his  authority  to  execute   for  Marshall  was   not  in 
writing.     This  question  was  objected  to  by  plaintiffs,  and  the  court 
sustained  the   objection.     In    this  the   Circuit   Court   erred.     If  the 
authority  was   in  writing,  it  should  have  been  produced,  or  its  de- 
struction shown,  or  some  other  excuse,  sufficient  in  law.  given,  why 
it  was  not  produced.     And,  in  any  event,  it   was  the  privilege  and 
right  of  the  claimant  to  cross-examine  the  witness  as  to  the  contents 
of  the  authority  to  sign,  even  if  the  absence  of  the  writing  was  suffi- 
ciently accounted   for.     The  contract  offered  in   evidence  was  un.ler 
seal,  and  authority  to  execute  and  seal  it  must  have  been  in  writing, 
to  be  valid.     1  Greenl.  Ev.  §  269.     *     ♦     * 
Reversed  and  remanded. 


MT.  MORRIS  BANK  v.  CORTTA^r. 
(Supreme  Judicial  Court  of  Mussachusettn,  1S97.     ICJ)  Mass.  niO,  -IS  X.  E.  .•?«!.) 

Action  by  the  Mt.  Morris  Bank  against  the  firm  of  C.  L.  Gorham 
&  Co.  Verdict  for  defendants.  Plaintiff  excepts.  Exceptions  over- 
ruled. 

HoLMi-s,  J.*"  This  is  an  action  upon  two  hills  purporting  to  be 
drawn  upon  the  defendants  by  Haines  (S:  Co.,  payal)le  to  the  order  of 
the  drawees,  and  to  be  accepted  by  the  defendants,  in  the  fc.rm.  "C. 
L.  Gorham  &  Co.  p.  p.  a.  Chas.  A.  Williams."  Williams  was  an 
agent  of  the  defendants,  who  had  charge  of  their  slioj).  but  the  r|c- 
fcndants  denied  that  he  had  any  authority  to  sign  drafts,  and  at  the 
trial  put  in  a  written  power  of  attorney  which  is  admitted  not  to  have 

oParf   nf  flio  njilnlon   Is  ornlftcd.  lo  part    of   tlio   oiihilnii    Is   otiillt<-il. 


832  ACTIONS  (Part  4 

authorizoil  him  to  do  it.  Their  evidence  tended  to  prove  that  these 
drafts  were  issued  by  Williams  in  pursuance  of  a  scheme  betw^een 
Haines  and  him  by  which  a  series  of  similar  drafts  had  been  issued, 
discounted,  and  their  payment  provided  for,  without  the  defendants 
ever  having-  known  anything  about  the  matter.  The  defendar.ts 
were  regular  purchasers  of  pianos  from  Haines  &  Co.,  but  their 
case  was  that  Williams  was  not  authorized  to  pay  for  them  otherwise 
than  by  check  on  the  Central  National  Bank  of  Worcester.  The 
plaintitT  contended  that  Williams'  authority  had  been  enlarged  be- 
yond the  written  power  of  attorney,  and  that,  whether  this  had  been 
done  or  not,  the  defendants  were  chargeable  with  notice  of  Williams' 
course  of  dealing,  on  the  ground  that,  at  least,  they  ought  to  have 
known  of  it,  and  might  have  discovered  it  by  reasonable  care,  and, 
therefore,  that  Williams  had  ostensible  authority  to  sign  as  he 
did.  The  defendants  had  a  verdict,  and  the  case  is  here  on  excep- 
tions.    *     *     * 

3.  The  next  request  with  which  we  have  to  deal  was  that  there  was 
no  evidence  to  charge  the  plaintiff  with  notice  of  any  irregularity  or 
want  of  authority  in  the  issuing  of  the  drafts.  The  signature  "p.  p.  a." 
probably  meant,  and  certainly  might  have  been  found  to  mean,  "per 
power  attorney."  If  this  was  the  meaning,  not  only  was  this  request 
rightly  refused,  but  the  question  of  ostensible  authority  heretofore 
dealt  with  was  at  an  end.  The  letters  were  notice  to  the  plaintiff  on 
the  face  of  the  bill  that  his  agent  depended  for  his  authority  to  sign 
upon  a  written  document,  and  the  plaintiff  took  its  chances  if  it  did 
not  call  for  the  production  of  the  power.  Alexander  v.  Mackenzie,  6 
C.  B.  766;  Attwood  v.  Munnings,  7  Barn.  &  C.  278.  See  Stainback 
V.  Bank,  11  Grat.  269;  Stainback  v.  Read,  Id.  281,  286.  It  was  suf^- 
ciently  favorable  to  the  plaintiff  that  the  judge  did  not  instruct  the 
jury,  as  matter  of  law. 

4.  In  this  connection  we  may  as  well  dispose  of  the  exception  to 
the  admission  of  the  power  of  attorney.  The  reference  on  the  face 
of  the  bill  would  be  enough  to  justify  it  without  more.  But,  in  gen- 
eral, of  course  a  man  who  is  sued  upon  a  contract  made  in  his  name 
is  not  precluded  from  showing  the  limits  of  the  powers  expressly 
conferred  by  him,  merely  because  the  plaintiff  has  a  right  and  may 
attempt  to  show  that  the  powers  were  enlarged  by  the  defendant's 
subsequent  conduct.^-^  The  statement  by  the  judge  that,  if  the  in- 
strument was  given,  it  w^as  the  sole  measure  of  Williams'  authority, 
plainly  referred  only  to  the  moment  when  the  instrument  was  given. 
The  jury  were  allowed  to  find  that  his  authority  had  been  enlarged 
afterwards  by  the  defendants'  conduct.     It  is  suggested  for  the  plain- 

11  Authority  very  often  is  both  written  and  verlwl,  and  in  such  case  oral 
proof  may  be  given  of  the  later  enlarKeiiieiits  and  alterations  of  the  written 
power.     liank  of  North  America  v.  Enibury,  lil  How.  Prae.  14  (ISGl). 

See.  also,  Whitfield  v.  Brand,  10  M.  &  W.  2K2  (1847),  in  which  it  Is  said 
by  Pollock.  C.  P>..  that  where  there  is  a  written  i)ower  the  fact  of  agency  may 
be  proved  by  parol,  but  not  the  term.s  of  the  power. 


Ch.  3)  EVIDENCE    OF    THE    AGENCY  833 

tiff  that  it  did  not  appear  that  WiUiams  had  any  knowledge  of  the 
document,  but  only  that  it  was  deposited  with  the  bank  on  which  he 
was  authorized  to  draw  checks.  It  is  enough  to  say  that  we  think 
that  the  suggestion  is  not  fairly  open  on  the  exceptions  which  assume 
the  power  to  have  been  effective  as  between  the  parties  to  it.  *  *  * 
Exceptions  overruled. 


III.  Declarations,  Acts  and  Testimony  of  the  Agent 

GAMBILL  V.  FUQUA. 
(Supreme  Court  of  Alabama,  1906.     148  Ala.  448,  42  South.  7^5.) 

Action  for  malicious  prosecution  and  false  imprisonment.  There 
was  verdict  and  judgment  for  plaintiff  for  $745,  and,  after  motion  for 
new  trial  had  been  overruled,  the  defendant  prosecuted  this  appeal. 

Anderson,  J.^^  'j^j^g  plaintiff  recovered  damages  of  the  defendant 
for  his  arrest  and  imprisonment  without  a  warrant,  made  by  one 
Boggan,  a  deputy  of  the  defendant,  who  was  license  inspector  of  the 
city  of  Birmingham.     *     *     * 

There  is  no  proof  that  the  arrest  was  made  by  the  authority  of  the 
defendant,  unless  the  authority  might  be  inferred  from  the  declara- 
tion of  Boggan  at  the  time  of  the  arrest:  "Gambill  told  me  that 
you  and  two  or  three  others  were  the  leaders  in  the  Milkmen's  As- 
sociation, and  that  if  I  could  make  you  pay  license  the  balance  would 
pay."  If  this  could  be  considered  as  a  declaration  that  the  defendant 
had  authorized  the  arrest,  it  was  not  competent  for  that  purpose. 
"The  authority  of  an  agent,  where  the  question  of  its  existence  is  di- 
rectly involved,  can  only  be  established  by  tracing  it  to  its  source  in 
some  word  or  act  of  the  alleged  principal.  The  agent  certainly  can- 
not confer  authority  upon  himself.  Evidence  of  his  own  state- 
ments or  admissions,  therefore,  is  not  admissible  against  his  prin- 
cipal for  the  purpose  of  establishing,  enlarging,  or  renewing  his  au- 
thority; nor  can  his  authority  be  established  by  showing  that  he 
acted  as  agent  or  that  he  claimed  to  have  the  powers  which  he  as- 
sumed to  exercise."  Mechem  on  Agency,  §  100;  Galbreath  v.  Cole. 
61  Ala.  140;  Wharton  on  Evidence,  §  1184;  Scarborough  v.  Kev- 
nolds,  12  Ala.  252;  Postal  Co.  v.  Lenoir,  107  Ala.  640,  18  South.  260; 
L.  &  N.  R.  R.  Co.  v.  Hill,  115  Ala.  334,  22  South.  163.  Any  declar- 
ations of  the  agent  as  to  his  authority  were  inadmissible,  unless  other 
evidence  had  been  shown  from  which  authority  to  do  the  thing  may 
be  inferred."  Or,  if  the  trial  court  improperly  adniitti-d  (h'cl.irnlions 
of    the  agent,    the   error   would    be   ctux'd   by   evidence   subsequently 

12  Pjirt  of  tlio  opinion  Ih  onilfto<l. 

13  Afc-orrl:  Fiilrllc  v.  HiiHtlimM.  10  Vos.  .Tr.  1'J.'{  (1S(»:{).  a  h'n.linc  (vmc  In 
Knt;lniirl. 

It   docs    not    niter    tlio   rule    thai   the   statements   axe   made  dum    fervpt 
(ioKij.I'K.A:  A.— 53 


S34  ACTIONS  (I'art  4 

introducod  fniiii  wliicli  authority  mi.<;lit  be  inforrcHl;  and,  in  case  such 
evidence  was  introduced  the  question  of  authority  would  become  one 
of  fact  for  the  deterniination  of  the  jury.  r)irniinc;]iam  R.  R.  Co.  v. 
Tenn.  Co..  127  Ala.  137,  28  South.  679.' 

The  only  evidence,  aside  from  the  declaration  of  Uoi^gan,  as  to  the 
agency,  was  that  he  was  the  defendant's  deputy,  and  had  served  in 
that  capacity  for  some  time.  It  is  true  that  if  an  agent,  while  act- 
ing within  the  scope  of  his  autiiority,  exceeds  his  authority,  the  prin- 
ci]ial  would  be  liable ;  but  there  is  nothing  to  indicate,  from  the  evi- 
dence in  the  case  at  bar,  that  Boggan  was  acting  within  the  scope  of 
his  authority  in  making  the  arrest,  or  that  he  was  doing  a  thing 
which  his  principal  had  authorized  him  to  do.  No  authority  to  make 
arrests  without  warrants  could  be  implied  from  the  fact  that  he  was 
defendant's  deputy  license  inspector,  and  there  is  no  evidence  that 
defendant  authorized  the  arrest.  Indeed,  there  is  nothing  in  the  evi- 
dence that  would  indicate  that  the  defendant  had  authority  to  arrest 
people  for  violating  the  ordinance.  An  agent  has  no  implied  power 
to  do  that  which  the  master  himself,  being  present,  would  not  be  au- 
thorized to  do.  Mali  v.  Lord,  39  N.  Y.  381,  100  Am.  Dec.  448; 
^^'hitmore  v.  Allen,  33  Tex.  355 ;  12  Am.  &  Eng.  Ency.  Law,  775. 

\\'here  a  principal  is  sued  for  an  unlawful  arrest  and  imprison- 
ment made  or  caused  by  an  alleged  agent,  and  there  is  no  evidence 
of  prior  authority  or  subsequent  ratification,  it  is  error  to  leave  it 
to  the  jury  to  say  whether  or  not  there  was  such  authority  or  ratifi- 
cation. National  Bank  v.  Baker,  77  Md.  463,  26  Atl.  867.  But, 
where  there  is  any  evidence  tending  to  show  the  assent  of  the  prin- 
cipal to  the  acts  of  the  agent,  these  acts  and  declarations  of  the  agent, 
in  connection  wath  such  evidence  of  the  principal's  assent  thereto, 
should  be  allowed  to  go  to  the  jury.  Gimon  v.  Terrell,  38  Ala.  208; 
McClung's  Ex'rs  v.  Spotswood,  19  Ala.  165. 

The  acts  of  the  defendant,  the  day  of  the  trial,  in  asking  the  judge 
to  let  him  send  for  Attorney  Thach,  his  conference  with  him,  and 
the  subsequent  dismissal  of  the  prosecution,  were  facts  to  go  to  the 
jury  as  affording  an  inference,  not  only  of  a  subsequent  ratification, 
but  of  a  precedent  authorization.  In  the  case  of  Shattuck  v.  Bill,  142 
Mass.  61,  7  N.  E.  40,  it  is  held:  "The  plaintifif  after  his  arrest,  gave 
notice  of  his  intention  to  take  the  oath  for  the  relief  of  poor  debtors ; 
and  evidence  was  offered  of  the  presence  and  conduct  of  the  defend- 
ant at  these  hearings,  as  tending  to  prove  authority  from  him  to 
make  the  affidavit  and  cause  the  arrest  on  his  behalf.     To  the  ad- 

opus.  Ma.wsillon  Enfrine  Co.  v.  Akemfin.  110  Oa.  570,  35  S.  E.  g;J5  (1000);  Brit- 
taln  y.  We.stall,  1.37  N.  C.  30,  49  S.  E.  54  (1904). 

The  admission  or  claim  of  a  person  pretending  to  act  as  agent  does  not 
even  tend  to  prove  the  agency  and  .should  be  excluded.  McCune  v.  Badger, 
120  Wis.  186,  105  N.  W.  fJC7  (1905).  Ilis  unsworn  statements  at  their  very 
best  are  mere  hearsay.  Gifford  v.  Landrine,  37  N.  J.  Eq.  127  (1S.S;{).  To  be 
received  they  must  be  made  with  the  sanctity  of  an  oath.  Fitzgerald  v.  Kim- 
ball Bros.  Co.,  7G  Neb.  23G,  107  N.  W.  227  (190G).     If  one  chooses  to  take  the 


Ch.  3)  EVIDENCE    OF    THE    AGtINCY  835 

mission  of  this  evidence  the  defendant  has  no  ground  of  exception. 
If  the  whole  proceeding  in  relation  to  the  arrest  was  without  author- 
ity from  defendant,  it  is  not  reasonable  to  suppose  that  he  would 
take  part  in  opposition  to  the  application  by  the  plaintiflf  to  relieve 
himself  therefrom;  and  his  acts  in  relation  thereto,  although  occur- 
ring after  the  arrest,  had  a  tendency  to  show  that  it  was  initiated 
by  his  authority  almost  as  directly  as  if  he  had  thus  expressly  assert- 
ed it."  The  evidence,  therefore,  of  the  subsequent  conduct  of  the  de- 
fendant at  the  trial,  cured  any  error  that  may  have  been  previously 
committed  as  to  the  acts  and  statements  of  Boggan.  *  *  * 
Judgment  affirmed. 


WALSH  V.  ST.  PAUL  TRUST  CO. 

(Supreme  Court  of  Minnesota,  ISSS.     39  Minn.  23,  38  N.  W.  G31.) 

Per  Curiam.  The  appellant's  claim  against  the  estate  is  founded 
upon  a  contract  alleged  to  have  been  made  by  him  with  the  deceased 
verbally.  The  making  of  any  contract  was  put  in  issue,  ami  upon  the 
trial  the  appellant  failed  to  prove  it,  so  as  to  entitle  him  t(^  recover 
upon  it.  From  the  offer  of  proof,  by  the  testimony  of  Mr.  Kerr,  and 
from  the  admission  made  in  respect  to  the  proposed  testimony,  it  only 
appears  that  Mr.  Kerr  was  familiar  with  the  contract,  had  heard  it 
stated  by  the  parties,  and  knew  exactly  what  it  was.  There  was  no 
ofifer  and  no  proof  as  to  what  that  contract  was, — what  were  its  terms 
and  conditions.  The  offer  to  show  that  Mr.  Warner  was  "acting  for 
the  administrator"  of  the  estate  at  the  time  when  certain  papers  be- 
longing to  the  estate  were  delivered  to  him  was  not  ec|uivalent  to  show- 
ing that  he  had  any  authority  to  so  act,  or  to  contract  in  behalf  of  the 
estate.  This  is  a  sufficient  rea.son,  without  considering  others,  why  the 
proposed  testimony  of  Mr.  Warner,  relating  to  such  papers,  could  not 
affect  this  case.^*     Judgment  affirmed. 

stntcniciits  i>f  flu-  iiv'i'Ut  iis  fn  his  .iiillinril  \ .  lie  dues  so  sit  his  «»\vii  risli.  Kor- 
nciiiann  v.  M<)ii:i;;li!iii.  L't  .Midi.  .".f.  (IMl).  Thr  apMit  <iiiiiiot  liivcst  liliiisflf 
with  autliorily.  (Jruvcr  &  I'.iiiccr  Sewinj,'  Madilno  <'().  v.  rolhciiins.  :U  Midi. 
247  (1870);  Katon  v.  (Jraiiitc  State  I'lovldent  Ass'n.  SO  Me.  r»s.  .'..'i  All.  Htir» 
(is'.ir.i;    Jones  v.  Ilnrrell.  110  (Ja.  ."'.7:'..  35  S.  K.  («K)  (IJMMli. 

Willie  it  Is  more  rcKiilar  to  llrst  prove  the  aK«*n(y  liy  evl«len<e  allniule,  aixl 
tlu'M  ;i<liiiit  the  iisrenfs  statements,  still  this  rule  Is  not  Invarlahle.  The  order 
in  which  proof  shall  he  snhmltted  rests  lar;:ely  In  the  discretion  of  the  Court. 
Woodhurv  V.  I.arned.  r>  .Minn.  :'..•'.!•  («JII.  271 1  (ist'.ll.  If.  however,  the  state- 
ments of  the  ai,'enl  are  llrst  admitted  lliey  nmst  inter  he  ruled  incompetent, 
if  (hey  are  not  hy  other  evidence  connected  with  the  principal.  .Snook  v.  F>ord. 
r>(;  .N.  Y.  <!0r»  (1S71).  if  agency  is  proved  hy  other  evidence,  the  r.|:ilementM 
of  <-our.se  are  competent.  .Jackson  v.  Amerl<nu  T<'lei"hoiie  &  Teleu'rapli  «'<•.. 
^3!)  N.  r.  347.  r.l  S.  K.  MH.'.  7(»  I>.  K.  A.  7."'.^  (I'.io.-i.  However  to  admit  proof 
of  an  agent's  declarations  hefore  iayiim  .a  fouridalion  for  It  hy  othir  evl<lenci' 
of  his  a^'ency  is  not  conimen<lalih',  and  Is  Ihihle.  even  when  properly  rc^lrh  ted 
hv  the  Court,  to  prejudhe  the  Jury.  Camphell  v.  Sherman.  V.t  Mhh.  .V:i.  14 
N.  W.  4H4  (1S,S.3). 

!♦  Neither  the  ads  nor  the  words  of  an  nueiit  cnn  he  shown  to  jirove  the 
ajjency.     Iltitchlnson   Wholesale  (Irorery  Co.  v.  MrI»oiiald  &  <'o..  71   Kiin.  MX, 


836  ACTIONS  (Part  4 

FOWLDS  V.  EVANS  et  al. 
(Supreme  Court  of  Minuosota,  ISiKJ.     512  Miuu.  051,  54  N.  W.  743.) 

Evans  contracted  to  construct  ninety  miles  of  railway  and  sublet  por- 
tions to  Fowlds.  The  latter,  having  $54,000  still  unpaid,  brings  an  ac- 
tion to  foreclose  his  statutory  lien.  One  Wilson  had  for  some  time  as- 
sumed to  act  as  Evans'  agent  in  dealing  with  plaintiff.  Judgment  for 
defendant. 

Collins,  J.^"*  *  *  *  But  a  new  trial  must  be  had,  as  the  court 
erred  in  some  of  its  rulings  when  excluding  certain  testimony,  and 
again  in  striking  out  portions  of  that  already  in,  which  was  proper  and 
competent  as  tending  to  show  that  Wilson  was  Evans'  agent.  We  need 
not  refer  to  these  erroneous  rulings  specifically,  but  will  call  attention 
to  well-recognized  rules  of  evidence  in  like  cases,  under  which  a  part 
of  the  testimony  excluded,  and  some,  at  least,  of  that  stricken  out, 
should  have  been  received  or  retained.  We  have  stated  the  general 
course  of  Wilson's  conduct,  and  what  he  did  at  Sauk  Center  for  a  pe- 
riod of  three  or  four  months,  while  plaintiff  and  other  subcontractors 
under  Evans  were  at  work  on  the  line.  That  he  pretended  to  act  for 
Evans,  and  that  on  one  occasion  at  least,  and  in  a  matter  of  fact  way, 
Evans  recognized  him  as  his  representative,  is  certain.  That  Evans 
paid  him  occasional  visits,  and  once  took  him  over  a  part  of  the  work 
with  him,  and  that  he  was  recognized  by  the  officers  of  the  road  and 
by  the  subcontractors  as  Evans'  agent,  was  well  established ;  and  that 
his  course  of  conduct  must  have  been  known  by  the  latter  seems  be- 
yond serious  question.  From  the  natural  improbabilities  that  without 
authority  he  would  assume  to  act  in  the  capacity  that  he  did  during 
nearly  all  of  the  time  the  work  was  being  done,  and  from  the  fact  that 
such  conduct  would  naturally  come  to  be  known  by  the  assumed  prin- 
cipal, the  fact  of  agency  may  be  presumed.  Neibles  v.  Railway  Co., 
37  Minn.  151,  33  N.  W.  332.  It  was  well  said  in  Reynolds  v.  Collins, 
'78  Ala.  94,  that  "as  a  general  rule  the  fact  of  agency  cannot  be  estab- 
lished by  proof  of  the  acts  of  the  professed  agent  in  the  absence  of 
evidence  tending  to  show  the  principal's  knowledge  of  such  acts,  or 
assent  to  them ;  yet  when  the  acts  are  of  such  a  character  and  so  con- 
tinued as  to  justify  a  reasonable  inference  that  the  principal  had 
knowledge  of  them,  and  would  not  have  permitted  them  if  unauthor- 
ized, the  acts  themselves  are  competent  evidence  of  agency." 

In  view  of  these  rules  it  is  obvious  that  the  court  erred  in  many  of 

SO  Pao.  O'jO  (1Q()~}).  See,  also,  SchUtz  Brewing  Co.  v.  Barlow,  107  Iowa,  252, 
77  N.  W.  10:51  (1WJ9».  in  which  a  newspaper  advertisement  of  an  agency  by 
the  agent  wa.s  held  inadmissible  to  prove  the  agency. 

If  there  is  any  other  evidence  of  the  agency,  then  the  act  of  the  alleged 
agent  cannot  be  excluded  from  the  jury,  for  they  are  judj,'es  of  the  weight 
and  suflidency  of  the  testimony.  S.  &  N.  Ala.  R.  Co.  v.  Heulein,  52  Ala.  606, 
23  Am.  Rep.  578  (187.o). 

15  Part  of  the  opinion  is  omitted. 


Ch.  3)  EVIDENCE    OF    THE   AGENCY  837 

its  rulings,  particularly  when  it  struck  out  the  testimony  of  plaintiff  as 
to  Wilson's  trips  over  the  line  of  work,  giving  instructions  to  the  sub- 
contractors in  respect  to  the  manner  of  the  performance  of  their  con- 
tracts, and  directing  them  to  increase  their  forces,  as  Evans'  superin- 
tendent of  construction.  These  acts  and  the  surrounding  circumstanc- 
es had  a  strong  tendency  to  establish  knowledge  in  Evans  of  Wilson's 
pretended  agency,  and,  even  if  it  was  nothing  but  pretense,  to  conclude 
him  from  asserting  to  the  contrary.  With  Wilson's  acts  in  connection 
with  the  work,  Evans'  association  with  him  when  in  the  state,  and  the 
relation  between  these  two  persons  and  the  officers  of  the  road  while 
the  work  was  progressing,  and  what  transpired  afterwards,  one  would 
have  to  be  quite  skeptical  in  order  to  believe  that  Wilson  was  not  what 
he  assumed  to  be.^"  *  *  ♦ 
Judgment  reversed. 


WALES  v.  MOWER. 

(Supreme  Court  of  Colorado,  1908.  44  Colo.  146.  OG  Pnc.  971.) 
Action  by  Maggie  Mower  against  L.  M.  Wales  and  D.  S.  Baldwin 
to  restrain  the  sale  of  real  estate  under  a  trust  deed,  upon  the  ground 
that  the  note  secured  by  the  trust  deed  had  been  paid.  It  appeared 
that  payment  had  been  made  to  Baldwin  who  negotiated  the  loans,  but 
his  authority  to  receive  it  was  denied.  He  testified  that  he  had  author- 
ity.   From  a  judgment  for  plaintiff  defendant  appeals. 

Maxwell,  J.''  *  *  *  Objection  was  made  to  the  introduction 
of  Baldwin's  testimony  as  to  his  instructions  from  appellant  in  regard 
to  loaning  and  reloaning  the  money,  the  reception  of  the  exhibits  re- 
ferred to,  and  certain  cross-interrogatories  attached  to  the  deposition, 
all  of  which  objections  were  overruled,  and  error  is  assigned  upon 
these  rulings. 

The  argument  in  support  of  these  assignments  of  error  is  bast-ii 
upon  the  rule  that  "it  is  well  settled  that  neither  the  fact  of  agency  nor 
the  extent  of  authority  can  be  proved  by  the  declarations  of  the  alleged 
agent."  In  support  of  this  contention  R.  E.  Lee  S.  M.  Co.  v.  Knglc- 
bach,  18  Colo.  106,  31  Pac.  771,  Extension  G.  M.  &  .M.  Co.  v.  Skin- 
ner, 28  Colo.  237,  21'),  64  I'ac.  198,  and  Bur.son  v.  iiogart,  18  Colo. 
App.  449,  72  I'ac.  605,  are  cited.  In  the  Englcl)ach  Case  it  was  said : 
"It  is  well  settled  that  neither  the  fact  of  agency  nor  the  extent  of  au- 
thority can  be  proved  by  the  declarations  of  the  alleged  agent.  And 
it  is  equally  as  well  established  that,  when  an  agent  makes  a  contract 

1"  P.ut  fvidoiifp  of  a  Kfiicrnl  roiMitiilluii  us  iiKriit.  imt  known  ntul  lutinlPHCcd 
In  It.v  tlic  iirliKijiJil,  fjinnot  bf  ptil  in  ms  proof  of  tlii'  «'xlstfn<<'  of  llic  iiu'tMn-y. 
'Jlionipson  V.  Iy«l((irlimMmn's  Mcrciintllr.  etc,  < '"  .  <!0  W.  \  ii  Vl,  U\\  S.  i;. 
!»0s.  (I  L.  H.  A.  (N.  S.)  ::il  (]5»(X!»,  nnto,  p.  105.  Kvldcnce  of  Huch  a  reputatloD 
Is  IrrflfVJint  nnd  sliouUl  be  e.xchi*ii'(l.  I'nlon  Trust  Co.  v.  MeKeon,  7(5  Conn. 
50.S,  Til  Atl.   109   (1901). 

IT  I'art  of  the  opinion  Is  omitted. 


838  ACTIONS  (Part  i 

or  does  any  act  representing  his  principal,  his  declarations  made  at  the 
time  explanatory  of  the  act  are  athnissible  in  evidence  on  behalf  of 
either  party.  *  *  *  It  is  trne  that  as  a  general  rule  such  declara- 
tions ought  not  to  be  received  until  proof  has  been  made  of  the  agency. 
But  the  order  in  which  evidence  may  be  introduced  is  almost  entirely 
within  the  discretion  of  the  trial  court."  In  all  of  the  cases  cited  the 
testimony  of  the  alleged  agent  was  not  introduced.  Here  the  alleged 
agent  testified.  The  rule  invoked  does  not  exclude  testimony  of  an  al- 
leged agent  as  to  the  fact  of  agency. 

In  Fisher  v.  Denver  Nat.  Bank,  22  Colo.  373,  382,  45  Pac.  440,  it  is 
held  that  the  alleged  agent  himself  may  testify  as  to  the  agency. 

In  Xyhart  v.  Pennington,  20  ivlont.  158,  50  Pac.  414,  objection  was 
made  to  the  testimony  of  an  alleged  agent  on  the  ground  here  urged. 
The  court  said :  "Appellants  invoke  a  generally  correct  rule  of  law, 
but  an  inapplicable  one.  Plaintiffs  were  not  trying  to  prove  agency  by 
the  declarations  of  the  agent,  but  by  his  sworn  testimony  to  the  fact. 
This  they  could  do.  The  rule  is  that  the  declarations  of  an  agent  are 
not  competent  to  establish  the  fact  of  his  agency.  But  the  declarations 
of  the  agent  are  very  different  from  his  testimony  to  prove  the  fact  of 
his  agency." 

In  OXeary  v.  German-American  Ins.  Co.,  100  Iowa,  390,  69  N.  W. 
686,  it  was  held  that  the  rule  that  the  authority  of  an  agent  cannot  be 
sustained  by  his  own  declarations  does  not  render  it  impossible  to 
prove  the  authority  of  an  agent  by  his  own  testimony. 

In  Howe  ]\Iachine  Co.  v.  Clark,  15  Kan.  494,  Mr.  Justice  Valentine, 
writing  the  opinion  of  the  court,  said :  "It  is  competent  to  prove  a 
parol  agency,  and  its  nature  and  scope,  by  the  testimony  ef  the  person 
who  claims  to  be  the  agent.  It  is  competent  to  prove  a  parol  authority 
of  any  person  to  act  for  another,  and  generally  to  prove  any  parol  au- 
thority of  any  kind,  by  the  testimony  of  the  person  who  claims  to  pos- 
sess such  authority.  But  it  is  not  competent  to  prove  the  supposed 
authority  of  an  agent,  for  the  purpose  of  binding  his  principal,  by 
proving  what  the  supposed  agent  has  said  at  some  previous  time.  Nor 
is  it  competent  to  prove  a  supposed  authority  of  any  kind,  as  against 
the  person  from  whom  such  authority  is  claimed  to  have  been  received, 
by  proving  the  previous  statements  of  the  person  who,  it  is  claimed, 
had  attained  such  authority." 

No  authority  has  been  cited  contrary  to  the  doctrine  above  an- 
nounced. The  authorities  cited  are  inapplicable  to  the  case  at  bar,  for 
the  reason  that  they  apply  to  declarations  made  by  the  agent  to  an- 
other, who  is  introduced  as  a  witness  to  testify  to  such  declarations, 
and  not  to  the  direct  testimony  of  the  agent  himself.  All  authorities 
hold  that  the  agent  is  competent  to  testify  to  the  agency.^ ^    The  testi- 

18  Accord:  Thillips  v.  Poulter,  111  Til.  App.  .3.30  (1903).  The  agent  as  a 
witness  is  under  oath,  and  subject  to  cross-exumination.  Schlitz  Brewing  Co, 
V.  Grimmon,  28  Nev.  2.3."j.  SI  I'ac.  43  (lOO.j).  But  he  must  state  facts  and  cir- 
cumstances, and  not  his  ujiinion,  or  conclusion,  as  to  his  agency.     McCorniick 


Ch.  3)  EVIDENCE    OF    THE    AGEXCT  839 

mony  of  Baldwin  having  been  properly  admitted,  the  exhibits  and  an- 
swers to  the  cross-interrogatories  were  admissible,  as  tending  to  cor- 
roborate the  testimony  of  Baldwin,  and  as  explanatory  of  the  manner 
in  which  the  business  was  transacted  by  the  parties."  Xo  error  was 
committed  by  the  court  in  admitting  the  evidence  objected  to.  *  *  * 
Affirmed. 


GARTH  V.  HOWARD. 

(Court  of  Common  Pleas,  18:32.     S  Bing.  451,  21  E.  C.  L.  010.) 

Detinue  for  plate.  Plea,  general  issue.  At  the  trial  before  Tin- 
dal,  C.  ].,  it  appeared  that  Howard  had,  without  authority,  pawned, 
for  £200.,  certain  plate  belonging  to  the  plaintiff.  The  defendant, 
Fleming,  was  a  pawnbroker ;  but  the  only  evidence  to  show  that  the 
plate  had  ever  been  in  his  possession,  was  a  witness,  who  stated 
that,  at  the  house  of  the  plaintiff's  attorney,  he  heard  Fleming's 
shopman  say  that  it  was  a  hard  case,  for  his  master  had  advanced 
all  the  money  on  the  plate  at  5  per  cent. 

This  evidence  being  objected  to,  was  received,  subject  to  a  motion  to 
this  Court ;  and  a  verdict  having  been  given  for  the  plaintiff,  defend- 
ant obtained  a  rule  nisi  to  show  cause. 

TiNDAL,  C.  J.  The  rule  in  this  case  has  been  obtained  upon  two 
distinct  grounds  ;  but  it  is  unnecessary  to  give  an  opinion  upon  any 
other  than  this,  namely,  whether  the  declaration  of  the  shojMnan  of 
the  defendant  Fleming,  that  the  goods  were  in  the  possession  of  his 
master,  was  admissible :  for  it  is  clear  that,  unless  Fleming  is  to  be 
affected  by  such  declaration,  he  is  entitled  to  the  verdict  upon  the 
general  issue,  non  detinet.  If  the  transaction  out  of  which  this  suit 
arises  had  been  one  in  the  ordinary  trade  or  business  of  the  defend- 
ant as  a  pawnbroker,  in  which  trade  the  shopman  was  agent  or  serv- 
ant to  the  defendant,  a  declaration  of  such  agent  that  his  master  had 
received  the  goods,  might  probably  liave  been  evidence  :igainst  the 
master,  as  it  might  be  held  within  the  scope  of  such  agent's  authority 
to  give  an  answer  to  such  an  inf|uiry  made  by  any  person  interested 
in  the  goods  deposited  with  the  pawnbroker.  In  that  case,  the  rule 
laid  down  by  the  Master  of  the  Rolls  in  the  case  of  I'airlie  v.  Hast- 
ings, 10  V'es.  128,  which  may  be  regar<led  as  the  leading  case  on  tliis 
head  of  evidence,  directly  ap|)lies.  lUit  the  transaction  with  l-'K-ming 
appears  to  us,  not  a  transaction  in  his  business  as  a  pawnbroker,  btit 
was  a  loan  by  him  as  by  any  otiier  lender  of  money  at  5  per  cent. 
And  there  is  no  evidence  to  sln)W  the  agency  of  the  sIio|)man  in 
private  transactions  unconnected  with  the  business  of  the   sho[).     I 

V.  <i\U'i-u  of  .^liHui  Cold  MliiliiK  &  Mill.  Co.,  2:t  rijih.  71.  0.'!  I'lic.  S20  (1805); 
r.lowrrs  V.  Sf.iifhfm  Ry.  Co..  71  S.  C.  221.  r>i  S.  F..  HOS  rlfXiO).  nnto.  p.  4HS.  Vtw 
:iK<>iils  testimony  is  «»f  eoiir.H<>  not  if»nflnslvf.  Ilownnl  v.  ISriillbwiilli-.  1  W-x. 
&  H.  202  (isii:). 


840  ACTIONS  (Part  4 

doubted  much  at  the  time  whether  it  could  be  received,  and  intimated 
such  doubt  by  reserving  the  point ;  and  now,  upon  consideration  with 
the  Court,  am  satisfied  that  it  is  not  athuissible.  It  is  dangerous  to 
open  the  door  to  declarations  of  agents,  beyond  what  the  cases  have 
already  done.  The  declaration  itself  is  evidence  against  the  principal, 
not  given  upon  oath :  it  is  made  in  his  absence,  when  he  has  no  op- 
portunity to  set  it  aside,  if  incorrectly  made,  by  any  observation,  or 
any  question  put  to  the  agent;  and  it  is  brought  before  the  Court 
and  jury  frequently  after  a  long  interval  of  time.  It  is  liable,  there- 
fore, to  suspicion  originally,  from  carelessness  or  misapprehension 
in  the  original  hearer;  and  again  to  further  suspicion,  from  the  faith- 
lessness of  memory  in  the  reporter  and  the  facility  with  which  he  may 
give  an  untrue  account.  Evidence,  therefore,  of  such  a  nature, 
ought  always  to  be  kept  within  the  strictest  limits  to  which  the  cases 
have  confined  it ;  and  as  that  which  was  admitted  in  this  case  appears 
to  us  to  exceed  those  limits,  we  think  there  ought  to  be  a  new  trial. 
Rule  absolute. 


EAGLE  IRON  CO.  v.  BAUGH. 

(Supreme  Court  of  Alabama,  190G.    147  Ala.  613,  41  South.  663.) 

Action  by  Baugh  against  the  Iron  Company  for  failure  to  take 
500  cords  of  wood,  which  it  was  alleged  plaintifT  had  sold  appellant 
through  its  agent,  one  Stewart.  The  disputed  question  was  whether 
Stewart  was  an  agent  with  such  authority. 

Anderson,  J.^®  "The  authority  of  an  agent,  where  the  question 
of  its  existence  is  directly  involved,  can  only  be  established  by  trac- 
ing it  to  its  source  in  some  word  or  act  of  the  alleged  principal.  The 
agent  cannot  confer  authority  upon  himself.  Evidence  of  his  own 
statements  or  admissions,  therefore,  is  not  admissible  against  his 
principal  for  the  purpose  of  establishing,  enlarging,  or  renewing  his 
authority;  nor  can  his  authority  be  established  by  showing  that  he 
acted  as  agent  or  that  he  claimed  to  have  the  powers  which  he  as- 
sumed to  exercise."  Mechem  on  Agency,  §  100;  Galbreath  v.  Cole, 
61  Ala.  140;  Wharton  on  Evidence,  §  1184;  Scarborough  v.  Reyn- 
olds, 12  Ala.  252;  Postal  Co.  v.  Lenoir,  107  Ala.  640,  18  South. 
266;  L.  &  N.  R.  R.  Co.  v.  Hill,  115  Ala.  334,  22  South.  163.  Any 
declaration  of  the  agent  as  to  his  authority  would  be  admissible, 
when  other  evidence  had  been  shown  from  which  authority  to  do  the 
thing  may  be  inferred ;  or,  if  the  trial  court  improperly  admitted  dec- 
larations of  the  agent,  the  error  would  be  cured  by  evidence  subse- 
quently introduced  from  which  authority  might  be  inferred,  and  in 
case  such  evidence  was  introduced  the  question  of  authority  would  be- 

i»  Part  of  the  opinion  is  omitted. 


Ch.  3)  EVIDENCE    OF    THE    AOENCT  8-tl 

come  one  of  fact  for  the  determination  of  the  jurv.^"     Birmingham 
R.  R.  Co.  V.  Tenn.  Co.,  127  Ala.  137,  28  South.  679. 

There  was  evidence  from  which  the  jury  could  infer  that  McClane, 
the  superintendent,  had  authority  to  contract  for  and  buy  wood  for 
the  defendant,  and  to  delegate  the  authority  to  others,  and  that 
Stewart  was  its  agent,  independent  of  the  acts  and  declarations  of 
McClane  and  Stewart.  There  was  evidence  from  which  it  could  be 
inferred  that  these  men  were  held  out  as  agents  with  authority  to 
buy  wood,  and  also  of  a  ratification  by  the  defendant  of  their  acts. 
*     *     *     For  error  on  another  point  reversed  and  remanded. 


MOYLE  V.  CONGREGATIONAL  SOC.  OF  SALT  LAKE  CITY. 
(Supreme  Court  of  Utah,  1S97.     16  Utah,  69,  50  Pac.  806.) 

Action  for  work  done  and  materials  furnished  in  the  construction 
of  defendant's  church.  The  contract  was  made  with  Barber  &  Co.  and 
later  by  agreement  assigned  to  plaintilT's  assignor.  The  churcli  had 
paid  the  full  contract  price,  but  plaintiff  claimed  that  at  the  time  of 
the  assignment  of  the  contract  the  chairman  of  the  building  committee, 
one  Hollister,  as  agent  for  defendant,  agreed  that  the  contract  price 
should  be  waived,  and  defendant  should  pay  whatever  it  cost  to  do  the 
work.  Hollister  had  since  died.  Judgment  for  plaintiff  and  defendant 
appeals. 

Miner,  J."^  *  *  *  The  court,  over  the  objection  and  exception 
of  the  defendant,  permitted  Mr.  James  and  Mr.  Pringle,  witnesses  for 
the  plaintiff,  to  testify  that  in  a  conversation  with  Mr.  Hollister  some 
time  after  the  assignment  of  the  Barber  contract,  and  after  Barber  had 
left  town,  Mr.  Hollister  said  that  he  had  got  rid  of  Barber,  but  it  cost 
him  $500  to  get  him  away ;  that  witness  James  asked  Hollister,  out  of 
mere  curiosity — as  it  did  not  affect  witness'  contract  with  Hollister — 
how  he  got  rid  of  the  contractor,  and  how  he  settled  up  with  him; 
that  Hollister  replied,  "We  bought  him  ofT  for  $500.  and  I  would  have 
given  him  $1,000  to  get  rid  of  him.  if  I  had  to."  The  objection  to  the 
testimony  was  that  it  was  iiicomiiclent  and  irrelevant,  simply  calling 
for  a  recital  of  past  events,  and  docs  not  bind  the  defendant. 

The  admission  of  this  testimony  was  erroneous.  The  transaction 
did  not  concern  the  witness,  and  the  declaration  was  made  with  ref- 
erence to  a  past  transacti«Mi,  and  long  after  the  act  referred  to.  and 
was  no  part  of  the  res  gestae.    Where  the  act  of  the  agent  will  bind  the 

»o  \\lion  tlioro  Is  otluT  ovUlciuo  of  tlio  nk'«'nf.v.  tho  Hliiti'inciitM  of  (he  nponi 
mav  bo  roroivcd  to  sh<.\v  tliiit  h<-  puriiorli-fl  l.>  .'I't  f..r  llu-  prliK  Ipnl.  nn«l  not 
for' Honif  one  else.  NowcU  v.  ('lilpiiuin.  170  Mmss.  .-'.jn,  W  N.  K.  «^11  <is'.»s». 
If  tho  au'onry  is  lulrnll ted.  then  \hv  stiiloriM-nlH  and  arts  nuiy  nil  Im-  <onhl«lorfd 
as  part  of  the  r«so.     Baron  v.  .Tohnsoii.  .W  MIrh.  IS'J,  22  N.  W.  270  (1SS5). 

21  Other  portlon.s  of  thl.s  ctiso  are  found  on  pp.  lOJ,  .'{12. 


S42  APTK^xs  (Part  4 

principal,  there  Ills  representations,  declarations,  and  admissions  re- 
specting the  snhject-niatter  will  also  hind  him,  if  made  at  the  same 
time,  and  eonstitnting  part  of  the  res  gestx.  "But  an  act  done  hy  an 
agent  cannot  he  varied,  qualified,  or  explained  hy  his  declarations, 
which  amount  to  no  more  than  a  mere  narration  of  past  occurrences, 
or  hy  an  isolateil  conversation  held,  or  an  isolated  act  done,  at  a  later 
period.  The  reason  is  that  the  agent  to  do  the  act  is  not  authorized  to 
narrate  what  he  had  done,  or  how  he  had  done  it,  and  his  declaration 
is  no  part  of  the  res  gestae."  Railroad  Co.  v.  O'Brien,  119  U.  S.  99, 
7  Sup.  Ct.  1 18.  30  L.  Ed.  299 ;  Story,  Ag.  §  134.  Mechem,  in  his  work 
on  Agency  (section  714),  states  the  general  rule  to  he:  "The  state- 
ments, representations,  or  admissions  must  have  been  made  by  the 
agent  at  the  time  of  the  transaction,  and  either  while  he  was  actually 
engaged  in  the  performance,  or  so  soon  after  as  to  be  in  reality  a  part 
of  the  transaction ;  or,  to  use  the  common  expression,  they  must  have 
been  a  part  of  the  res  gestae.  If,  on  the  other  hand,  they  were  made 
before  the  performance  w^as  undertaken,  or  after  it  was  completed,  or 
while  the  agent  was  not  engaged  in  the  performance,  or  after  his  au- 
thority had  expired,  they  are  not  admissible.  In  such  a  case  they 
amount  to  no  more  than  a  mere  narrative  of  a  past  transaction,  and  do 
not  bind  the  principal.  The  reason  is  that,  while  the  agent  was  au- 
thorized to  act  or  speak  at  the  time  and  within  the  scope  of  his  au- 
thority, he  is  not  authorized,  at  a  subsequent  time,  to  narrate  what  he 
had  done,  or  how  he  had  done  it."^^  1  Greenl.  Ev.  §  113;  Bank  v. 
Clark,  139  N.  Y.  307,  34  N.  E.  908,  36  Am.  St.  Rep.  705 ;  Browning 
V.  Hinkle,  48  Minn.  544,  51  N.  W.  605,  31  Am.  St.  Rep.  691;  Polleys 
V.  Insurance  Co.,  14  Me.  141. 

Under  this  general  rule,  it  is  not  required  that  a  perfect  coinci- 
dence of  time  between  the  declaration  and  the  main  facts  be  shown. 
It  is  sufficient  if  the  declaration  and  the  main  facts  are  substantially 
contemporaneous.  The  declaration,  however,  must  be  voluntary 
and  spontaneous,  and  so  proximate  in  point  of  time  as  to  grow  out 
of,  elucidate,  and  explain  the  character  and  quality  of  the  main  fact, 
and  must  be  so  clearly  connected  with  it  as  virtually  to  constitute 
but  one  entire  transaction,  and  to  preclude  the  idea  of  design,  after- 
thought, or  a  mere  narrative  of  a  past  transaction.  Mechem,  Ag. 
§  715;  Railroad  Co.  v.  O'Brien,  119  U.  S.  99,  7  Sup.  Ct.  118,  30  L. 
Ed.  299.  From  the  general  trend  of  the  testimony,  it  appears  that 
this  conversation  did  not  occur  until  several  days  after  the  assign- 
ment, and  the  payment  of  the  $500  by  the  church  to  Barber  &  Co., 
and  after  Barber  had  left  the  city.  We  are  of  the  opinion  that  the 
court  erred   in  arlmitting  the  testimony. 

There  are  many  exceptions  taken  to  the  admission  and  rejection 

22  If  the  princirial  employs  agents  to  talk  for  him,  he  will  be  responsible 
for  what  they  .say,  but  the  mere  fact  that  he  emr)loys  them  to  work  for  him 
does  not  make  him  chargeable  with  what  they  say  about  him,  or  his  affairs. 
Standard  Oil  Ci,.  v.  Linol  Co.,  75  N.  .7.  Law,  294,  68  Atl.  174  (1907^  ante,  p.  771. 


Ch.  3)  EVIDENCE    OF    THE    AGENCY  843 

of  testimony  in  the  case,  but,  as  those  already  passed  upon  are  deci- 
sive of  the  case,  we  do  not  consider  it  necessary  to  refer  to  the  re- 
maining exceptions.  For  the  errors  referred  to  the  judgment  of  the 
district  court  is  reversed  and  set  aside,  and  the  case  remanded,  with 
directions  to  grant  a  new  trial. -^ 


PEYTON  V.  OLD  WOOLEN  MILLS  CO. 

(Court  of  Appeals  of  Kentucky,  190C.     122  Ky.  3(51.  91  S.  W.  710.  2s;  Ky. 

Law  Rep.  1303.) 

O'Rear,  J.2*  Appellant,  who  is  a  married  woman,  had  been  en- 
gaged in  the  mercantile  business  at  Oscar,  Ky.,  prior  to  1900.  In 
the  latter  year  the  store  building  and  stock  of  merchandise  were  de- 
stroyed by  fire.  The  house  was  rebuilt  directly,  and  within  a  few 
months  a  new  stock  of  general  merchandise  was  bought,  and  a  mer- 
chandising business  conducted  at  that  stand,  of  the  same  nature  and 
in  the  same  name  as  before.  Mrs.  Peyton's  name  in  her  business 
was  generally  used  simply  as  "F.  L.  Peyton."  Her  husband  had 
previously  conducted  the  business  for  her.  She  personally  had  but 
little  to  do  with  it.  After  the  fire  in  1900  and  when  the  new  busi- 
ness was  begun,  the  style  of  the  concern  was  "F.  L.  Peyton."  1  kr 
husband's  name  was  Frank  Peyton.  He  claims  it  was  Frank  L. 
Peyton.  Perhaps  it  was.  But  it  seems  that  ordinarily  he  omitted 
the  "L."  in  the  signature  of  his  bwn  name.  Mrs.  Peyton  owned  a 
farm,  some  houses  in  Oscar,  and  other  property.  She  was  solvent. 
Her  husband  was  then  and  is  yet  insolvent  and  without  credit.  .An 
interest  in  the  store  was  sold  to  one  Webb,  and  the  style  of  the  firm 
changed  to  Peyton,  Webb  &  Co.  The  stock  of  merchandise  owned 
by  this  concern  was  also  destroyed  by  fire.  Suits  were  l)n)Ught  by 
creditors  of  the  firm,  wholesale  merchants  who  had  sold  it  the  stock 
of  merchandise,  against  appellant,  Mrs.  Frances  L.  Peylt)n,  to  charge 
her  as  a  partner  upon  the  firm's  indebtedness.  She  denied  that  she 
was  or  ever  had  been  a  member  of  the  firm.  The  new  business  was 
conflucted  by  Frank  Peyton  just  as  liatl  been  done,  so  far  as  his 
personal  management  went,  when  Mrs.  I'eyton  ownecl  it.  The  sole 
issue  made  by  the  pleadings  was  whether  appellant  was  a  member 
of  the  firm  of  Peyton.  Webb  &   Co.     ♦     *     * 

There  was  considerable  evidence  introduced  by  ajipellees  that 
Frank  Peyton,  not  in  the  presence  of  his  wife,  represented  th.it  she. 
and  not  he,  was  the  member  of  the  firm  of  liic  name  of  "1'.  L.  Pey- 
ton." It  was  also  shown  that  in  giving  in  the  prtjperty  to  the  county 
assessor  for  taxation,  he  listed  all  the  properly,  her  I.inds  aiirl  the 
stock  of  merchandise,  in  the  name  of  "I'.  L.  Peyton,"  that  in  making 

2'' Tlif  friiHiirriiiK  npinlon   of  'Aww.   <'.  .7..  Is  oiiiKlcd. 
2*  r.'irt   of  llif  opinion  Is  oiiiilt<-«l. 


844  ACTIONS  (Part  4 

reports  to  the  R.  G.  Dunn  nicrcantilo  agency  lie  showed  that  it  was 
Mrs.  Peyton  who  was  the  member  of  the  firm.  All  of  this  evidence 
was  introduced  as  substantive  evidence  in  support  of  appellee's  con- 
tention tiiat  appellant,  Mrs.  Peyton,  was  in  fact  the  F.  L.  Peyton 
who  conducted  and  was  a  member  of  the  firm  who  conducted  that 
business.  This  class  of  evidence  was  objected  to  by  appellant,  and  was 
admitted  over  her  exceptions.  It  was  so  extensive  in  volume,  and  so 
damaging  in  character  and  probable  effect,  that  there  is  no  doubt  of 
its  being  reversible  error,  if  error  at  all. 

Appellees"  contention  is  that,  as  appellant  put  her  husband  in  the 
position  and  held  him  out  as  her  agent,  she  is  bound  by  his  acts  and 
statements  made  in  that  business,  as  if  done  and  made  by  her  in 
person.  It  is  undeniably  true  that  where  one  acts  in  a  matter  by  an 
agent,  the  latter's  action  in  the  matter,  if  within  the  real  or  apparent 
scope  of  his  agency,  is  as  binding  on  the  principal  as  if  done  by  the 
principal  himself.  But  it  is  always  necessary  to  first  establish  the 
fact  of  the  agency,  and  to  show  the  actual  or  apparent  scope  of  the 
agent's  authority.  This  cannot  be  done  by  proving  what  the  agent 
said  or  represented  as  to  the  extent  of  his  authority.  Morgan's 
Heirs  v.  ^Marshall,  7  J.  J.  Marsh.  316;  Bruen  v.  Grahn,  5  Ky.  Law 
Rep.  312;  Dieckman  v.  Weirich,  IZ  S.  W.  1119,  24  Ky.  Law  Rep. 
2340;  Cent.  Penn.  Tel.  Co.  v.  Thompson,  112  Pa.  131,  3  Atl.  439; 
Francis  v.  Edwards,  77  N.  C.  271;  Galbreath  v.  Cole,  61  Ala.  139; 
^Nlussey  v.  Beecher,  3  Cush.  517. 

It  must  be  rare  that  what  one  claiming  to  be  the  agent  of  another 
said  out  of  court  of  the  nature  and  extent  of  his  agency  can  be  ad- 
mitted as  evidence  of  such  agency  against  the  principal.  The  whole 
doctrine  of  an  agent's  admission  against  the  principal's  interest  bind- 
ing the  latter  rests  upon  the  idea  that  it  is  of  the  res  gestae,  the  repre- 
sentation or  statement  of  the  agent,  in  such  cases,  being  the  ultimate 
fact  to  be  proved,  and  not  the  admission  of  some  other  fact.  A 
party's  own  admissions  against  his  interest  may  be  given  in  evidence 
against  him  whenever  made.  But  the  admission  or  declaration  of 
his  agent  binds  him  only  when  made  during  the  continuance  of  the 
agency  and  in  regard  to  a  transaction  then  in  hand  and  being  exe- 
cuted. Greenleaf  on  Evidence,  §  113.  When  the  principal  fact  to 
be  established  is  the  liability  (but  not  its  extent)  of  one  as  principal 
in  a  transaction,  what  another,  though  his  agent,  may  have  said  by 
way  of  admission  concerning  such  principal's  liability  is  hearsay;  is 
not  part  of  the  res  gestae,  and  could  not  well  be  within  the  scope  of 
an  agent's  authority  to  make.     1  Phil,  on  Evidence  (Am.  Ed.)  402. 

The  agent,  of  course,  may  as  a  witness  testify  to  the  fact  and  scope 
of  his  agency,  unless  otherwise  incompetent  as  a  witness.  So,  his 
agency  may  be  shown  by  circumstances,  as  by  proof  of  the  conduct 
of  the  principal,  acquiescence,  appr(jval  and  the  like  of  the  agent's 
acts.  Such  evidence  goes  to  establish  that  the  alleged  principal  is 
principal,  as  well  as  to  show  the  scope  of  the  agency.     The  question 


Ch.  3)  EVIDENCE  OF  THE  AGENCY  845 

being  discussed  is  not  whether  an  agent's  statement  in  the  course 
of  a  transaction,  and  concerning  it,  is  receivable  as  evidence  against 
the  principal,  but  whether  such  a  statement  is  receivable  at  all  to 
prove  the  fact  of  the  agency,  which  is  to  connect  the  principal  with 
the  matter.  It  is  stated  in  Evans  on  Principal  and  Agent,  p.  187 : 
"As  a  general  proposition,  what  one  man  says,  not  upon  oath,  cannot 
be  evidence  against  another  man.  The  e.xception  must  arise  out  of 
some  peculiarity  of  situation,  coupled  with  the  declarations  made  by 
one.  An  agent  may  undoubtedly,  within  the  scope  of  his  authority, 
bind  his  principal  by  his  agreement,  and  in  many  cases  by  his  acts. 
What  the  agent  has  said  may  be  what  constitutes  the  agreement 
of  the  principal ;  or  the  representations  or  statements  made  may  be 
the  foundation  of  the  inducement  to  the  agreement.  Therefore,  if 
writing  is  not  necessary  by  law,  evidence  must  be  admitted  to  prove 
that  the  agent  made  a  certain  statement.  So,  with  regard  to  acts 
done,  the  words  with  which  these  acts  are  accompanied  frequently 
tend  to  determine  their  quality.  Nevertheless,  the  admission  of  the 
agent  cannot  be  assimilated  to  the  admission  of  the  principal.  A 
party  is  bound  by  his  own  admission,  and  is  not  permitted  to  con- 
tradict it;  but  it  is  impossible  to  say  a  man  is  precluded  from  ques- 
tioning or  contradicting  anything  any  person  has  asserted  as  to  him, 
as  to  his  conduct,  or  his  agreement,  merely  because  that  person  has 
been  an  agent  of  his.  An  agent  can  act  only  within  the  scope  of  his 
authority;  hence,  declarations  or  admissions  made  by  him  as  to  a 
particular  fact  are  not  admissible  as  evidence  against  the  principal, 
unless  they  fall  within  the  nature  of  the  agent's  employment  as  agent ; 
unless,  for  instance,  they  form  part  of  the  contract  which  he  has  en- 
tered into  and  is  employed  to  negotiate  on  behalf  of  the  princii>al. 
Hence,  what  is  said  by  an  agent  respecting  a  contract  or  other  mat- 
ter in  the  course  of  his  employment  is  good  evidence  to  affect  the 
principal,  but  not  if  it  is  said  on  another  occasion." 

In  the  case  at  bar  the  objectionable  evidence  was  not  admissions 
made  by  Frank  Peyton  as  the  agent  of  his  wife,  in  the  course  of  his 
agency,  concerning  the  particular  transactions  in  suit;  i.  e.,  the  pur- 
chase of  any  of  the  bills  of  goods  sued  for.  That  Frank  Peyton 
purchased  the  goods  is  not  denied.  Nor  is  there  any  issue  as  to  the 
terms  of  the  contracts.  If  there  were,  and  if  I'rank  Peyton's  agency 
were  established,  directly  or  circumstantially,  what  he  sai<l  in  the 
course  of  the  transactions  respecting  their  terms  would  be  receiv- 
able as  evidence  against  his  principal.  I'.ut  no  such  inquiry  is  in- 
volved here.  On  the  contrary,  it  is,  simply,  for  whom  was  Frank 
Peyton  acting  in  making  the  purchases?  What  he  said  in  the  ab- 
sence of  appellant,  and  of  which  she  was  ignorant,  cannot  be  evi- 
dence against  her  under  any  rule  of  evidence  that  he  was  acting  for 
her.  Although  it  mav  be  assumed  as  otlierwise  proved  that  Frank 
Peyton  was  the  general  agent  of  his   wife  in  conducting  that  mcr- 


SIG  ACTIONS  (Part  4 

cantile  business,  yet  what  ho  said  in  her  absence  respecting  the  fact 
that  she  was  principal  and  he  her  a^ent  only  cannot  be  received  as 
evidence  that  she  was  principal.  Such  statement  is  not  properly  a 
part  of  any  transaction  involved  in  the  issue  being  tried,  and  there- 
fore was  not  part  of  the  res  gestae.  What  Frank  Peyton  did  toward 
managing  appellant's  property,  such  as  listing  it  for  taxation  in  her 
name.  is.  when  shown  to  have  occurred  as  in  this  case,  under  cir- 
cumstances presuma])ly  within  her  knowledge — for  she  must  have 
known  that,  as  she  did  not  attend  to  that  duty,  some  one  did  it  for 
her — was  relevant  to  show  that  the  property  was  hers ;  not  because 
Frank  Peyton  said  it  was,  but  because  by  her  adoption  of  his  act  she 
also  asserted  it  was  hers.  That  he  kept  the  bank  account  in  her 
name,  a  fact  shown  to  have  been  known  to  her,  was  also  relevant 
upon  the  same  principle.  But  what  he  said  to  merchants  and  re- 
ported to  the  mercantile  agency  were  not  relevant  as  against  her, 
and  it  was  error  to  have  admitted  that  character  of  evidence  to  the 
jury.     *     *     * 

For  the  reasons  indicated,  the  judgment  is  reversed,  and  cause  re- 
manded for  a  new  trial  under  proceedings  not  inconsistent  herewith. 


SECTION  3.— WEIGHT  AND  SUFFICIENCY 


STILL  V.  BOWERS. 

(District  Court  of  Philadelphia,  1864.     5  Phila.  363.) 

Hare,  J.  Although  the  evidence  given  in  this  case  to  show  that 
Kelty,  who  ordered  the  work  for  which  the  plaintifif  sues,  was  the 
duly  authorized  agent  of  both  the  defendants,  as  he  undoubtedly  was 
of  one  of  them,  may  have  been  but  slight,  it  was  still  evidence  which 
could  not  be  withheld  from  the  jury,  and  which  was  accordingly  left 
to  them  w^ith  a  caution  against  giving  it  too  much  importance,  and 
an  explanation  of  its  true  weight  and  bearing.  They  found  for  the 
plaintiff,  and  we  see  no  suf^cient  reason  for  setting  aside  the  verdict. 
The  joint  ownership  of  the  mill ;  the  concurrence  of  both  the  de- 
fendants in  removing  the  old  fixtures ;  the  frequent  visits  of  Bowers 
after  the  new  machinery  had  been  put  up  and  was  running  under 
the  personal  superintendence  of  Conrow ;  the  testimony  of  one  of 
the  workmen  that  when  he  applied  to  Conrow  for  employment.  Bow- 
ers was  sent  for,  and  joined  in  referring  the  witness  to  Kelty,  by 
whom  he  was  engaged  and  paid  in  the  name  of  Conrow  and  Bowers, 
were  all  circumstances  which,  although  of  comparatively  little  signif- 
icance separately,  are,  when  taken  together,  enough  to  show  that 
the  finding  of  the  jury  cannot  be  justly  impugned,  either  as  being 
witliout  evidence,  or  contrar\-  to  its  weicfht. 


Ch.  3)  EVIDENCE    OF    THE    AGENCY  8-ii 


TEBBETTS  v.  LEVY.=== 

(City  Court  of  New  York,  Geueral  Term.  1800.    11  X.  Y.  Supp.  GS4,  34  X.  Y. 

St.  Hop.  58.) 

Action  on  a  guaranty  of  payment  for  goods  to  the  amount  of 
$379.  Defendant's  name,  as  guarantor,  was  signed  by  his  wife. 
The  trial  judge  dismissed  the  complaint  for  want  of  evidence  of  au- 
thority in  the  wife. 

Per  Curiam.  On  appeal  from  this  judgment  dismissing  their 
complaint,  the  plaintiffs  arc  entitled  to  have  all  their  evidence  taken 
as  true,  and  to  be  given  the  benefit  of  the  most  favorable  inferences 
deducible  therefrom.  Weil  v.  Railroad  Co.,  119  N.  Y.  152,  23  X. 
E.  487.  Although  the  statute  requires  the  guaranty  to  be  in  writ- 
ing, it  was  not  necessary  that  Mrs.  Levy's  authority  to  execute  it. 
as  defendant's  agent,  should  also  be  in  writing.  Parol  authority  is 
sulificient,  and  it  may  be  proved  bv  oral  testimonv.  WVirrall  v. 
Munn,  5  N.  Y.  229,  55  Am.  Dec.  330;  Dykers  v.  Townsend.  24  N. 
Y.  57;  Bank  v.  Ballou,  49  N.  Y.  155. 

The  defendant  told  the  plaintiffs  that  his  wife  wcniUl  have  charge 
of  his  business ;  that  they  could  do  business  with  her  as  they  had 
with  him ;  and  that  they  could  let  her  have  whatever  she  wanted, 
and  it  would  be  all  right.  On  the  defendant's  return  from  Europe, 
plaintiffs  demanded  payment  from  him.  and  he  said  if  his  wife  would 
tell  him  that  she  had  guarantied  the  purchase  he  would  pay  the  bill. 
He  asked  for,  and  was  allowed  to  take,  the  guaranty  to  show  to  his 
wife,  presumably  to  ask  her  whether  she  did  make  it,  and  in  a  few 
days  returned  it  with  a  letter,  neither  denying  nor  admitting  his 
liai>ility.  The  defendant  offered  to  pay  half  of  the  claim  before  suit 
brought.  Taking  this  evidence  as  true,  as  we  must  on  this  appeal,  it 
is  clear  that  the  jury  would  have  been  warranted  in  drawing  the  in- 
ference that  Mrs.  Levy  had  authority  from  the  defendant  to  sign  his 
name  to  the  guaranty.  It  is  impossible  to  lay  down  any  inflexible 
rule  by  which  it  can  be  determined  what  evidence  shall  be  sufficient 
to  establish  an  agency  in  any  given  case;  but  it  may  be  said,  in 
general  terms,  that  whatever  evidence  has  the  tendency  to  prove  the 
agency  is  aflmissible,  even  though  not  full  and  .satisfactory,  as  it  is 
the  province  of  the  jury  to  pass  upon  it.  I'.ickford  v.  Mcnier,  36 
Hun,  446;  Mainifacturing  Co.  v.  Burns,  15  X.  Y.  St.  Rep.  570;  Leslie 
v.  Insurance  Co.,  (>5  X.  Y.  27;  aufl  see  Railroad  Co.  v.  llenlein,  ^2 
Ala.  606,  23  Am.  Rep.  578;  Morrison  v.  Whiteside,  17  Md.  452.  79 
Am.  Dec.  661.  Apart  from  the  f|uestion  of  original  authority,  there 
was  sufficient  evidence  of  ratification  to  go  to  the  jury.  1  Lavvson, 
Rights,  Rem.  &  I'r.  §  41;  llarro«l  v.  McDaniels.  12f>  .Mass.  415; 
Ca'irnes  v.   BIcccker,    1*2    l..liiis.   .W);    Jervis   v.    Iloyt,   2   Hun.  637; 

2r.  .\  fiord :      Elliott    v.    r.M.liii.'.  ..:•   N     .1.    I.inv.  r,(\7.  'M',  .Ml.    KVts  (IMMW. 


S4S  ACTIONS  (Part  4 

Tolmson  V.  Tones,  4  Barb.  369;  Stilwcll  v.  Insurance  Co.,  72  N.  Y. 
392. 

The  case  ouqht  to  have  q'one  to  the  jury.  It  was  error  to  dismiss 
the  complaint,  and  the  judgment  entered  on  such  dismissal  must  be 
reversed,  and  a  new  trial  ordered,  with  costs  to  the  appellant  to 
abide  the  event. 


BOOTH  V.  KESSLER. 

(Supreme  Court  of  Nebraska,  1901.     62  Neb.  704,  87  N.  W.  532.) 

Action  in  equity  to  foreclose  a  mortgage  which  plaintiff  alleged 
he  purchased  bona  fide  for  value  from  one  Weiss.  Defendant  claimed 
Weiss  was  the  agent  of  plaintiff  and  that  plaintiff  was  not  an  innocent 
purchaser.  Kessler  applied  for  a  loan  in  an  application  which  desig- 
nated Weiss  as  his  agent.  The  note  and  mortgage  were  made  out 
to  \\'eiss,  and  the  money  was  sent  to  Weiss  by  plaintiff  and  credited 
to  his  account  in  the  bank  of  which  Weiss  was  cashier.  Weiss  as- 
signed the  mortgage  to  plaintiff,  but  before  it  was  paid  over  to  de- 
fendant the  bank  failed. 

HoLCOMB,  J.^*  *  *  *  Ij^  ^i^js  connection  it  is  pertinent  to  re- 
mark that  the  evidence  is  entirely  clear  upon  the  point  that  the  ap- 
plication for  the  loan  was  made  for  the  purpose  of  paying  a  balance 
due  on  a  prior  mortgage ;  that  the  prior  mortgage  was  not  satisfied, 
and  that  plaintiff  was  advised  of  this  fact  when  he  accepted  the  note 
and  mortgage  in  question ;  and  that  he  forwarded  the  money  to 
W^eiss  evidently  for  the  purpose  of  having  the  prior  mortgage  satis- 
fied before  he  intended  the  transaction  should  be  closed.  Other  evi- 
dence of  much  the  same  character  was  introduced. 

We  cannot  say  the  trial  court  was  not  justified,  from  all  the  facts 
and  circumstances  shown  in  evidence,  in  finding  that  in  the  transac- 
tion Weiss  acted  as  the  agent  of  the  plaintiff,  and  that  plaintiff  did  not 
in  fact  purchase  the  note  and  mortgage  of  Weiss  as  alleged.  There 
is  no  very  serious  conflict  or  contradiction  in  the  evidence.  Aside 
from  the  testimony  of  the  plaintiff  wherein  he  testifies  that  he 
bought  the  note  and  mortgage  of  Weiss,  and  paid  him  for  them, — 
which  is  in  the  nature  of  a  conclusion,  rather  than  a  statement  of 
facts, — there  is  no  substantial  controversy  as  to  the  facts  surround- 
ing the  transaction,  and  which  lead  up  to  and  establish  the  ultimate 
fact  and  chief  point  in  controversy;  that  is,  the  character  of  the 
transaction  as  between  the  three  active  agents  thereto  and  principal 
participants  therein.  We  incline  to  the  view  that,  as  established  by 
the  evidence,  it  is  a  case  where  reasonable  minds  might  very  prop- 
erly differ  as  to  the  proper  conclusions  to  be  drawn  therefrom, 
and,   if  so,  we   are   not   warranted   in  disturbing   the   finding,  even 

26  Part  of  the  opinion  is  omitted. 


^^•^)  EVIDENCE    OF    THE    AGENCY  849 

re^rWir  ^'^l^'  ^'  °^  '^''  °P^'"°"  '^'^'  ^  ^^^^'"^"t  conclusion  than 
reached  by  the  trial  court  might  be  more  proper.^^  The  rule  is  that 
on  appeal  and  a  trial  de  novo  the  findings  of  the  district  court  will 
not  be  disturbed  unless  they  cannot  be  reconciled  with  anv  reason- 
?^  m'^w '".1?"  ?^  ^^'  testimony,  Gadsden  v.  Phelps.  37  Xeb.  590 
56  N^  W.  314;  that  when  only  questions  of  fact  are  presented,  as 
to  which  there  is  sufficient  evidence  to  sustain  the  findings  of  the 
M^r  VT'J";'?-"'-"'  ^viH-  be  sustained,  Cunningham  v.  Katz.  38 
Neb.  29,  o6  N.  \\.  711.  Findings  on  questions  of  fact  by  a  Irial 
court  are  entitled  to  the  same  weight  and  the  same  presumption  of 
correctness  as  a  verdict  of  a  jury,  and  the  rule  is  the  same  whether 
the  case  is  brought  to  this  court  on  error  or  appeal,  and  applies  to 
all  classes  of  actions.     Burlingim  v.  Warner,  39  Neb.  493,  58  N.  W. 

The  decree  appealed  from  must  be  affirmed. 

miffPd  fn  nfo^  the  preponderance  when  the  matter  has  been  proi)erlv  sul.- 
mitted  to  the  jury.  The  court  will  set  aside  a  verdict  on  the  u-round  of  insu  1  - 
cient  evidence  only  when  it  is  clear  the  jury  acted  in  total  disre  "  rd  of  e 

14?:  75  ko.  ^i  ay^."-  ^-  '"  ''''''■'    ^^-^-•^  -   ^■-'  Asselt.  .4   Wash." 

The  preponderance  of  the  evidence  may  be  so  great  against  the  verdict  of 

the  jury  as  to  require  a  reversal  in  the  interest  of  justice     I lorowitz  v   iHnes 

10=;  X    P    v^o    if^^'l  -^-    ^'^   '^"'•"-  ^''^  'l'^^-^"-     «"t   conipare^ratel  V    Max" 

Jit.  Vk       ^^^'  •^•\!n^-  -''^  ^l'^^^^'  ^^''l'"-  to  the  older  rule  that  If  th,.?;  H 

Som  the'jury.''"'*"^  ""'  '^^""'^  "'^  '''''''  ^^""^^  ^^^hdraw   the  queJiou 

See,  also,  ante,  pp.  338  and  827. 

GODD.i'B.&  A. — 54 


SoO 


ACTIONS  (Part  4 

CHAPTER  IV 
TRIAL-PROVINCE  OF  COURT  AND  JURY 


SOUTH  &  NORTH  ALABAMA  R.  CO.  v.  HENLEIN. 

(Suproine  Court   of  Ahihanui,  1S75.     52  Ala.  (iO(i,  2?,  Am.  Kep.   578.) 

Action  for  failure  to  deliver  a  steer  received  by  defendant  com- 
pany for  transportation  to  Montgomery,  Alabama.  Judgment  for 
plaintiff  and  defendant  appeals. 

BrickELL,  C.  J.^  The  contract  of  shipment  contemplates  that 
the  owner  or  his  agent  shall  attend  the  live-stock  while  in  the  course 
of  transportation,  and  imposes  on  him  the  duty  of  feeding  and  water- 
ing them,  at  his  own  expense,  if  delays  or  accidents  occurred.  The 
stock  left  the  place  of  shipment  in  charge  of  an  agent  of  the  owner, 
who  was  with  them,  when  delivered  to  the  appellant.  The  cause  of 
the  death  of  the  animal,  for  the  loss  of  which  a  recovery  is  sought  in 
this  case,  was  matter  of  controversy  in  the  circuit  court.  Delays  in 
transportation  had  occurred,  and  it  may  have  been  supposed  the  want 
of  food  and  water,  during  the  delay,  was  the  cause  of  death.  The 
appellant,  to  relieve  itself  from  all  imputation  of  negligence  in  this 
respect,  offered  to  prove  that  at  Birmingham,  after  the  delays,  when 
no  visible  injury  had  happened,  its  agent  proposed  to  a  person, 
claiming  to  be  in  charge  of  the  stock,  to  switch  off  the  car,  on  which 
the  stock  was  loaded,  and  feed  and  water  them.  This  person  re- 
fused to  permit  this  to  be  done.  The  court  excluded  this  evidence, 
because  not  connected  with  other  evidence,  that  the  person  to  whom 
the  proposition  was  made  was  the  agent  of  the  owners. 

The  acts  or  declarations  of  one  professing  to  be  the  agent  of  an- 
other are  not  binding  on  the  principal  until  his  authority  is  shown,  or 
the  assent  to,  or  ratification  of  such  acts  or  declarations.  McClung's 
Ex'rs  v.  Spotswood,  19  Ala.  165. 

When  the  fact  of  agency  rests  in  parol,  its  existence  and  the  ex- 
tent of  the  authority  conferred  are  matters  of  fact  for  the  determi- 
nation of  the  jury.  Whatever  evidence  has  a  tendency  to  prove  the 
agency  is  admissilile.  In  the  case  cited,  C.  J.  Dargan  said:  "The 
correct  rule  is  this,  if  there  be  no  proof  whatever  tending  to  prove 
the  agency,  the  act  may  be  excluded  from  the  jury  by  the  court ;  but 
if  there  is  any  evidence  tending  to  prove  the  authority  of  the  agent, 
then  the  act  cannot  be  excluded  from  them,  for  they  are  the  judges 
of  the  weight  and  sufficiency  of  the  testimony."  In  determining  the 
admissibility  of  evidence,  its  sufficiency  must  be  lost  sight  of  in  a 

1  Part  of  the  opiniou  Ls  omittecL 


Ch.  4)  TRIAL — PROVINCE   OF   COURT   AND   JURT  851 

great  degree;  it  may  be  weak  and  inconclusive,  yet  if  it  is  relevant 
and  has  a  tendency  to  prove  a  material  fact,  it  cannot  be  excluded 
without  invading  the  province  of  the  jury.  When  the  fact  offered 
to  be  proved  is  connected  with  the  fact  that  the  contract  of  shipment 
contemplates  the  presence  of  the  owner  or  his  agent  during  the 
transportation  of  the  stock,  and  imposes  on  him  the  duty  of  water- 
ing, feeding,  and  caring  for  them,  and  with  the  fact  that  when  the 
stock  left  the  place  of  shipment  they  were  in  charge  of  an  agent,  who 
was  with  them  when  delivered  to  the  appellant;  the  evidence  offered 
was  admissible.  The  fact  that  the  person  to  whom  the  offer  was 
made  was  in  charge  of  the  stock,  claiming  to  be  the  agent,  in  con- 
nection with  these  facts,  had  a  tendency  to  show  he  was  the  agent ; 
and  in  the  absence  of  contradictory  evidence  might  have  been  re- 
ceived by  the  jury  as  sufficient.  He  was  where  the  agent  shouUl 
have  been,  and  exercising  the  authority  the  agent  had.  The  point 
of  dispute  is  not  whether  the  owners  had  an  agent  who  should  have 
been  in  charge  of  the  stock  at  the  time  and  place  of  the  offer,  but 
whether  the  person  to  whom  the  offer  was  made  was  such  agent. 
The  existence  of  an  agency  not  being  controverted,  the  evidence 
should  have  gone  to  the  jury,  and  under  proper  instructions  from 
the  court  they  should  have  determined  whether  the  person*  to  whom 
the  offer  was  made  was  or  not  ap])ellce's  agent.  The  evidence  given 
by  the  appellees  that  their  agent  left  the  train  conveying  the  stock 
before  it  reached  Birmingham,  and  was  not  there  when  the  train 
arrived  or  left,  does  not  affect  the  admissibility  of  the  evidence  re- 
jected. It  was  contradictory  of  the  fact  that  the  jK'rson  to  whom 
the  offer  was  made  was  the  agent  of  the  appellees ;  but  the  fact  that 
evidence  is  in  conflict  with  or  contradictory  of  other  evidence  is  not 
involved  in  an  inquiry  as  to  its  admissibilty.  Its  credibility  and  suffi- 
ciency is  affected  by  such  conflict  or  contradiction,  and  there  the 
duty  of  the  jury  intervenes  to  determine  the  weight  it  should  receive 
in  view  of  the  contlict.-  *  ♦  * 
Reversed  and  remanded. 

2  Nnt  onlv  tin-  fii<  I  I'Ht  IIk-  scopo  of  (he  .■mcncv  nro  fur  tlio  jury.  r,ou;;li 
V.  iMivis  &  r.).,  :•..".  WmsIi.    »♦!».  77  I')i«'.  7.".'_'  (liKiK. 

Wlicti  Imt  iiiu-  <<iii(liisi<>ii  mil  lie  dniwii  riom  tlu'  fiKls.  tlu'  cinirt  sIkhiIiI 
(lin-ct  a  verdict.  Wriulit  v.  Vinc.vard  M.  i:.  ("Iiiirrli,  7L'  .Minn.  7s.  7>  N.  W. 
10ir»  (is'tsi.  S«'c,  iilso,  Kapid  Hook  \  K.vi*  Co.  v.  He  Itiiytrr.  117  MIrli.  ."17. 
7<;  .\.  \V.  70  (INOS),  In  which  there  was  no  evidence  of  aiceiicy  or  ratillciidon. 
Franklin  r.ank  .Note  C...  v.  Mackey.  l.'.s  N.  V.  I  |(),  .VJ  .\.  K.  7.".7  (IS'.KM.  Tlu* 
questif>n  whether  there  is  any  evidence  teiidlnu  to  sliow  au'eiicy  Is  for  tlie 
court.     Trimhle  v.  .Mercantile  Co..  .Ml  Mo.  App.  <;s.*{  (IMH);    Meld  v.  Am-rhnch 

(Sup.)  8S  N.  Y.  Supp.  ir.s  (I'.MiJ).     .See,  also.  Cliillin  v.  Coiill till  Works,  ante. 

p.  'V.iH,  as  to  written  power.  As  to  deterniination  of  written  authority  and 
\tn  Hcope.  SOP  the  leading  case  of  Ii<Midoii  .Snvlnu's  Fund  Society  v.  Ilairerslowii 
Snvlncs  P.ank.  '.',(',  Vu.  WX.  7S  Am.  l>e<-.  IttMt  ilWMM.  v<r^t.  p.  H.'i.'l.  \Vln'n  the  writ- 
ing mnralives  aaency.  the  court  should  say  to  the  Jury  as  a  niatlcr  of  law  that 
there  1b  no  ageiicj'-    Sinionds  v.  \Vri;.'liinian.  .'.ti  Mr.  l-O.  .Vs  I'ac.  lliMi  ilMUM. 


S52  ACTIONS  (Part  4 


WILCOX  V.  HINES. 

(Siunoir.o  Cdurt  of  Tennessee,  1897.     100  Teun.  524,  45  S.  W.  781,  G6  Am.  St. 

Kop.  701.) 

Action  for  injuries  caused  by  the  falling  of  a  porch  of  a  house 
owned  by  defendant  Wilcox  and  leased  to  plaintiff's  father.  There 
was  evidence  that  Wilcox  knew  of  the  rotten  timbers  in  the  porch 
and  promised  to  have  them  fixed,  that  shortly  after  a  carpenter 
fixed  the  porch  by  putting  a  wooden  post  under  it.  Judgment  for 
plaintiff  for  $4,500  damages.  Upon  a  remittitur  by  plaintiff  of 
$3,000  the  circuit  judge  overruled  a  motion  for  a  new  trial,  and 
pronounced  judgment  for  plaintiff  for  $1,500. 

McAlister,  j.3  *  *  *  The  third  assignment  is  that  the 
court  erred  in  admitting  testimony  that,  after  the  post  beneath  the 
porch  was  fixed,  the  workman  remarked,  "Now,  that  is  safe."  On 
this  subject  the  court,  in  its  fifth  instruction  to  the  jury,  said,  viz.: 
"If  you  believe  from  the  proof  that  the  carpenter  was  sent  there 
for  the  purpose  of  making  the  repairs  by  the  defendant  or  his  au- 
thorized agents  in  charge  of  the  property,  then  the  statement  or 
assurance  of  said  carpenter,  while  performing  the  carpenter's  work, 
with  reference  to  the  porch  being  safe,  on  the  completion  of  the 
work  he  had  been  sent  to  do,  would  be  admissible,  and  such  state- 
ments would  be  binding  upon  defendant;  but  if  the  proof  fails  to 
establish  the  fact  to  your  satisfaction  that  defendant  or  his  author- 
ized agents,  etc.,  did  send  said  carpenter  upon  the  premises  for  the 
purpose  of  making  the  repairs  upon  said  porch,  then  said  carpenter 
was  not  the  agent  or  representative  of  defendant,  and  defendant  is 
not  bound  by  anything  done  or  said  by  said  carpenter  in  making 
said  repairs." 

The  evidence  above  mentioned  was  objected  to  upon  the  ground 
that  the  court  must  find,  before  admitting  such  declarations,  that 
the  negro  who  fixed  the  post  was  the  agent  of  defendant.  It  being 
a  matter  of  controversy,  upon  the  proof,  vi^hether  the  negro  post- 
fixer  was  employed  by  the  defendant,  the  court  declined  to  adjudge 
the  question  of  agency,  but  left  it,  as  a  disputed  question  of  fact, 
for  the  settlement  of  the  jury.  The  alleged  error  of  the  trial  judge 
was  in  submitting  the  admissibility  of  testimony  to  the  jury,  and 
in  not  determining  it  himself.  It  is  insisted  that,  if  the  admissi- 
bility of  the  testimony  depends  upon  any  fact,  that  fact  must  be 
found  by  the  court  to  exist.  We  are  of  opinion  the  ruling  of  the 
circuit  judge  was  correct.  In  1  Am.  &  Eng.  Enc.  Law  (2d  Ed.) 
p.  967,  the  rule  is  stated  thus:  "If  the  evidence  adduced  to  support 
a  claim  of  agency  is  undisputed,  whether  it  exists  or  not  is  one  of 
law,  for  the  court.    Whenever  it  is  disputed,  however,  it  is  one  of 

»  Part  of  the  opinion  is  oniittecL 


Ch.  4)  TRIAL — PROVINCE   OF   COURT   AND  JURY  853 

mixed  law  and  fact,  for  the  consideration  of  the  jury,  aided  by  in- 
structions from  the  court." 

In  the  case  of  Gulick  v.  Grover,  33  N.  J.  Law,  463.  97  Am.  Dec. 
728,  it  was  held  that  "when  the  facts  are  undisputed  the  question 
whether  an  agent  has  the  requisite  authority  to  bind  his  principal  is 
a  question  of  law,  for  the  court,  whether  such  authority  is  sought  to 
be  sustained  by  a  previous  authorization  or  by  subsequent  ratifica- 
tion." 

In  the  case  of  Loudon  Sav.  Fund  Soc.  v.  Hagerstown  Sav.  Bank, 
36  Pa.  498.  78  Am.  Dec.  390,  the  court  said,  viz.:  "If  the  authority 
[of  the  agent]  be  created  by  power  of  attorney,  or  other  writing,  the 
instrument  itself  must,  in  general,  be  produced;  and  since  the  con- 
struction of  writings  belongs  to  the  court,  and  not  to  the  jury,  the 
fact  and  scope  of  the  agency  are  in  such  cases  questions  of  law.  and 
are  properly  decided  by  the  judge.  But  the  authority  may  be  by 
parol,  or  it  may  be  implied  from  the  conduct  of  the  employer  in 
sanctioning  the  credit  given  to  a  person  acting  in  his  name.  ♦  *  * 
And  in  all  instances,  where  the  authority,  whether  general  or  spe- 
cial, is  to  be  implied  from  the  conduct  of  the  principal,  or  where 
the  medium  of  proof  of  agency  is  per  testes  [by  witnesses],  the 
jury  are  to  judge  of  the  credibility  of  witnesses,  and  of  the  implica- 
tions to  be  made  from  their  testimony."  The  court  then  said  that : 
"As  the  plaintiff  here  did  not  produce  any  written  evidence  of 
Easten's  agency,  it  was  the  dtity  of  the  court  to  inform  the  jury 
what  constitutes  agency,  express  or  implied,  special  or  general,  and 
to  refer  to  them  the  questions:  First,  whether  the  evidence  satisfied 
them  that  Fasten  was  either  the  general  or  special  agent  of  the  de- 
fendants; and.  second,  whether  the  issuing  of  the  certificate  in 
suit  was  within  the  scope  of  his  authority."*  Mecheni,  Ag.  § 
106.     *     *     * 

Judgment  affirmed. 

••  Katikkation.  Tho  sarno  i»rliiflplp.s  eovorn  (ho  coiulnct  of  tho  trlnl 
when  the  dc'lslnn  hliiK'*s  upon  ratiticiitlon  <if  the  acriiCs  ixts.  WriK'ht  v. 
Vineviinl  M.  I'..  (Mmrcli.  T'J  Minn.  7s.  71  .\.  W.  KM.',  ds'isi;  I{jipl(|  Hook  \  Kye 
Co.  V.  Dc  Knylor.  117  .Mhli.  .'■)I7.  7(!  N.  W.  7(!  (ls'.>Si;    Siinfoid  v.   I'ounliiln.   «!> 

Misc.  Hep.  :;(H.  '.p;>  .\.  V.  Snpii.  'S.',\  (ItMMJ) ;    SI n   v.  Johnson,  l(i.">  .\ln.  ;!ll.  Hi 

South.  S,S4,  .''.:'.  Am.  Sf.   Kep.  125  (1K94).     See.  ulso.  nute.  pp.  100.  111.'.  ;n(!. 


854  ACTiOxNS  (i'art  4 

CHAPTER  V 

JUDGMENT  AND  DAMAGES 


CASSABOGLOU  v.  GIBCS.  . 

(Qiioon's  Rc-mh  Division  of  the  IIif,'b  Court  of  Justice,  1SS2.    9  Q.  B.  Div.  220, 
51  L.  J.  Q.  1?.  50:5.  47  L.  T.  Kep.  98,  40  J.  T.  568.) 

Watkin  Williams,  J.  This  was  a  Special  Case  stated  by  con- 
sent of  the  parties  for  the  opinion  of  the  Court  as  to  the  measure  of 
damag^es  which  the  plaintiff  was  entitled  to  recover  against  the  de- 
fendants under  tiie  following  circumstances :  The  plaintifif  is  a  mer- 
chant in  London.  The  defendants  are  commission  agents  at  Hong 
Kong,  having  an  agency  in  London.  On  the  23rd  of  March,  1880, 
the  plaintiff  inquired  of  the  defendants  by  telegram  at  what  price 
they  would  buy  for  him  cases  of  the  finest  dry  new  crop  Persian 
opium.  The  defendants  replied  to  this,  and  on  the  25th  of  March 
the  plaintiff  gave  them  orders  to  buy  for  his  account  certain  cases 
of  the  opium  described,  and  to  have  them  shipped  by  mail  steamer. 
About  the  26th  of  March,  1880,  the  defendants  purchased  for  the 
plaintiffs  what  they  believed,  though  erroneously  as  it  turned  out,  to 
be  finest  dry  new  crop  Persian  opium,  and  on  the  30th  of  March  by 
letter  advised  the  plaintiff  of  the  purchase.  On  the  7th  of  April, 
1880,  the  defendants  forwarded  to  the  plaintiff  invoices  of  the  opium, 
and  advised  him  that  they  had  drawn  upon  him  for  the  amounts — 
namely,  £1,221.  3s.  lid.  and  £2,346.  12s.  The  plaintiff  duly  accepted 
and  paid  these  drafts.  Upon  the  arrival  of  the  opium  in  London  it 
was  discovered  that  no  part  of  it  was  in  accordance  with  the  order, 
but  it  was  soft  and  oily,  and  unfit  for  the  purposes  to  which  the 
finest  dry  Persian  opium  is  applicable.  It  is  admitted  for  the  pur- 
poses of  this  case  that  there  was  not  in  the  market  at  Hong  Kong 
any  finest  dry  new  crop  Persian  opium,  and  that  the  defendants  could 
not  have  purchased  any  for  the  plaintiff.  The  plaintiff  immediately 
rejected  the  whole  of  the  opium,  and  refused  to  accept  it.  The  plain- 
tiff, having  already  sold  a  portion  of  the  opium,  had  to  make  an  al- 
lowance to  the  purchasers  of  £170.  on  account  of  the  inferiority  of 
quality.  The  remainder  of  the  opium  was  sold  at  a  lower  price  than 
that  paid  for  it  by  the  plaintiff.  The  plaintiff  then  brought  this  ac- 
tion against  the  defendants  for  compensation  for  his  loss,  and  in 
clause  15  of  the  case  his  claim  is  thus  expressed:  "The  plaintiff 
claims  to  be  recouped  or  paid  by  the  defendants  the  difference  be- 
tween the  market  price  of  the  article  ordered  and  the  proceeds  of 
the  sale  of  the  drug  actually  sent,   as  damages  for  the  above-men- 


Ch.  5)  JUDGMENT    AND   DAMAGES  855 

tioned  alleged  breach  of  the  contract  of  agency  or  alleged  failure  to 
perform  at  all  the  said  contract,  or  alleged  gross  and  culpable  negli- 
gence as  such  agents  in  their  conduct  of  such  agency  and  perform- 
ance of  their  duties  in  connection  therewith,  or  as  damages  for  the 
breach  of  warranty  and  promise  to  purchase  alleged  to  be  contained 
in  the  telegrams  and  letters.  The  defendants  have  paid  into  Court  the 
sum  of  £300.,  and  the  plaintiff  admits  that  if  the  defendants  are  only 
liable  to  make  good  the  loss  actually  sustained  by  him  in  consequence 
of  the  defendants'  breach  of  duty  the  £300.  is  sufficient  to  satisfy  his 
claim,  and  the  question  is  whether  the  plaintiflf  is  enliilod  to  claim  for 
loss  beyond  that  amount." 

We  are  of  opinion  that  the  plaintiff  is  not  entitled  to  recover  from 
the  defendants  anything  beyond  his  actual  loss.  The  plaintiff  em- 
ployed the  defendants  as  his  agents  to  purchase  the  opium  for  him, 
and  their  duty  was  to  use  due  care,  skill  and  diligence  in  executing 
his  orders,  and  for  their  failure  in  this  respect  they  are  liable  to  the 
plaintiff  for  all  loss  and  damage  sustained  by  him  through  their 
omission  and  negligence. 

The  plaintiff  seeks  to  treat  them  as  vendors  of  the  opium  to  him, 
and  to  hold  them  responsible  for  damages  as  for  a  breach  of  war- 
ranty of  the  kind  and  quality  of  the  goods,  in  which  case  the  meas- 
ure of  damages  would  be  not  merely  the  difference  between  the  cost 
to  him  of  the  goods  and  their  real  value,  but  the  difference  between 
the  value  of  goods  of  the  description  sold  and  of  the  goods  actually 
sent.  A  single  illustration  is  sufficient  to  shew  the  fallacy  of  the 
plaintiff's  contention.  Suppose  one  instructs  a  commission  agent  to 
purchase  for  him  a  very  valuable  original  picture,  if  it  should  be 
offered  for  sale,  and  the  agent  carelessly  l)ids  for  a  jiicturc  under 
the  belief  that  it  is  the  original,  and  it  is  knocked  (Knvn  to  him  for, 
say,  £100.,  and  he  informs  his  employer  that  he  has  bought  the  pic- 
ture for  that  sum,  and  his  employer  remits  the  money,  ajid  the  pic- 
ture is  forwarded,  but  uj^on  arrival  is  discovered  to  be  merely  a  copy. 
The  employer  rejects  the  picture,  and  it  is  sold  for  £^K).  Xow  sup- 
pose that  if  it  had  been  tlie  original  |)icture  it  would  have  been  worth 
il,000.  Is  the  agent  liable  for  £*^10.  damages,  or  only  for  the  actual 
loss  caused  to  his  employer  through  his  want  of  care  and  skill.*  It 
seems  to  us  that  the  latter  is  the  true  measure  of  damages,  and 
therefore  that  our  judgment  should  be   for  the  defendants. 

Judgment  for  the  defendants. 

1  Tho  i<l<'u  of  (l.'iiiiiiKJ's  Is  t<»  i;lvi«  to  tlio  i»rliirlpnl  n  rocoimxiiisp  for  the 
wronc  (lone,  fur  the  U>hh  siistiiiiu'd  l»y  (lie  )ii:<'iifH  (li-riiiilt.  Iliiiiilltnii  v.  ("<iii- 
i.iiit'liMiii,  I'V'tl.  <"iis.  .\(i.  ry.U's,  '2  Itrock  .T»(t  (IM'Si,  jmt  Miirsluill.  Clnult  JikIko; 
I'liiiiil)  V.  ('jiiii|.Im-II.  I'J'.l   111.   101.   IS  N.   Iv.  7!M)  (isssi. 

.*^in'f'iil)if Ivc  (liiiiiM^cs,  ilf|i<>n(lliiu'  oil  |i()ssllili>  H<li»MiM'H.  hIiouM  init  Im'  clvcti. 
Rell  V.  CiiiinlnKliaiii,  .'J  IVt.  GU,  7  L.  Kd.  (KM)  (1KJ(»),   por  .Murslmll,  C.  J. 


856  ACTIONS  (Part  4 

FOLSO^r  V.  AIUSSEY. 

(Supremo  Judidal  (\nii{   ol"  Maiiu".  IKV.l     10  Mo.  297.) 

Dofoiulant  sold  lumber  for  plaintiff  to  one  Houdlette,  taking  a 
note  from  the  vendee,  who  was  doing  a  large  business,  but  who 
proved  to  be  insolvent.  Defendant  took  some  steps  to  secure  the 
debt,  getting  a  note  signed  by  Houdlette  and  one  Lilly,  but  was  neither 
careful  nor  skillful  in  following  it  up  and  in  trying  to  realize  on  the 
security  taken.  It  appeared,  however,  that  no  security  of  value 
could  have  been  obtained.  Before  the  insolvency  of  the  vendee  ap- 
peared, defendant  had  made  a  provisional  settlement  with  plaintiff 
by  giving  his  note  for  $653.43,  it  being  understood  that  he  should 
pay  only  what  he  collected.  Plaintiff  brings  assumpsit  on  the  note. 
\'erdict  for  defendant. 

Weston,  J.  The  jury  have  found  that  the  defendant,  in  relation 
to  the  business  confided  to  him,  had  been  guilty  of  no  negligence 
to  the  prejudice  of  the  plaintiff,  or  by  which  he  had  suffered  loss. 
To  omit  to  do  that,  which  if  done  would  have  been  fruitless  and 
unavailing,  can  in  no  proper  sense  be  denominated  negligence. 
The  jury  were  upon  this  point  properly  instructed  ;  and  it  was  their 
province  to  pass  upon  the  facts.  Although  the  defendant  had  done 
his  duty  to  the  plaintiff,  as  the  jury  have  found,  yet  he  might  have 
assumed  to  himself  the  Houdlette  debt,  and  the  Judge  was  re- 
quested to  rule  at  the  trial,  that  this  was  the  inference  necessarily 
to  be  drawn  from  the  facts.  The  defendant  was  endeavorin.^  to  se- 
cure his  principals.  His  proceedings  from  time  to  time  were  di- 
rected to  that  object.  The  security  from  Lilly  was  not  divided 
precisely  as  it  ought  to  have  been;  but  it  all  turned  out  to  be  of 
no  value. ^  We  perceive  nothing  in  the  facts  conclusively  proving 
that  the  defendant  made,  or  intended  to  make,  the  Houdlette  debt 
his  own.  He  was  not  baund  to  take  that  hazard  upon  himself. 
He  was  required  only  to  be  faithful  to  his  trust;  and  the  jury  have 
settled  all  the  facts  in  favour  of  the  defendant. 

Judgment  on  the  verdict. 

2  It  is  always  cnnipetent  for  the  asent  to  show  that,  notwithstandins  his 
fault,  his  principal  has  suffered  no  (laiiiaRos.  First  Nat.  Bank  v.  Fourth  x\at. 
Bank,  77  N.  Y.  320,  :v.',  Am.  Kep.  G18  (1870).  In  such  case  he  will  he  liable 
for  onlv  nominal  damafces  at  most.  Allen  v.  Suydam,  20  Wend.  .321,  .32  Am. 
Dec.  r,-,ri  as-.W) ;  Van  Wart  v.  Wooley,  3  B.  &  C.  430,  10  E.  C.  L.  204,  1  M.  & 
M.  .'520,  22  E.  C.  L.  niH  (1824). 

There  can  be  no  recovery  for  the  negligence  of  the  agent  from  whom  no 
loss  is  shown,  even  thoutrh  it  is  possible  there  may  be  a  loss  in  the  future. 
Porter  v.  Woodruff.  .30  X.  .1.  Eq.  174  (1882). 

For  cases  on  damages  against  agent,  see  ante,  pp.  559,  568. 


INDEX 


[the   figures    UF.IER   TO    PAGES] 


ACCEPTING  BENEFITS, 

Katificatiou  by,  see  Ratification. 

ACCOUNTING,  see  Liability  of  Ageut;    Broker. 

ACQUIESCENCE, 

Katiticatiou  by,  see  Ratilication. 

ACTIONS,  see  Evidence;    Trial;    Judgment 

ACTIONS,  FORM  OF,  see  cases  under  Liability. 
In  general,  note  Sll. 

In  contract  or  in  tort,  McMorris  812 ;    note  S13 ;    Ashley  814. 
In  law  or  in  equity.  Moss  'isry;   King  M5  and  note. 

Bill  in  eiiuity  approia-iate,  Vilwig  Sltj;    note  817;    UnderhiU  818. 
Various  remedies  available.  McMorris  812;   note  813. 

Case  or  trover,  Minneapolis  559 ;    Moore  595 ;    Loveless  811 ;    McMor- 
ris 813. 
Or  assumpsit,  Minneapolis  560 ;   Ashley  814. 
Contract  ajrainst  agent,  note  597. 

Trover,  when  appropriate,  Perkins  693  and  note;    McMorris  813;   Bee 
also  Conversion. 
Against  agent,  Schanz  193 ;    Minneapolis  558;    Salem  578;    Moore 

594. 
By  agent  vs.  third  person.  Faulkner  719. 
By  principal  against  third  person.  (Jllniore  807;    note  SOS. 
What  amounts  to  conversion.  Bartels  .")97  and  note:    Perkins  693 
and  note;    GllmoroS07;    Loveless  811;    McMorris  813  and 
note. 
Demand  unnecessary.   Bartels  ."9t;. 
Trespass  by  ageut  against  tlilnl  jicrson.  Porter  720. 

For  disolu'dience  l>y  .igt'iit.  Minneapolis  rt't'.). 
Assumpsit  l)v  iirincipal.  McMorris  sl2;    note  sl3;    A.shloy  814. 

By  agent   vs.  Iliird  person.  Gunn  701;    Thatcher  701;    Leterman 

701 ;    Short  709. 
By  tiiird  person  vs.  principal,  Wt-bster  724. 
Bv  principal  vs.  third  pi-rson.  P.celiee  792. 

\s.  iigent;    .Minnciipolis  .''.<;(»:    McMorris  813 ;    .\sliiey  814. 
Quantnni    ini-rnlt,  ^     ,.,, 

Rec<»v.'ry  in  for  agent's  services.  Glover  229;    Millar  (ilO;  Mian 

When    contnwt    spe<-i11cs   amount.    Kelly   2<50;     Wallii<-e   (MVS ; 

note  609.  (51  (I;    'linilierlnUe  «516. 
Wlieii   princip:il   terniinittrv  Mirmry.   niidobrand  623;     M.-rri- 

man  <;27  :    ,\ttrlll  «!;',2  ;    Stier  2:!7. 

ACTIONS,  P.\HTli;s  'I'M.  see  also  TJabiilly. 

Proper  parties  In   giMn-ral,  Beebee  792;    note  810. 

Principal's  rigid  suiM-rior  to  agent's.  Snrg<-nt  7<i3  and  cnsow  following. 

ADMISSIONS  OF  AGENT,  see  Liability  of  Prlnciiiai;    Evidence. 

GoDD.Pu.&A.  (8571 


858  INDKX 

[The  figures  refer  to  pages] 

ADOPTION. 

nistiiiiiuislu'd  from  ratilicatlon.  see  Katificatlon. 

APVANCKS. 

l?y  factor,  (Jroonloaf  55.'?;    FoiUl  557. 

AUVKK.^^K   INTKUKST. 

Of  awiit  a,i;ainst  principal,  see  Liability  of  Agent. 

AGKNC^Y. 

l>eliuc(l.    StcnKuiiaii  4. 

Histiiiuuishod  from  sale,  Echols  2;   Taylor  13;    Snelling  13. 
linlt'peiHleiit  contractor,  note  10. 
Tartnersliip,  note  11. 

Master  anil  servant,  Kingau  9;    note  10. 
Lease,  note  11. 
Trust,  Taylor  10  and  note. 
Maxims  of,  see  Qui  Facit. 

Parlies  to.  see  .Vt-'ont;    I'rincipal ;    Joint  Principals ;   Joint  Agents. 
I'uriiose  for  which  created,  see  Purposes  of  Agency. 
How  created,  see  Creation  of  Agency;    Authority. 
Classes  of.  in  general,  Gibson  20. 

General  and  special,  Gibson  20;   Trundy  51;    see  also  General  Agent; 
Special   Agent;    Liability   of  Principal. 
Double  Agency, 

Agent  act  for  himself  and  his  principal,  Moores  298 ;    Hook  386. 

After  termination  of  the  agency,  Moore  208. 
Agent  for  two  iirincipals.  Kmi)ire  732;    note  733;    Truslow  737. 

Of  vendor  and  vendee,  Whitley  101 ;    Farnsworth  316 ;    Truslow 

7:56. 
When  lawful,  W^assell  734;    note  735. 

Ratified  by  both.  Truslow  737;    note  7.38. 
As  affecting  right  to  compensation,  Rupp  518 ;  Atterbury  636 ;  note  637. 
Termination  of,  see  Termination  of  Agency. 
Delegation  of,  see  Delegation  of  Agency. 

AGENT,  see  Liability;    Compensation;    Reimbursement  of  Agent. 
Defined.  Echols  1. 
Distinguished  from  servant.  Kingan  8. 

From  trustee,  Taylor  10 ;    note  10. 

From  independent  contractor,  note  10. 

From  lessee,  note  11. 
(General  and  special  agents,  Gibson  20;    see  also  Agency. 
T'niversal  agent,  note  21. 

Collecting,  liability  of.  Bradstreet  491;    note  493. 
How  terminated,  see  Termination  of  Agency. 
How  appointed,  see  Authority ;    Creation  of  Agency. 
For  what  purposes  employed,  see  Purposes  of  Agency. 
Must  act  in  name  of  i)rincipal.  Davis  23 ;    Combes  38. 

See  also  Execution  of  Authority. 
Who  may  act  as.  King  31  and  cases  following. 
Infant  as.  King  31;    Tebbetts  143. 
Cannot  act  for  self.  First  National  Rank  90;    MacGregor  214;    note  292; 

P.ank  .30S;    Mc.Mpin  .347;    Dowden  7.30;   see  also  Double  Agency. 
Ratification  by,  Trudo    100;    note  101. 
Right  to  appoint  subagent,  see  Delegation  of  Authority. 

AMBIGUOUS  AUTHORITY,  see  Construction  of  Authority. 

APPARENT  AT'TIIORITY.  see  Authority;    Estoppel. 

APPOINT.MENT  OF  THE  AGENT,  see  Authority;   Creation  of  Agency. 

ASSOCIATIONS,  see  Clubs. 

ASSUMPSIT,  see  Actions,  Form  of. 


INDEX  859 

[The  figures  refer  to  pages] 
ATTORNEY  AT  LAW, 

Authority  of  agent  to  employ,  Eklridge  4S5 ;    Bacon  640. 

Duty  and  authority  in  making  collections.  Miller  429;    Morrison  565. 

Liability  as  collecting  agent,  see  Delegation  of  Authority. 

For  mistakes,  note  562. 
Compensation  of,  Vilas  610. 

ATTORNEY  IN  FACT, 

How  constituted,  Caley  22;    see  also  Creation  of  Agency. 
As  collecting  agent,  note  432. 
Delegation  of  authority  by,  Eldridge  4S5. 

AUCTIONEER, 

As  agent  for  undisclosed  principal,  note  675;    Mercer  676. 
Liability  for  money  paid  by  mistake,  Mowatt  683;    Burrough  6S4. 

For  property  .sold  without  title,  Moore  686. 
Sue  on  contract  made  in  own  name,  Fisher  707. 

AUTHORITY  OF  AGENT,  see  Creation  of  Agency;    Ratification;    Termina- 
tion;   Construction  of  Authority ;    Execution  of  Authority. 
How  conferred,  see  Creation  of  Agency. 
Burden  of  proof  to  show,  see  Evidence. 
Nature, 

Implied,  see  Creation  of  Agency. 

When  arises,  Trundy  5.3;    Farmers  .335. 

When  not,  Gregory  56;    Williams  l.")4;    Biirchard  2S7;    Patterson 

329. 
Distinguished  from  apparent,  Columbia  57;   see  also  Estoppel. 
Extends  to  acts  incirlental  to  emplovmeiit.  Dunwoodv  .340;    note 
342.  4:{9. 
Limited  to  acts  of  like  kind,  Mc.Vlpin  34S. 
Express,  verbal.  Farmers  .335;   see  also  Express  Authority. 
Implied  added  to.  Dunwoody  340;    Valentine  4(».".. 
Written,  under  .seal.  Sheppard  65;   see  Seal,  Authority  Under. 

When  writing  n^piired.  Caley  22;    .see  al.so  Tower  of  Attor- 
ney;   Construction  of  Authority;  Exi)ress  Authority;  Stat- 
ute of  Frauds. 
Scojte  of,  ("l.iflin  .3.38;    see  also  Construction  of  Authority. 
Oral  evidence  to  enlarge,  Claflln  .3.3S ;    Reese  .341. 
To  exjilain.  Reese  .341;    see  also  Evidence. 
Api>an'iit  authority  and  aetual.  Gregory  .54;    see  also  Estoppel. 
Of  agent  of  corporation,  see  Corporations. 
Defined,  note  325. 

Is  actual  as  to  third  persons.  fJrlggs  .300  and  note;    L)jdlow  305 
and  note;     note  .325 ;    Keith  .326;    Saugerties  'MM);    Heath  .3('i(;; 
Daylight  .380;    Illggins  .391. 
Indicia   of  authority,   IMckering  319;    Gilinian  .320;    .Vntrlm  ::21  ; 

•Tolinston  .''.2.3. 
Amounts  to  estoppel.  Patterson  3.30. 

Limited  to  appearances  giv«'n   by  iirln(l|);i!.   Ilurchard  2^7:    note 
2S9:    Gates  .314:    Patterson  .329 ;    Van  Eppes  .3.32 ;    FlRuelni  3.3.3. 
Insfruc-tlons  of  principal  as  limiting,  .Miissey  21M. 

Secret,  as  to  third  persons.  (;ran(!  R.-iplds  296;  CJriggs  .300; 
Ilaubelt  .'!02:  Ludlow  :!(i.3  and  note;  Unison  .301;  Ittink  .307  ; 
Farmers  ."'..36;  Padtlc  .'!4."'.;  Sorn'l  .".l.'>;  Pass  JCiI  ;  Day- 
light .3S0. 
Known  limitations,  llutson  .304;  Hank  306;  Brown  3S5;  hw 
also  Third  Persons. 
Extent  of  .'luthorlty.  In  general.  Burcluird  287;    note  2ss. 

How    limited.  <;regory  r,n;    note  2K.S ;    (iraiid   Uaplds  296;    note  301; 
(Jates  31.3. 
When  written.  ("uinnilnH  29L 
Includes  what.  .McAlpln  318;    Vnlontlne  lO.y 


SCO  INDKX 

[The  figures  refer  to  pages] 

AUTHORITY  OF  ACIKNT— Contiiimd, 

Thiitl  porsdu  asccrtniii  at  iH'iil,  ('iiiuiniiis  291;    note  288,  292;    Gates 

313;   see  also  Third  rorsons. 
Usaw  ami  custoiu  as  allVi't iiiir.  Hurclmrd  28S;    Cawthorn  311;    Gates 
314;     Johnston    ".L'l;     Keith    .".L'T ;     Dunwoody   340;     McAlpin    34S ; 
ray  no  3.SL'. 
IncidcMl.il  iiowor.  Huifhanl  L'NS ;    Farmers  335;    Dunwoody  340;  Mc- 

Alpin  ."MS;    Spraiiue  300 ;    I'ayne  383. 
Seopo  of  antliority. 

Measured  by  holding  out  of  principal,  Haubelt  301;    note  322; 

Johnston  323. 
Depemls  upon,   note  334. 

Acts  within  scope   bind  principal,   Mussey  294;    Griggs  300. 
Frauds,  etc..  see  Torts. 

Outside  scope  of  authority,  Cummins  291  and  note;  Moores 
297:    Gates  313:    Gambill  834. 
Of  general  aseut  to  do  acts  naturally  resulting,  Grand  Rapids 
290:     Griggs  300. 
Limitations  on  rule,  Hutson  304. 
Acts  for  personal  benefit  of  agent,  note  292;   Moores  297;    Bank 

30S:    McAlpin,  349;    Hook  386. 
See  also  Double  Agency. 
As   shown  by  acts   or   representations  of  agent,    Cummins  292; 

note  293;    Mussey  29.5;    Grand  Rapids  296:    Moores  297. 
As    allecting   tort   liability   of  principal,    Birkitt   761   and   note; 
Mackay  763;    note  76.5; 'McCord  766. 
Of  general  and  special  agencies,  note  20;    Bank  307;    note  335;    Mc- 
Alpin 348. 
Presumption  agency  general  rather  than  special.  Sharp  829. 
Limitations  on  authority  in.  Gates  313;    Batty  350;    Young  .351; 
Brown  385;    Den  man  395. 
When  unknown.  Antrim  .321;    Sorrel  .345;    note  3S.5. 
Scope  of  apparent  authority,  Mussey  294;    Johnston  323;    Keith 
326;    note  .3.34;    Pacific  343;    Sorrel  .345;    Heath  366;    Wilson 
4.52. 
Distinctions  as  to  extent  of  general  and  special  authority,  see 
General  Agent;    Special  Agent;    note  350;    Young  351;    Bass 
3.51  :    note  3.52 :    Hoyer  776. 
Authority  to  borrow,  general  rule,  note  439. 
Power    perilous.    Exchange   4.33. 
When  not  implied,  Williams  1.54. 
Of  cashier  of  bank,  Moores  297. 
To  buy,  not  authority  to  lend  money,  Nye  168;    Salmon  356. 
Of  manager  of   business.  Beecher  .3.53;    note  358. 

Flow  limited.  Born  .3.53;    note  354. 
When  implied  from  previous  acts.   Smith  354;    note  358. 

Incidental  to  the  general  authority,  Salmon  356;    note  358. 
What   may  lie  bought.   Brown  3.57. 

On  credit,  Saugerties  .358  and  note;    Sprague  360;    Morey  361. 
To  collect,  when  implied,  in  general,  Barrett  414;    Butman  415. 
I'rom  cour.se  of  dealing,  Harrison  424;    note  425. 
From  possession  of  securities,  Clark  244;    Burchard  288;    note  289; 
Howard  392:    Roberts  415;    Martyn  416;    Wolstenholm  416;    Cur- 
tis 417:    Joy  419;    Smith  421;    Harrison  424;    Schmidt  822. 
From  itower  to  sell,  Cummins  291;   Capel  .390:   Higgins  .391. 
From  authority  to  solicit  order.s,  Ilahnenfeld  393;    Higgins  390. 

To  collect  interest.    Joy  418  and  note;    Smith  420. 
What  included.   McAlpin  349. 
When  remit  proceeds.  Bedell  .598. 
Of  collecting  agent  to  foreclose  moi-tgage,   P.nrchard  290. 
To  indorse  negotiable  paper,  Graham  430;    note  431. 


INDEX  861 

[The  figures  refer  to  pages] 
AUTHORITY  OF  AGENT— Continued. 

Receive  only  cash   in   payment,   Mann  411:    Barker  4-^6-    note  4''7- 
Dixon  428;    Miller   429.  '  "  ' 

Not  before  or  after  maturity.  Mann  411;    Schmidt  822. 
Compromise  or  compound  the  debt,  McAlpin  348;   Miller  429;   Tootle 
4:!2   and   note:    Very  44.3. 
To  manage  business.  Dunwoody  340:    Pacific  344;    note  439. 

Does  not  include  power  to  indorse  negotiable  paper,  Gould  439. 
To  lease  or    rent  property,  note   43".». 
To  settle  claims  and  bring  suit,  note  439. 
To  make  contracts  of  emplo.vment,  note  440;    see  also  Attorney  at  Law: 

Physician. 
To  make  and  indorse  negotiable  paper,  Graham  4.30;   note  431;   Exchange 
4.33;    note   4.34:    Gould   439. 
Strict  construction.  Bank  43(i:    Dusenbury  (;."».">. 
To  sell  personal  property,  see  Liability  of  Agent  to  Principal  for  Loyalty. 
Possession   as   proof   of.    Pickering  :519:     Peerless  :>(J3 ;     Covilf  304; 

Heath  3GG:    note  .'iOS;    Howard  392;    Higgins  390:    Schmidt  822. 
Not  implied  from   authority  to  solicit  orders,   Clough  308;    Higgins 
390;    Hahnenfeld  393. 
Or  to  buy,  note  309. 
Of  manager  of  business.   Scudder  :>09. 

To  warrant  quality.  Herring  370:    note  372.  373;    Brady  375;    West- 
urn  370;   Conkling  377:   Tpton  37^. 
To  rescind  sale,  Bradford  394;    Deninan  .395:    note  396. 
Not  to  exchange,  Trudo  100;    Taylor  ;;S4:    Hook  386. 
To  sell  for  cash  only,  note  384:    Hook  3S0. 
When   agent   may  collect,   Cummins   291;    Capel   390;    Higgins  391; 

Hahnenfeld   .39.3. 
To  lix  term.s,  Bass  351;   Daylight  379:    Stirn  .3S1 ;    Brown  .385:    Hook 

380. 
When  sell  on  credit,   Bark.sdale  318;    Upton  378;    Payne  382. 

Usage   and   custom.   Leach   388. 
Authority  of  factor.   Daylight  379;    Leach  .388. 

Of  auctioneer,    Ui)lon  ."{79. 
Maj'  sell  in  the  usual    manner,   T'pton  37.S. 

May  do  the  usual  and  ne<essary  things,  Keltli  .'!27:    Bass  351;  Payne 
3.<<.3. 
Limitations,  Brady   375;    Conkling  ;!77;    Payne  383. 
To  sell  real  estate. 

May  i)e  imitlied,  Marr  390;    l.yon  401. 
Must  be  clear,   note  397. 

Not  from   power  to    liiid    purihaser,    MiCullougli   .397;    Carstens 
400. 
When  written   power  rrMpilrcci,  (Carstens  309;    see  also  Express  Au- 
thority. 
Strictly    construed.    Penfoid    40.3. 
What  may   .sell.    Peiifold  403. 

Power  of  agent  to  Hx  terms,  Trundv  52:    McCiillmigli  .39S;    Fullerloii 
413. 
To    sell    on    rredlt.    Whitley    101. 
To  cnllcct   the  price.   .M.iiiii  4(IS:    note  4f>9. 
In  cash   (inly,   Miiiin    ill.    ilamptoii  412. 
.Not  after  agency  termlimtcd.  fInrU  244:    cf.   Pavol  240. 
To    make   <onveyaiicc    with    warranty.   Carstens  .3JK> :     Valentino 

405:  note  4<K! ;  Schultz  407:  note  40S;  Hcnistreet  445. 
Deed  as  «>i|ultalile  contr.Mcf  to  convey,  F.yon  KM;  see  Deed. 
To  modify  or  reschul.  Hampton  412:    Fullertou  413;    note  414. 

BAILEE, 

Agent  as,  Faulkner  719;   (Jllniore  s(»7;    LtvelesH  81L 


862  iNUKX 

[The  figures  rcfor  to  pnKOs] 

BANK,   soo   Caslilor;     Coriionitioii. 

As  ciilloctiiii:  ii^u'ont.  si'i'  l)('U';.'!iti()n  of  Authority. 

Mom>y  tlt>in)sito(l  in  niroiifs  ikuiu'.  note  r»'.)().  501;    (\'irt\voll  593. 

RANKUrrTl'Y.  .^ee  IVnniiiiitioii  of  AROUfy. 

0{  priiuipal  as  afftHtinu  liability  of  a.nont,    Ilaitop  GG9. 

BENIOFITS, 

Accoi>ta!i(o  (if  as  raliruation,   sco  Ivatilication. 

HLA.NK.S    IX   A   I)i:i:i). 

I'owi'r  to   till.   Slii'i'l'Mfil   (■)."):    ('fililicn  (IC :    uoto  (iS;    Swartz   09. 

BOKIJOW. 

Aiillioiity  of  aiii'iit  to.  Williams  1,53;    see  al.so  Authority  to  Borrow. 

BROKKlf. 

Authority  to  i-olloct,  Ili.u.uiiis  :VM. 

When  princiiial  undisclosed,  note  798. 
To  sell  in  own  name,  rielcering  319;    ITijisins  300. 
Heal   estate  broker.  i)o\ver  to  sell,  McCulloush  397;    note  398. 

Delined.   Carstens  :!00.  • 

Kiiiht  to  act  for  two  parties,  Gaty  513. 
Liability  for  acoounting.  Kinjc  '^15. 
Liability   when  principal  not  disclo.sed,   note  675. 

Compensation,   when  earned,  Kelly  259;    Carstens  399;    Gillett  G30;    At- 
trill  (i;{2;    note  634;    La  Force  634. 

From  both  parties,  Kupp  51S;    see  also  Double  Agency. 

When  forfeited,  Atterbury  ();}7 ;    see  also  Compensation  of  Agent. 
Who  to  sue  or  be  sued  on  contract  of,  Foi'd  791;    Beebee  792;    Humphrey 
793. 

BURDEN  OF  PROOF,  see  Evidence. 
BUY. 

Agent  to,   see  Authority  to  Buy;    Liability  of  Agent  for  Loyalty. 

CAPACITY  TO  ACT,  see  Principal;    Agent;    Clubs  and  Unincorporated  So- 
cieties. 

CARE  AND  SKILL,  see  Liability  of  Agent. 

CASHIER. 

Execution  of  drafts  by.  City  460. 

Liability  of  banks  on  checks  signed  by,  Liebscher  476;    Brenner  725. 

As  office  cash  keeper,  Exchange  433. 

CHECKS,  see  Authority  to  Make  Negotiable  Paper. 

CHILD,  see  Infant. 

CLUBS  AND  UNINCORPORATED  SOCIETIES,  see  Joint  Principals. 

Who  liable  for  contracts  of,  Ehrmantraut  113;   Eichbaum,  665;  note  666; 

Codding  CCS.. 
Not  i»artnerships,  Ehrmantraut  113;    Eichbaum  665;    note  666. 
Hatilication    by,   Elirinantraut  113. 

COLLECTING  AGENT, 

Liability  of,  see  Delegation  of  Authority. 

Authority  to  collect,  see  Authority. 
COLLUSION, 

I'.etween  agent  and  third  person,  note  807. 

COMMISSKJN  MERCHANT,  see  Factor. 

COMMISSKJNS  OF  AGENT,  see  Compensation. 

COMPENSATKJN  OF  AGENT,  see  Actions  in  Quantum  Meruit;    Lien. 
Right  in  general,  Krekeler  605;    Tiote  606;    Lockwood  607. 
Amount  of  pay,  Wallace  608;   note  009;    Millar  610. 

Of  attorney  at  law,  Vilas  010. 

When  contract  for  implied,  IlarrLsou  612. 


INDEX  863 

[The  figures  refer  to  pages] 

COMPENSATION  OF  AGENT— Continued. 

When  agency  for  illegal  purpose,  Lyon  40;    Trist  43;    note  46;    see  also 

Double  Agency. 
When  principal  refuses  to  carry  out  contract,  Goss  IDT. 
"VMien  agent  abandons  agency.  Tiniberlake  ('.1.5  and  note. 
When   discharged,   see   also   Reinibursonu'nt;    Atkin  li."57 :     Sheahau   227: 
Glover  '2'Ji)  and  following;    McFarreu  019;    note  020:    Hildebraud 
020;    Merriniau   027:    note  020. 
Construitivo  service  doctrine,  McMuUan  624;    note  627. 
When   disloyal.   Andrews   517:     note  51S:     Turubull   o21;    McKJnley   524: 
Ilahl  OlS;    Atterbury  037;    note  OTJS. 
Acts  as  mere  middleman.  Hupp  518. 
Commissions  when  earned.  Kelly  259;  Carstens  400;  Merriman  62S;  Gil- 

lett  030:    Attrill  032;    note  0;J4. 
When  fails  to  make  proper  accounting,  note  58S. 
When  agency  expires  before  purpose  accomplished,  La  Force  034. 

COMI'KO.MISE, 

Authority  of  agent  to,  see  Authority  to  Collect. 

CONDUCT  OF  PRINCIFAL, 

As   establishing   agency,    see   Creation   of   Agency;     Authority,    Implied; 
Estoppel ;    Ratification. 

CONFIDENCE,  see  Delegation;    Double  Agency. 

CONSTRUCTION   OF  AUTHORITY, 

In   view  of  surrounding   circumstances,    Lyon   401;    Brantley   440;    see 
also  Usage  and  Custom. 
And  of  the  whole  contract,   Taylor  12;    Trundy  52. 
When  written.  Cumnnns  292;     Farmers  .3.35.  fffjf 

Question  for  court,  see  Trial.  ♦ 

Strict    construction    power    of    attorney,    Cunnnlns    292;     Rrantley    411; 
note  442;    Renwick  44S. 
Includes   usual    and   necessary   acts.    Ileinstreet  445. 
Amliiguous  jxiwer.  Very  443;    lIopw<><»d  440. 
Restrained  to  business  of  i)rincipal,  Rrantley  441;    Ronwiok  449. 
General  words  how  construed.  Horn  3.54;   Renwick  lis. 
Intentions    regarded,    Marr    390;     note   40();     llemstrtH't   445    and    note; 
Keidan  473. 
Al.so  way  intent  is  effected,  Clarke  454. 
To  convey   land.    I'enfold  404;    note  400;    Ilemstreet  445. 

CONSTRUCTIVE   SERVICE,  see  Compensation. 

CONTI N( ; ENT  FEES, 

Lyon  40;    Trist  40  and  note. 

CONT I N  U 1 NG   EM  FLOY  .M  E  NT, 

Presumed  at  former  wages,  Wallace  OOS;    see  also  Yearly  Illrhig. 

CONTRACT, 

Of  agencv,   see  Creation  of  Relation. 

Illegal,  see  Ratl!l«ation ;    Liability  of  Agent   for  Accounllng;    Conip<MisH- 

Agi'nt  on  what  contract   liable,  see  Liability  of  Agent  to  Third  IVrBonifc 
Execution  of  by  agent,  wee  Execution  of  .\utli<irlty. 

CONTRACTS   UNDER   SEAL, 

Power  of  altnrncy.  s.-e  Srsi\.   Autiiorlfy   Under. 
Execution  of  by  au'ent.  see  Execution  of  Authority. 

Ill    presence  of  |.iiiiclpal,    LewlH  71. 
Deed  as  e<piitable  (oiitim-t  to  convey,  hoq  Ih'ed. 

CONVERSION  HV  THE  AGE.NT,  nee  Actions. 

Of  money,  Scbanz  19:;;    Salem  .57S:    noteHSO;    note  59.  ;    Kcdell  5D8. 
Ratitlcation  of  by  the  prlndiial,  I.«*wlw  110. 


S()4  iM>i:x 

[The  figures  refer  to  pages] 

rOKI-OUATlONS. 

Who  !i-,>iit   of.  Tnindy   r)2. 

Ai:i>nt  how  nppoliittMl.  note  (51. 

(.'Mil  ;ut  oiil.v  li.v  iiiri'iit.  .MiMiipliis  SO;    Zottiiian  131;    Modern  599. 

Aiitliorily   of  rrosidi'iit,  Thoiuiisou   lOo. 

Ma.v  nillf.v  lu'ts  of  ii.mMits.  Kclsi'.v  OS;    note  99. 

Kilt ifniit ion  b.v  of  acts  of  proiuotors,  Kmpross  91;    Battelle  92. 

Katitiiatiou  h.v.  how  made.  7otliiiini  129. 

KlVect  of,  Mi'irhiiiits  4(il. 
Scope  of  appan>iit  anthorit.v  of  agents,   Johnston  324. 

Lialiilit.v   on   unanthori/.ed   contracts   of  agent,   Haupt  658. 

Lialiilit.v  of  a;;ent,  Thilnian.v  i'A'i-. 
Notice  to  directors  of.  rieiiiciit  779;    FairHeld  7S0  and  note. 
H.v-hiws  of.  as  limiting  authority  of  agent,  note  304. 

COURT, 

Agency  wlien  question  for,  see  Trial. 

CREATION  OF  AGKXCY,  see  Authority;  Written  Authority;  Power  of  At- 
torney ;    Seal,   Authority   Under. 

Depends  on  contract,  Ilaney  4S;    note  49. 

Rests  on  will  of  principal,  Raney  48;  Pole  49;  Marbury  209;  Burke 
210;  Burchard  2S7;  note  288;  see  generally  Termination  of  Agency 
by  Revocation. 

now  created  in  general,  Caley  22 ;  Pole  49 ;  Geylin  50 ;  note  334 ;  Farm- 
ers IVA't;    Sharp  829. 

Oral  authority,  Trundy  51. 

By  estoppel,  Pole  50;  Columbia  58;  note  59;  Johnston  324;  Harrison 
425. 

By  writing,  see  Power  of  Attorney;  Written  Authority;  Express  Au- 
thority. 

Implied  agency,  Pole  49;  Geylin  50;  Trundy  51;  note  53;  Gregory  55. 
Acts  and  conduct  of  principal,  Haubelt  301;  see  also  Authority,  Im- 
plied. 

By  ratification,  Trundy  52;    Soames  173;    MacLean  174 

By  a  corporation.  Trundy  52. 

CREDIT,  see  Authority  of  Agent  to  Buy. 
CUSTOM  AND  USAGE,  see  Authority;    Usage. 

DAMAGES,  see  Judgment;    Compensation. 

For  di.sobedience  of  agent,  Minneapolis  559. 

For  negligence  of  agent.  Walker  508;    Cassaboglou  855. 

No  loss  shown,  Folsom  856  and  note. 
For  wrongful  discharge  of  agent,  see  Compensation  of  Agent;    see  also 

Parke  218;    Glover  232;    Jacobs  240. 
Rule  as  to  measure  of,  Minneapolis  559;    Adams  564;    Walker  568;    Cas- 
saboglou 855  and  note;    Fol.som  856  and  note. 
In  action  by  third  person  against  principal,  Cawthorn  312. 
DEATH,  see  Termination  of  Agency. 

DKCIOIT,  see  Liability  of  Principal  and  Agent  in  Tort. 
Actions  for,   Thilmany   602. 

DECLARATIONS  OF  AGENT,  see  Evidence;    Liability  of  Principal. 
DEED, 

Authority  of  agent  to  execute,  .see  Contracts  under  Seal;    Authority  to 

Sell  Real  Estate;    Blanks  in  a  Deed;    Execution  of  Authority. 
As  equitable  contract   to  convey,  Lawrence  65;    Morrow  70;    Lyon  401; 

see  also  Seal,  Authority  Under. 
Execution  of  in  principal's  presence,  Lewis  71. 
DEFENSES, 

OiM-n  to  third  pereon,  see  Liability  of  Third  Person  to  Agent;  to  Prin- 
cipal;   Set-Off. 


INDEX  865 

[The  figures  refer  to  pages] 

DEFINITION, 

Of  "agency,"  Sternaman  4. 

Of  "agent"  Echols  1. 

Of  "apparent  authority."  note  325. 

Of  "estciipel."  Steffens  77. 

Of  "factors;,"  Blackstone's  Com.  1. 

Of  "general  and   special   agents,"   Gibson  20;    Keith   326;     Pacific  343; 

Sorrel  346;   McAlpin  348. 
Of  "ratiflcation,"  Ellison  73 ;    First  Nat.  Bank  73 ;    Alexander  79 ;    Town 

176. 
DEL  CREDERE  AGENCY,  see  Snelling  15,  18. 

DELEGATION  OF  AUTHORITY, 

Power  to  delegate.  Catlin  483;    Bonwell  484. 

By  joint  agents,  Loeb  481. 
Duties   involving    no  confidence   or  discretion,    Eldridge   485;     Norwich 

486. 
Usage  and  custom.  Bonwell  484;    Darling  490. 
Subagent  employed  by  consent  of  principal.  Blowers  489. 
Suliagent  is  agent  of  whom,  Woods  144;    Louisville  488;    Blowers  489: 

Skinner  490. 
Required  by  necessities  of  agency.  Louisville  488. 
Liability  of  agent  for  acts  of  subagent.  Clark  60. 

Of   a    collecting   agent   for   acts   of  correspondent.   Bradstreet  491 : 

Simpson  493;    Hoag  503. 
Of  a  bank.   Simpson    494;    note  498;    Bank  499:    note  502. 
Of  an  attorney  at  law,  Bradstreet  491 ;    note  493. 

DEMAND, 

Necessity  of  before  suing  agent  for  conversion,   see  Actions  in  Trover. 
Liability  of  Agent  for  Accounting. 
In  case.  Loveless  812. 
For  collections,   Bradstreet  492. 

DEPOSITS  IN  BANK,  see  Bank;    Trust  Fund;    Liuiiility  of  Agent  for  Ac- 
counting. 
DESCRIPTIO  PERSON/"E,  see  Execution  of  Authoritj 

DIRECTOR. 

Authority  of,  see  Corporations;    Notice. 

DISCHARGE  OF  AGENT,  see  Termination. 

DISCRETION,  see  Delegation ;    Double  Agency. 

DISOBEDIENCE, 

(Jf  instructions,  see  Lialiility  of  Agent  to  Oiiey. 

DOI'BLE    .\f;ENCY,    see    Agency;     Agent;     Authority;     Compensation    of 

Agent:     Lial>llity  of  Agent;     Liability  of   Prlnripal. 
DRT'.N'KE.N.NESS,  sec  Tcrniinntion  of  .Xgency. 
DUTY,  see  Liability. 

EARMARKS,  .see  Money. 

ELECTION,    see   Liability   of   Undl.sclosed    I'rinripjil. 

EMPLOYMENT, 

Of  agent,  see  Creation   of   Agency;    Compensation  of  Agent. 

ENTIRE  CONTR.VCT.   see  Ratiflcation;    Compensation  of  Agent. 

EQUITY. 

Actions  In,  see  Actions. 

ESTOPPICIy,  see  Creation  of  Agency;   Authority,  Apparent. 

Disflnuuishod   from   ratification,    StelTens  76;    Judd   133;    St.   I^ouls   l.''i7; 
note  160. 

GODD.I'K.&  A. — 55 


86C  INDEX 

[Th«  flerures  refer  to  pages] 

KSTOrri:i,— (\«nfimnHl. 

Genorul  nilo  as  to  njuMioy  by.  Juliiiston  ."124;    Schmidt  822. 
Klomonts  sivltiK  vise  to.  Johnston  :V2^^. 
Mnst  linvo  boon  roliance  by  party  claiming,  Patterson  330. 

evipkncf; 

No  presumption  of  airenoy,  note  liSS;    Gates  313;  Sclimldt  821  and  note. 
Or  of  ratilication,  Wisconsin  Sli4. 
Necessity  of  sliowinsi.  note  2SS;   Gates  313. 
Burden  of  proof  on  one  assertini:  agency.  Pole  50;    Gregory  ■'50;    note  288, 
21)3;    Van  Eppes  3:>2:    Schniidt  820;    note  821. 
On  principal  if  sues  on  au'-Mit's  contract,  note  702. 
On  one  settini:  up  ratilication.  Brown  128;  Wisconsin  874  and  note. 
Sliiltiui;  of  burden.  Dod.iie  500. 
Agency  how  shown,  in  seneral.  Gcylin  50;   Trundy  51;   note  288. 

.Vuthority  of  airent  of  corporation,  Trundy  52. 
Admissiliilitv  of.  fact  to  be  proven,  Sharp  828. 

Atlniit  if  has  tendency  to  show  agency,  Dickinson  827;    Tebbetts  847 

South  850. 
Of  conduct  of  principal,  Webster  724;    Lawrence  825;  Dickinson  827 

see  also  Holding  Out  of  Authority. 
Of  situation  and  circumstances  of  the  parties,  Sharp  828;  note  830 

South   8.50. 
Of  ratification  of  previous  acts,  Haubelt  302. 
Of  parol  evidence.  Lyons  826. 

When  authority  is  written,  Claflin  .338;   Reese  341;   Post  451;  El- 
liot 831 ;    Mt.  Morris  832  and  note;   see  also  Authority. 
To  explain,   not  contradict.  Higgins  465;    Barbre  466;    note 

467;    Da r row  742;    Ford  791. 
To  show  value  of  services.  Glover  232;  Vilas  611. 
Of  acts  of  agent  as  proof  of  agency,  Van  Eppes  331;   Lawrence  825; 
Walsh  835  and  note. 
When  shown  principal  knew  of  acts,  Fowlds  836. 
Of  declarations,  representations,  etc.,   of  agent,  Gregory  56;    Woods 
144;   note  288;   Mussey  294;  Moores  297;  Bank  .308;   Gates  .313; 
note  .3.32;    Dowden  731;    Hill  774;    Gambill  833;    Garth  839; 
Eagle  840;   Peyton  844. 
To  show  surrounding  circumstances,  Nichols  167. 
As  part  of  res  gestie,  Mussey  294;    Hovey  652;    Hill  773;    Moyle 

841:    Peyton  844. 
As  e.xplanatorv  of  transaction,  Wales  838. 

Must  trace   to  principal,    note  332;    Gambill  833;     Fowlds  836; 
Eagle  840. 
Of  testimony  of  agent,  Haubelt  .301;  Wales  838  and  note;   Peyton 844. 
Order  of  proof,  note  8.34:    Wales  838. 
Weight  and  sutHciency  for  jury,  Dickinson  827;    Still  846;    Tebbetts  847; 
Booth  848;   South   8.50. 
Not  for  court  if  properly  submitted,  note  849. 
IJatitir-ation  is  (piestion  for  .jury,  Kelley  112. 
Silence  as  evidence  of,  St.  Louis  156. 
Total  want  of  evidence,  Trudo  100 ;    Gates  316. 

EXCHANGE, 

Power  of  agent  to,  see  Authority  to  Sell. 

LXCLrsIVE  AGENCY, 

Kev<x-aliility.  see  Termination  of  Agency. 

EXECITION  OF  AUTHORITY, 

In  name  of  principal,  Davis  23;    Combes  .38:    Wilks  4.50. 
Parol  evidence  to  explain  signature,  Post  451;   note  4.57. 

To  hold  principal,  not  excuse  agent,   Higgins  464;    Barbre  406; 
note  467. 
Execution  in  excess  of  authority,  Wilson  4.53  and  note;  note  479. 


INDEX  867 

[The  figures  refer  to  pages] 
EXECUTION  OF  AUTHORITY— Continued. 

Of  sealed  instruments.  Clarke  455:    .Merchants  4G1;   Van  Dyke  750;    note 

752 ;    see  also  Contracts  Under  Seal. 
Of  simple  contracts.  Clarke  455:    Frambach  456;   note  459;   City  460. 
In  agent's  name.  Wiley  455;    note  457:    City  45S. 
Descriptive  words  added  to  signature,  City  45S;    Tucker  47S;    note 

479:    Thilniany  661. 
Look  to  whole  instrument.  Frambach  456 ;  City  45S. 
Of  negotiable  instruments.  Merchants  462. 

Addition  of  descriptive  words.   Pratt  463  and  note;    Rawlings  470; 
Keidan  473;   Liebscher  476. 
Efifect  of  various  forms  of  signature,  Tucker  47S;    note  479. 
Parol  evidence  to  explain.  Merchants  462:   Webster  754. 
General  rule.  Keidan  472:    Liebscher  476. 

Rule  strictly  limited  to  ambiguities  upon  face  of  paper.   Rich- 
mond 468  and  note:  Rawlings  470  and  note;   Liebscher  475. 
By  joint  agents.  Loeb  480:    note  481. 

Of  a  piiblic  nature,  note  481. 
By  joint  and  several  agents,  Guthrie  482. 
By  a  partnership,  note  481. 

EXPRESS  AUTHORITY,  see  Authority;    Seal,  Authority  Under;   Creation  of 
Agency;    Blanks  in  a  Deed. 
By  parol.  Trundy  51. 
Written,  when  necessary,  Caley  22. 

When  required  by  statute  of  frauds,  Worrall,  63;  Lawrence  64. 
Sealed,  when  neces.sar>',  Worrall  60. 

FACTORS, 

Autliwity  to  sell  on  credit.  Daylight  379;   Leach  388. 

To  sell  in  own  name.  Leach  .'^89. 

To  collect.  Iliggins  :'.!)0. 
Duty  to  obey  instructions.  Harksdale  318;    HmII  519;   Grccnleaf  551. 

When  disobey  to  iimtect  .selves.  (Jreeuleaf  5.5;5;    Feild  557. 
Lien  on  goods.  Porter  720. 
Right  against  third  persons,  Tortcr  720. 
Principal  sue  on  contracts  by,  P.eebee  792;   Barry  796. 
Pursue  property  in  iiands  of,  Taylor  S(I0. 
Effe<t  of  failure  to  disdo.se  principal,  note  675. 

FEME  COVKRT,  see  .Married  Woman. 

FIDELITY,  see  Liability  of  Agent  for. 

FIDUCIARY  RELATIO.NS,  see  Liability  of  Agent  for  Fidelity. 

FORGERY, 

Ratilicatlon  of,  Henry  81;   Wll.sou83;    note  84. 

FOR.M  OF  ACTION,  see  Actions. 

FRAUDT'I.KNT  REPRESENTATIONS,  see  Liability  of  Priiiripal:   I.lMliility  of 
Agent  to  Third  Persons. 

GENERAL  AGENT. 

Defined,  (Mbson  20;   Trundy  51:    Keith  .•!26;    PiicKIc  :!  l.'!;    Sorrel  3J6;    Mc- 

A I  pin  .",4S. 
Dlstlnguislied  from  special  agents.  P.ank  .'!()7;   Farnu-rs  3.'{5 ;  note  313,  3.'>0; 

•lolinston  .323;   Keith  .32(5;   nf>te:',J5. 
As  to  authority  of.  .see  Authority  of  .\gent. 
GOVERN.MENT  CONTR.VCT.S, 

Contracts  to  procure,  Trist  43;   see  Purpo-ses  of  Agency. 

GRATUITOUS  AGENT, 

Liability  of,  Elsee  200;    note  .'60;    Morrison  .'305;    Walker  .''.67. 
Whether  presum<'d,  Krekeler  «K)5:    note  (J(HJ. 

HOLDING  OIT  (IF  .M    TIIdRITY,  sec  Authority;    Scope  of  Authority;    E.* 
tuppel;    Llalilllty  of  Priii«ii)al. 


SOS  INDEX 

TThc  figures  refer  to  pages] 

lirSRAND.  SCO  Marriod  Woniaii. 

As  ajriMit  of  wifo.  McFailaiul  124;   I'oytou  843. 

IDIOTS,  soo  riiiu-lpal:   Airont. 

ILLWiALITY.  siv  Katitii-ation.  ,  ^       . 

As  tlofonse  by  airout  a.uainst  priiicliial,  soo  Liability  of  Agont  for  Account- 
iii'j. 
IMl'l.lKP  AC.KNCY,  see  Creation  of  Agency;   Authority;   Liability  of  Princi- 
pal. 
INC11>1:NTAL  tower S,  see  Authority. 
INDEMNITY,  see  Reimbursement. 

INDORSEMENT. 

By  ageut,  see  Authority  to  Collect ;   to  Make  Negotiable  Paper. 

INFANT,  see  Croation  of  Agency. 
As  agont  of  fatbor.  Tebbetts  143. 
Capacity  as  agont.  King  31. 

As  principal,  McFarland  24;   Williams  28;  note  30. 

INJUNCTION, 

To  restrain  or  compel  performance  of  agency,  see  Termination  of  Agency, 
by  Revocation ;    by  Renunciation. 

INNOCENT  PARTY, 

One  of  two  must  suffer,  Mundorff  120;   Burch  257;  note  292;   Mussey  295; 

Johnston  .324;    Saugerties  359 ;    Covill  3G4;    McCord  7G7. 
When  justified  by  conduct  of  principal,  see  Third  Person;    Authority. 

INSANE  PERSONS,  see  Principal. 

INSANITY, 

As  revocation  of  agency,  see  Termination  of  Agency,  by  Operation  of  Law. 

INSTRUCTIONS,  see  Authority. 

INTENT,  see  Construction  of  Authority;  Agency  Distinguished  from  Sale. 

To  bind  principal  or  agent,  note  459. 

To  ratify,  St.  l^uis  157. 
INTEREST,  see  Liability  of  Agent  for  Accounting. 
IRREVOCABILITY,  see  Ratification. 

JOINT  AGENTS, 

Execution  of  authority  by,  Loeb  480;  note  481. 

Joint  and  .several  agents,  Guthrie  482. 
Appointment  of  as  revocation  of  several  authority,  note  247. 

JOINT  PRINCIPALS,  see  Clubs. 

Members  of  a  club,  Ehrmantraut  113. 

JLT)GMENT  AND  DAMAGES,  see  Damages, 

Measured  by  actual  loss,  Parke  218;    Cassaboglou  855  and  note. 

When  no  loss  shown,  Folsom  856  and  note. 
For  wrongful  revocation  of  agency,  see  Termination  of  Agency. 
Recoverable  in  .suit  by  agent,  Leterman  705  and  cases  following. 

JURY,  PROVINCE  OF,  .see  Trial. 

knowlf:x>ge. 

Of  facts  essential  to  ratification,  see  Ratification. 
Of  custom  essential  to  bind  principal,  Burcburd  287;  see  also  U.sage. 
Of  agent  when  imputed  to  principal,  see  Notice;   Liability  of  Principal  for 
Notice. 

LAND,  see  Authority  to  Sell  Real  Estate. 

I^VW, 

Agency  by  operation  of,  see  Creation  of  Agency. 


INDEX  8G9 

[The  figures  refer  to  pages] 

LEASE,  see  Authority  of  Agent  to. 

Distinguished  from  agency,  note  11. 

LEGISLATION, 

Contracts  to  procure,  Lyon  41;  note  42;   Trist  43;  note  46. 

LIABILITY  OF  AGENT  TO  PRINCIPAL. 

For  fidelity  and  loyalty,  in  general.  Lum  .")07 :    Hahl  CIS. 

Personal  interest  of  agent,  see  Comjiensation  of  Agent ;    Lum  507  and 
note:    Jansen  509;    Thompson   513;    Andrews    517;    TurubuII  521; 
Dowden  730. 
Double  agency,  Thonip.son  513;  note  515;    Everhart  515;    see  also 
Double  Agency. 
When  justified.  Gaty  514;   Rupp  519  and  note. 
Custom  cannot  justify.  Turnbull  521;   note  .")23. 
Profit  of  agent,  Turnbull  521;    McKinley  524;    note  534;    Gower 
535;   Van  Dusen  538;   Kellogg  574. 
Dealings  with  principal,  Conkey  520;    Rich  528;    Shannon  529;    note 
5.30;   Forlaw  531 ;   Gower  535. 
Rule  extends  to  whom,  Forlaw  5.33;  note  534. 
Must  fully  disclose  facts.  Van  Dusen  .537;   note  543. 
When  facts  fully  disclosed,  Burke  540;    Denuison,  542. 
After  termination  of  agency,  Dennison  542;  Bartholomew  544  and 

note. 
When  no  confidence  reposed  in  agent,  Spalding  545. 
For  obedience,  in  general,  Wilson  540;    Hall  548:   Adams  5r.4. 
In  cases  of  extreme  necessity,  Wilson  540;    Greenleaf  550. 
To  protect  advances  of  agent,  Feild  .557. 
Instructions  ambiguous,  Falsken  555. 
Usage  and  custom,  Ilall  540:    Greenleaf  551. 
Ratification  by  principal.  Bray  5.53:   Falsken  .550. 
Form  of  remedy  for  disol)edience,  Minneapolis  .5.59. 
For  negligence,  general  rule,  Lake  502;    Adams  .504;    Walker  507;   Cassa- 
boglou  855. 
Measure  of  damages,  Walker  568;    Cassaboglou  855;    Folsoni  850. 
Does  not  insure  against  mistake,  Richard.son  501;  r>ake  .502  and  note. 
Exercise  ordinary  care,  Morrison  .500. 

When  service  gratuitous,  IClsee  2tK);   Morrison  505;   Walker  .507. 
When  agent  abandons  undertaking.  Kl see  202;    note2(;J:    Cannon  200. 
Misfeasance   and   nonfeasance,   EKsee  202;    see   also   Liability   In 
Tort. 
For  accounting,  duty  in  geni«ral,  Dodge  .509  and  note. 
Account  should  lie  itemized.  Moyses  572. 

J'or  full  amount  received,  Kellogg  .573   and  note. 
Accounting  by  stibagent.  'lYipler  575. 
EfTect  of  account  staled,  Tharp  .577  and  note. 
Title  as  between  prln<l|ijil  and  agent,  Salem  57S. 

Agent  dispute  principal's  title,  Dixon  .579;    Witmaii  5s(). 
Illegality  as  defense.  Tenant  581;    Halduln  .5si  ;    note  .'.s2;    Bern- 
ard 5s;{;    tiote  5S|. 
.7ns  tertii,  Hancock  .5S5;    Moss  .585;    note  5.S0. 
Commingling  fniids  or  pro|"'rty,  Illinois  5s7;    note  088;   MaHS.  C80. 
LiaMlitv  for  interest,  .Miller  .5i»tl;    Bedell  5'.><.». 
Priiicipiil    follow  funds.   Wlilte<(imii   .5111 ;     Veil   .592;    Taylor  799; 

I'earce  S,H  ;    see  also  Trust  i"und. 
Money  deposlt«'d  in  agent's  name,  see  Bank;   Cartwell  .'O.'J. 
Renilllance  of  money,  Warwicke  .591:    Cartwell  .59.' { ;    Bedell  .59S. 
Form  of  liability.  Salem  .578;   .Moore  .591:    P.artels  .597;   King  810;   VII- 

wig  810;   note  817. 
Necessltv  of  demand.  I'.artels  ."JtO;    Bedell  .59s  nnrl  note. 
Of  notice  by  agent.  .Modern  000;   Clark  OW. 


S7U  I.NDICX 

[The  figures  refer  to  pages] 

I.TAP^ILITY  OF  AdKXT  TO  TIIIKn  ri'.KSON,  see  Execution  of  Authority; 
nt'K'i::iti(>ii  of  Autlioritx . 
WluMi  Muds  both  solf  iiiul  inliK'iiuil.  Morchiints  402;    Iliggins  4G4. 
tJouornl   rule,   Fraiubiuli  450;    note  4r)7;    Anderson  650;    note  G51;   Hiir- 

to|»  (((U). 
Crotlit   to  iiccnt  »'\ihisivol\ .  Aiulcixon  ImO;    Ilovoy  (;.■"(•_*;    Hyde  729;  Meek- 

»'!•   Till. 
l'ii;iutliorizod  contracts  of  ajicnt.  Bortror  186;    Lingenfelder  189;    Smout 
(;r.4:    Thilinany  «)(>2. 
Basis  of  lialiility.  Dusenbury  G()5;   Hall  G56;  note  657;   Thllmany  6G2; 
note  W\. 
On  what  contract.  Ilanpt  057;    Hancock  059;   note  GOO. 
FrauduUMit  rciircscntations  of  aucnt.  Smout  054. 
Nonexistent   principal.   Eichbauni  005;    Coddinn  008;    Hartop  609. 
lUirden  of  sliowinfr,  note  009;    see  also  Clubs. 
Contracts  after  death  of  principal,  Hinout  054. 
Principal  undi.sclose<l.  general  rule,  Murphy  071;    Cochran  672;    Winsor 
07^:    Nichols  074;    Holt  074;   note  077;  Darrow  742. 
Who  may  1  e  bound,  note  071. 
Agent  ho\A-  relieve  self.  Cochran  672. 
Rule  as  to  auctioneer.  Mercer  07G. 
For  money  paid  liy  mistake,  etc.,  Gary  678;   Shepard  678;   note  679. 
When  agent  has  notice  of  mistake,  Shepard  678;   Burrough  684. 
Has  not  changed  position,  Buller  081;   note  682;  Mowatt  683. 
Has  ji.-iid  over  Itefore  notice.  Owen  OSS. 
When  right  to  money  is  in  dispute,  Sadler  685  and  note. 
For  money  obtained  fraudulently,  Moore  080;    note  687. 
For  money  paid  Ijy  i)rincipal  for  third  person,  Williams  689;  note  691. 
In  tort,  for  fraud.  Bulkeley  092:   Garrett  092  and  note. 
For  conversion,  I'erkins  09.S  and  note. 
For  trespass,  Heugh  094  and  note. 

For  nonfeasance.  Cochran  072;   Denny  094:  Feltus  695. 
Nonfeasance  distinguished  from  misfeasance,  Cochran  672;   Greenberg 
095;    note  090;    Baird  098;    note  099. 

LIABILITY  OF  PRINCIPAL  TO  AGENT,  see  Compensation;  Reimbursement. 

LIABILITY  OF  PRINCIPAL  TO  THIRD  PERSONS, 

Of  principal  for  acts  of  agent.  Kingan  8;   Raney  47;  Thomp.son  106;  Gun- 
ter.  285:    Van  Ei)pes  ?>P,2. 
General  rule  stated,  Haubelt  .301;   Farmers  334;  Denman  395. 
Scope  of  authority.  Trundy  51;    Brown  127:    Ilaney  146;    Farmers  334; 
Payne  3S2;   Wilson  452;   see  also  Authority. 
Acts  known  to  be  unauthorized,  Whitley  101. 

Acts  for  i)er.sonal  benefit  of  agent,  McAlpin  .348 ;    see  Double  Agency. 
On  contracts  made  by  agent,  Weltster  724;    Brenner  725;   note  726. 
In  agents  name.  Brenner  725;    Davis  726. 

Cutside  scope  of  authority,  Marvin  720;    Ft.  Worth  728  and  note. 
On  sole  credit  of  agent.  Hyde  729  and  note;    Meeker  740. 
Not  for  benefit  of  principal,  Dowden  730;   note  731. 

When  agent  acted  for  both  parties,  Empire  732;    note  733;   Trus- 
low.  730. 
Rightfully,  Wassell  734;   note  735. 
When  principal  is  undisclosed,  see  Execution  of  Authority. 

In  general.   Paterson  739;    note  738;    Meeker  740;    Darrow 

741;    Thomp.son  743;    Van  Dyke  749. 
When  principal  has  settled  with  agent,  Ileald  747;   note  748; 

Darrow  742  ;   Thompson  743. 
Contracts  under  seal,  Van  Dyke  7.50;    note  752. 
Negotiable  instruments,  Webster  753;    note  7.54. 
Election  to  hold  principal  or  agent,  Greenburg  755;    Tuthill 
750;    note  757;    Lindquist  758;    note  759.  ■ 


INDEX  871 

[The  figures  refer  to  pages] 

LIABILITY  OF  rRIXCIPAL  TO  THIRD  PERSONS— Continued. 

In  tort,  general  rule,  Kincan  S:   Hern  TOO:  Birkett  701  and  note;   Mackay 
768:   note  7G5;   McCord  76ti  and  note;    Stiokney  770. 
Not  in  course  of  eniploynient,  Middletou  70S;   Stickney  770;   note  771. 
For  frauds.  Cooley  172;   Hoyer  775. 

By  ratification.  Denipsey  19S. 
For  conversion  by  ratification,  Lewis  IIG. 
For  declarations,  reiiresentations.  etc..  of  airent.  Keith  32S;  Standard  772: 
11111773:   note  774 ;    Hoyer  775;  sec  also  Evidence. 
False  reiiresentations.  Hoyer  775  and  note. 
Admissions.  Gunter  285. 
For  notice  to  agent.  Merry  776;   note  779;   see  also  Notice. 
As  to  subject-matter  of  agency.  Field  777. 
As  to  other  matters,  note  771):   Clement  770. 
Of  immaterial  matters.  Day  780:    note  7S1. 
Time  of  rwciving.  Worsley  781;    Mountford  782;    Distilled  783;   note 

785:    Fairlicld  78G. 
Exceptions  to  rule.  Pursley  788;   note  789. 

LIABILITY  OF  THIRD  PERSON  TO  AGENT. 

In  general  not  liable  in  contract,  Guun  701;   Thatcher  701. 
Contract  in  agenfs  name,  Sargent  702;    Leterman  705;   Fisher  707;    note 
70S;    Holden  718. 

Under  seal.  Schaefer  712;    Neff  715:   Van  Dyke  750. 

After  termination  of  agency,  Miller  704. 

Defenses  to  action  by  agent.  Leterman  70(!:    Morris  710;    Holden  718. 

For  unknown  principal.  Short  709:   Morris  710. 

Agent  recover  back  money,  Stevenson  710;    Kent  711. 
In  tort,  see  Actions. 

In  general.  Faulkner  719  and  cases  following. 

For  procuring  discharge  of  agent.  Moran  721;    note  722. 

LIABILITY  OF  THIRD  PERSON  TO  PRINCIPAL. 

On  contract  made  by  aL'ciit.  Ford  791:    Beebec  792  and  imte. 
In  agenfs  name.  Humiilirey  79."!. 

Under  seal.  Sch.-iefer  712;    NelT  715. 
Undisclosed  principal,  WoodrniT  794:    Barry  790. 

Right  of  third  person  to  elect  with  wliom  to  deal.  \Vinchestcr  791: 

note  795. 
Defenses  open  to  third  i»erson,  WoodrulT  794;  Barry  79(5:  note  797. 
RiL'iit   of   third   person   to   settle   wltii   agent.    Copeland   79S: 
Pitts  79.S. 
For  funds  or  projicrly  of  principal,  'i'aylor  799:  note  803;  see  Trust  Fund. 
Money  C'ljirmarks")  Lime  SO.'!;   Taylor  NOO;    note  .S04. 
Indicia  of  authority,  Dean  804;    note  800. 
In  tort.  IMttison  SOO. 

For  <-oiluslon  with  agent,  note  S07. 

For  c<inversion  of  princiimrs  pro|M'rty.  Gilmore  S(i7;   note  SOS. 

For  enticing  or  Interfering  with  agent,  .lones  S09;   note  SIO. 

LIEN  OF  A<;ENT,  see  Factors. 
Delinecl.  Bycrs.  047. 

Riglit  in  general.   P.yers  017:     riidcrwuod  (;i9. 
How   terminated,    I'.yers   0,47;     note  »;4S. 

LIMITATIONS,  see  Authority. 

LOAN,   see   Authority   to   Borrow;    to   Buy. 

Ralllbation  of.   Nye    107;    note   171. 
LOBBYING   CONTRACTS.    Trlst   4.'!. 

LODGE. 

Liability  of  memberH  of,  see  ClubH. 

LOYALTY,  nee  Liability  of  Agent  to  rrlnclpal. 

LUNATIC,  see  Prindpul;    Agent 


872  INDKX 

[Tlio  flguros  refer  to  pages] 
MAl.KKASANCK,  see  Liability  of  A«ont  to  Tiiird  rerson,  in  Tort. 
-MANACii:  lU'SiNKSS.  see  Authority  of  Agent  to  Buy;    to  Manage  Business. 
.MAKK1A(;K. 

As   tt'rinination   of   rolation,   Davis  23. 

HroUiM-ago,   Trist  44. 

-MAKIUKI)   WOMAN.    Soo   Husl.and. 

(."apai'ity  as  principal,  McFarland  24. 

Wife  as  agent  of  husband,  Worrali  02;     Steffans   7G;    Wade  145. 

MASTKH. 

Liability    for  servant's  acts,   Kingan  S;     note  9;     Dempsey   198. 
For  servant's  contracts,  Saugerties  359. 

.MASTER  AND  SERVANT. 

Distinguished   from  principal   and  agent,  see  Agency. 
Historical  survey,  note  9;    Dempsey  198. 

Mi:riL\NICAL  ACTS,  see  Delegation  of  Authority. 

-MIDDLEMAN,  see  Broker. 

MINISTERIAL  ACTS,  see  Delegation  of  Authority. 

MISFEASANCE,   see  Liability  of  Agent  to   rrincipal;     to  Third  Person  in 
Tort. 

MONEY, 

Has  no  earmarks,  note  171;    Taylor  SOO;    Lime  803;    note  804. 
Received  by   collecting  agent,  see  Authority  to   Collect. 
Of  selling  agent  to  receive,  see  Authority  to  Sell. 
Of  agent  to  recover  back,  see  Liability  of  Third  Person  to  Agent. 
Right  of  principal  to  follow,  see  Liability  of  Agent  for  Accounting;    Lia- 
bility of  Third  Person  to  Princii)al  for  Funds ;    Trust  Fund. 
Right  of  third  person  to,  see  Liability  of  Agent  to  Third  Person. 

MORTGACiE,  see  Loan  ;   Blanks  in  a  Deed ;   Authority  to  Collect ;   to  Borrow. 
MUNICIPAL  CORPORATION, 

ratification  by,  note  79,  99;    Zottman  129. 

MUTUALITY,  see  Ratification,  Effect  of,  as  to  Third  Person;    Termination 
of  Agency. 

NEGOTIABLE   INSTRUMENTS,   see   Authority  to   Make;     Construction  of 
Authority;    Execution  of  Authority. 
Parol  evidence  to  explain,  see  Evidence;    Execution  of  Authority. 

NON  COMPOS  MENTIS,  see  Principal;    Agent. 

NONFEASANCE,   see  Liability  of  Agent  to  Third  Person  in  Tort;    Gratu- 
itous Agent. 

NOTICE,  see  Liability  of  Principal   for  Notice;    Corporations. 

Duty  of  agent  to  give.   Modern  599;    Clark  GOO;    Distilled  784;    Fair- 
field 7^7. 
Presumption  he  has  done  so,  Modern  600. 
As  affecting  statute  of  limitations,  Teasley  602. 
Of  termination  of  relation,  see  Termination  of  Agency. 

PARENT, 

Child  as   agent  of,   see  Infant. 

PAItOL  AUTHORITY,  see  Authority;    Express  Authority. 
PAI{(JL  EVIDENCE,  see  Evidence. 
PARTNER,  see  Clubs. 

As  agent  for  partnership,  Worrali  60;   Lawrence  63. 

Agent  of  partnership  not  agent  of  partners,   Marvin  726. 
Must  l»e  acceittabie  to  all  partners,  note  23S. 

Authority  to  .sell  jiartnership  property,  Dean  805. 


INDEX  873 

[The  figures  refer  to  pages] 

PARTNER— Continued, 

Execution  of  authority  by,  note  4S1. 

Ratification  of  act  of  copartner.  Bless  136. 

Death  of  as  terminating  authority  of  partnership  agent,   note  2S4. 

PAYMENT, 

For  .services  of  agent,  see  Compensation  of  Agent. 

To  agent  for  principal,   see  Authority  to  Collect;    to  Sell;    Liability  of 

Third  Person  to  Principal. 
To  agent  for  third  person,  see  Liability  of  Agent  to  Third  Person. 

PERSONAL  INTLI'ENCE,  see  Purposes  of  Agency. 

PERSONAL   LIABILITY, 

Of  agent,   see   Liability   of  Agent  to  Third   Person;    Warranty  of   Au- 
thority. 

PERSONAL  TRUSTS,  see  Delegation  of  Authority. 

PHYSICIAN, 

Authority  of  agent  to  employ,  note  145;    Mobile  159. 

POSSESSION, 

Authority  implied  from,  see  Authority  to  Sell. 

POST  OFFICE, 

To  procure  location  of,  note  42. 
POWER  COUPLED  WITH  AN  INTEREST,  see  Termination  of  Agency,  by 
Revocation ;    by  Death. 

POWER  OF  ATTORNEY,  see  Written  Authority;   Express  Authority. 
When  necessary.  Caley   22. 

Construction  of.   see  Construction  of  Authority. 
Recording.  Calcy  22. 

Of  insane  person  or  infant.  Williams  27. 
Is  a  written  document,  Mt.  Morris  S.32. 

PRINCIPAL,   see  Clubs  and   I'ninconiorated   Societies;    Liability  of  Princi- 
pal;   of  Agent;    of  Third  Person. 
Who  may  act  as.  Cal<'y  22  and  cases  following. 
Persons  non  compos  nientls.  Davis  2.3,  282;    McFarland  24. 
Married  women  as.  McFarland  24. 
Infants  as,  .McFarland  L'4  ;    Williams  2S;    note  ."'.O. 
Lunatics  and  persons  non  sui  juris,  McFarland  21. 
Insane   persons   as,    Williams   27. 

PRIVATE   INSTRUCTIONS,  soo  .\uthority. 

PROFESSIONAL  SERVICES,  see  Purpo.ses  of  Ag.iicy. 

PROFITS, 

Earned  by  agent,  see  Liaiiility  of  Agent  for  Fidelity. 

PROMOTERS,  see  Corporations. 

PUBLIC  ACJENTS, 

E.xccution   of  authority  by,  note    l^i. 
Ratilication  of  a'ts  of,  note  7'.>,  '.t'.t. 
Delegation   of  authority  by.   note    I"-".. 
Personal  advantage?  in  rontracts  Ity,  note  507. 

PUBLIC  OFFICERS, 

Contracts  for  influencing,  see  IMiriujws  of  Agency. 

Ratification  l)y.  note  71),  09. 

PUBLIC   rf)LI(;Y,   see  Pun'oses  of  Agency. 

PURCHASE,  see  Authority  of  Agent  to  Buy. 

Pl'RPOSES   OF   ACJENCY. 

(Jeneral  rule.  Kingan  7:  Sllverwood  :;.".;  Conil)os  .10. 
Unlawful  puri'oses.  Lynn  40;  Trist  V.i:  <:nmblll  s.'U. 
What  cannot  bo  done  l»y  ngent.  Conil  es  .'{(!. 


874  INDICX 

(The  figures  refer  to  pages] 

rntrOSES  of  ACKNCY— routimied, 
Immoral  puriuisos.  Lyon  35\ 

I'ontniiy  to  public  policy.  Lyon  40;    Trist  4-4;    Memphis  80. 
Eiuployuiout  of  personal  intlueuce,  Lyon  42;    Trist  44. 

QrANTUM  MKUriT,  see  Actions.  Form  of. 

(^>l'I  FAtMT  I'KK  Al.lT'^I.  etc.. 

Imputation   of   tlie   maxim,    t^tcinaman  4;     Kingan   G;     Silverwood,   33; 
Stevenson  710. 

RATIFICATION. 

r>etincd.  Fii-st  74 ;    Alexander  70 ;    Town  176. 
Distinguished  from  adoption,   Schreyer  70. 

From  estoppel,   yteflens  7-1;    note  70;    Thompson  108;    Judd  133;  St. 
Louis  l.")7;    note  100. 
Of  previous  acts  as  evidence  of  agency,  Haubelt  302. 

As  creating  implied  authority,  Trundy  52. 
What  may  be  ratified,  in  general.  Alexander  79. 

Void  and  voidable  acts,  McFarland  24 ;    Memphis  80 ;    Henry  81. 

Forgery,  see  Forgery. 
Who  may  r.itify.  Alexander  70  and  note;   First  Nat.  Bank  97. 
A   corimration.    Kelsey   OS;    note  99. 
An  agent,   Trudo  100;    note  101. 
Essentials  of. 

Assumption  of  agency,  Ellison  73;    First  Nat.  Bank  74;    Wilson  85; 

Wyckoff  86. 
Existence  of  principal,  Alexander  79;  Empress  90;   Battelle  92. 
Act  done  for  principal  ratifying.  Watson  94. 

Knowledge  of  facts.  Valley  Hank  102;  note  103;    Moyle  104;   Thomp- 
son 107:    note  110:    Whitley  161. 
Need  not  know  legal  effect  of  the  facts,  note  103;    Kelley  110. 
May  assume  risk  without  inquiry,  Kelley  111;    Ehrmautraut  114 

and    note;    Lewis  116. 
Accei)tance  of  benefits  not  necessary,  Thompson  107;   Grant  125. 
New   consideration  not   necessary,   First  Nat.    Bank   97:    Grant 
125;    Ehrmantraut  114;    Lewis   116;     Thacher   117;     Tebbetts 
143. 
Ratify  all  or  none,  Rudasill  119;    Mundorff  120;    National  Co. 
122;    note  124;    note  149;    La  Grande  165;    Nye  169. 
How  when  principal  cannot  be  placed  in  statu  quo,  National 
Co.  123;    Cooley,  171. 
Intent  to  ratify.  Brown  128. 
Relations  of  parties  as  showing,  Ralphs  137. 
Manner  of,  in  general,  Zottman  130;    Judd  133;    Haney  146;    St.  Louis 
157. 
When  must  be  in  wi-iting,  Ehrmantraut  114;    Judd  133. 

Under  seal,  Heath  i:J4:    Bless  1.35;    note  136. 
Statutory  reiinirements.  note  133. 
Imi.ii.'d.   Italphs  1.^57:    Hartlove   140;    Sanders   141. 

When   not.   Danaher   142;    Tebbetts  143  and  note;    Woods  144; 
Wade    145    and    note. 
By  acceitting  benetits,  National  122;    Brown  128;    Bless  136;    Haney 
147;   note  149:   Coykendall  151;   La  Grande  165. 
When  not  a  ratification,  Williams  1.54. 

May    ratify    without  receiving    benefits,    Thompson   107;     Grant 
126. 
By  acquiescence,  Lawrence  64;    Kelsey  98;    Thompson  107;    Ralphs 
137:    Hartlove  140. 
Act  of  stranger   or  of  agent,   Ralphs  137;    note  163;    Ketchem 

164. 
Not  compelled  to   ratify,   Valley   102;    Brown  127;    Coykendall 
151. 


INDEX  875 

[The  figures  refer  to  pages] 

RATIFICATION— Contimie<l. 

When    rejiudiation    necessary.    ^lobile    IGO:     ^Y^litle.v    IGl    and 

note;    Ketchem  1G3  and  note:    Trisus  irtl;    see  also  Estoppel. 

By  silence,  St.  Louis  luU;    note  15S ;    Mobile  159;    note  100;    Wliillev 

1(M. 
By  bringing  suit  or  enforcing  contract,  Kingan  7;    La  (Jrande  105: 
Nichols  167  :    Perry  184. 
Limitations,   Nye  IGU;    Cooley  171;    note  171. 
Proof  of,  Wisconsin  824  and  note;   see  also  Evidence. 

For  court  or  jury.  Kelley  11"J :    note  s.".:; :    see  also  Trial. 
Effect  of,  in  general.   Steffens  78:    Alexander  79:    Memphis  80;    Wijsou 
85:   National  Co.  1J4:    Grant  125;    Zottmau  130;    liless  i:{5;    Haney 
146;    Whitley  161;    Soames  173;    Maclean  174;    Town  176:    Shuen- 
feldtl7N;    Perry  184 ;   Berger  186;    Schanzl93;    Deuipsy  200;  Far- 
mers 202. 
Of  parol  ratification,  Worrall  61;    Lawrence  65. 
Cannot  be  revoked,  Memphis  81;   Sanders  141;  Ilauey  146;  Perry  1S4; 

Coffin  1.S5. 
Of  TLtifyiug  severable  part.  Moyle  105;    note  124;    Nye  169. 
Effect    of   rei)udiation.    Brown     128;     llaney   146. 

Of  failure  to  repudiate,  see  Ratification  by  Acquieseeuce. 
Limitations  on  retroactive  effect  of.  Shuenfeldt  179. 

When   rights  of  third   persons  intervene.   (Jraham   181. 
As  to  the  agent,  Berger  187:    Lingenfelder  189;    Shepherd  194- 
Conipensation    to   the   agent.  (Joss    197. 
Effect  of  inaction   of   i)rincipal.   Triggs  191. 

Of  effort  to  protect  himself,  Triggs  191;    Schanz  193. 
When  the  agent  is  a  tort-feasor,  note  195. 
As  to  the  principal,  see  Effect  in  General,  also  Wilson  85;   Overby  195; 
(ioss  197. 
For  the  agent's  tort.  Demp.sy  198. 
As  to  third  person.  Farmers  202:    note  206. 

Intervening   rights  of.   Farmers  205 ;    Graham  181. 

REAL  ESTATE  AGENT,  see  Broker;    Authority  to  Sell   Real  Estate:    Com- 
pensation. 
REIMBURSEMENT   AND    INDE.MNITY   OF    AGENT,   .see  Compensation    of 
Agent,   When   Disch.Trged:     'rermin.ition   of  Agency:     I^leii   of   .\gent. 
Right  in  general.  Adiimson  fhis;    note  6;',9:    Bacon  640:    Powell  612;    note 
643:     Clifton  t;44  and    note;    Burl»y   645:    note  646. 
As  affected  by  care  and  skill  of  agent,  note  564. 

RENT,  see  Authority  of  Agent  (o  Lease. 

RENUNCLVTION,  see  Termination  of  Agency. 

REPRESENTATIONS,  see  Liability  of  Principal;  Liability  of  Ag.-nt  to  Third 
Persons;    Evidence. 

REPUDIATION. 

Of   unauthorized   act,   see   R.-itltlcatlon. 
As  evidence  of  agency,   note  s.''.7. 

REPTTATION, 

As  evlilmce  of  agency,  (Jalcs  .'{13. 

RESCISSION  OF  CONTRACT. 

Authority  of  agent  us  to,  Kee  Authority  to  Roll. 
RES   GEST.i:,    see   also   Evideiico. 

Acts  an<l   <|e(  l.-iratlnns  of  agent  ns.  Mussey   291:    note  771. 

Declarations  and  admls-slou  of  agent  as,  Ilill  773;    Lawrence  8'26;  Moylo 
H41;    Peyton  844. 

RETROACTIVE  EFFECT. 

Of  ratlli<atlon,  see  Ratlllcatlon. 


876  iNOKX 

[The  flgiires  refer  to  pages] 

TJRVIHWTIONT, 

Of  jiijiMiiy.  see  Ternilnntion  of  the  Kolation. 
C>f  ratitioation.  see  Ratificatiou. 

SAI.K. 

l>istlii,u:uisluHl  from  asenoy.   Kchols  2;    Taylor  13;    Snollinp:  If!. 
Authority  to  make,  see  Authority  to  Sell;    to  Collect;    Liability  of  Prin- 

lipal  to  Third  I'erson. 
CouipeusatioH  for,  see  Compensation  of  Ajrent. 

To  aseut.  when  binds  principal,  see  Liability  of  Principal  to  Third  Per- 
son. 

SCOPE  OF  AUTHORITY,  see  Liability  of  Principal;   Authority;    Trial,  Prov- 
ince of  Ciuirt  and  Jury. 
Burden  of  proof  in  showing,  Pole  50;    note  821. 
How  proved.  Sharp  820. 

SEAL,  AUTIIORITY  UNDER,  see  Authority:   Execution  of  Authority;    Lia- 
bility of  Principal  to  Third  Persons;    Liability  of  Agent  to  Third  Per- 
sons:    Contracts    Under    Seal. 
When   necessary,   Worrall  60. 
Effect  of  act  of  agent  when  seal  wanting,  Worrall  61. 

Conveyance  as   equitable   contract   to   convey,   Lawrence   65;     Mor- 
row 70. 
Effect  when  seal  is  not  necessary,  Worrall  62;    Lawrence  65;   Bless  136. 
Distinction  between   sealed  and  un.sealed,  Cribben  67. 
Statutes  abolishing  requirements,  Swartz  69;    note  70;    Post  451. 
Signature  by  agent  in  principal's  presence,  Lewis  71. 

SECRET  INSTRUCTIONS,  see  Authority. 

SELL,  see  Sale. 

SERVANT. 

Distinguished  from   agent,  see  Agency. 

Liability  of  in  tort,  Perkins  693;   also  Liability  of  Agent  In  Tort. 
SET-OFF, 

By  agent  in  accounting  with  principal,  Peterson  571;   Illinois  587;    note 
591;    Standard  771. 

By  third  person  in  action  by  agent.  Leterman  706 ;    Morris  716. 
In  action  by  principal,  Barry  790;    note  797;    Lime  804. 
SEVERAL  AGENTS, 

Principal  may  have.  Van  Eppes  331. 

SIGNATT'RE,   see    Ratification;     Forgery;     Execution   of   Authority;    Deed; 
Seal,  Authority  Under. 

SILENCE, 

As   ratification,   see  Ratification. 

SIMPLE  CONTRACTS,  see  Execution  of  Authority;   Construction  of  Author- 
ity;   Liability  of   Principal  and  Agent  to  Third  Persons. 
SOCIETY,  see   Clubs. 
SON,  see  Infant. 
SPECIAL  AGENT, 

Defined,    Gibson  20;    Trundy  51;    Pacific  343;    Sorrel  346. 

Distinguished   from  general  agents.  Bank  307;    Farmers  335;    note  343; 
Johnston  ;!2:5;    Keith  .326;    note  345,  350. 

As  to  authority  of,  see  Authority  of  Agent;   Ratification. 

Scope  of  authority  of,  Hoyer  776;   see  Scope  of  Authority. 

SPECIAL  INSTRUCTIONS,  see  Private  Instructions. 

SPECIFIC   PERFORMANCE, 

Of  agfncy  not  granted,  see  Termination  of  Authority  by  Revocation;    by 
Renunciation. 


INDEX  877 

[The  figures  refer  to  pages] 

STATE, 

Ratification  by,  note  99. 
STATUTE   OF  FRAUDS,  see  Written  Authority. 
STATUTE  OF   LIMITATIONS. 

When  begins  to  run.  Teasley  602;   note  G04. 

In  favor  of  agent,  Tharj)  576. 

SUBAGENT,  see  Delegation   of  Authority;    Ratification. 

SUE.  see  Actions.  Parties  to. 

Efifect  of  suit  to  ratify  contract,  see  Ratification. 

SUI  JURIS,  see  Principal. 

TENDER  OF  SERVICES,  see  Compensation. 

TERMINATION  OF  AGENCY, 

By  accomplishuicnt  of  purpose,  Moore  207. 
Bv  efflux  of  time.  Marhury  209 ;    note  210. 

By  revocation  by  principal,  in  general.  :Marbury  209;  Burke  210;  Brook- 
shire  212;     Gilbert  251;    Attrill  (i:{2. 
Power  to  revoke  in  general.   Marbury  209;    MacGrogor  214;    Parke 
217;    Terwilliger  221 :    Glover  2.'](>:    Stier  2:J4:    Blumentbai  240. 
"Irrevocable"    or    "exclusive"    agency.    MacGregor    213;     Black- 
stone  215;    Montague  219. 
Agency  partly  executed,  Terwilliger  221. 
Agency   at  will,    Parke   217;    Sheahan  227;    Hoover  22.S;    Stier 

234. 
Agencv   for  definite  term,  (ilover  2.30. 

Mutuality  of  undertaking.  Glover  230;    Stier  2.3.1. 
Specific    enforcement.    Mair    2:'>s. 
Injunction  against  principal,  Harlow  271. 
Power    given    for    consideration    or    as    security.    Marbury    209; 
Brookshire  212;    MacGregor  21.3;    Walsh  210;     Parke  217  an.l 
note;     Terwilliger   223 
Power  coui)led  with  an  interest. 

What   is,    Marburv    209;     Parke   217:     Montague   218;    Ter- 
williger   222;     Taylor    225;     Hartley    226;     Stier   234; 
(Jilbert  252;    Hunt  275. 
Efi'ect   of.    Marbury  2(Kt;     MacGregor   213;    Blackstone   215; 
Montague  2i9;    Terwilliger   221;     Hunt  275. 
On    revocablllty,    Davis  2.3. 
Upon  death   of  principal.   Hunt  275. 
Insanity    of  principal.   Davts  2s.3. 
Power  vs.  right  to   revoki-.  Sheahan  227;    Glover  2,30;    Blunien- 
thai   240;    note  241. 
Liability  of  prlncli.iil,    I'.urke  211:    Parke  218;    Glover  J.>(); 

.Tacdlis   21(1;     I'.IUMienlbal   2  12. 
Discbarge   when  Jusllliid,  .Vtkln   2:!7;    Jacobs  240. 
Manner  of  revo.ntlon.   In  general,  ("lark  211;    Brookshire  245. 

By    appcdntnient   of  another  agent.    (3ark   244;     Brookshire  Ll.»: 

By  di.s|)osal  of  subject  niatt.r,  K.-lly  249;    GIIImtI  2.52;    Abern  271 
Notice  ol    revcteatlon. 

Necessity    to   relieve    j.rln.  Ipal    of    llMblllly.    .\non    J...!;     Ix.oiuIh 

251. 
To  whom  given.   Bunli  255. 
EJTectlve  when,  Kelly  2.59. 
Effect  of  failure  to  gl\e.   Bnrch  255;    Kelly  2..0. 

Ah  to  agent.   Kelly  20U. 
How  given.   Burch  256. 
By  nbanflonnient  by  agent. 

(iratnltous   ageii.y.    Elsee  262. 

Ageu.y   at  will,   Sciirlty  2t>3;    note  261;    (  annon  ^00. 


i>78  INDEX 

[The  figures  refer  to  pages] 

TEKMlNATmN  Hr'  AtJKNCY— C'ontiiuu'.l. 

Mutuality  of  undortakins,  Canuou  2G6. 
C>f  rouiody.  Harlow  L'71:    iioto  L'72. 
Spocllic'   iHM-fonuance  vs.    a;;(Mit.    liojicrs   207. 

Injunction   v.s.   auont.   Ko^'ors  2()S;    Harlow  272. 
In  favor  of  awut.   Harlow   270. 
By  operation  of  law.   in  j,'onoral.  (Jiibort  2r>2;    Ahern  274;    Hunt  275. 
By  death.  Davis  2:{:    Hunt  27."). 

When    death    is    unknown    to  third  party,    Davis  278;    Deweese 
27!t:    note  2S0:    Sniout  U~t4. 
By  incapacity  of  j)rincipal   in  jjjeneral,   Davis  23. 
By  insanity,   etc.,  Davis  2S2. 

Execution  void  or  voidable,   Davis   28.*?. 
By   niarria.ue  of  jirincipal,  a  single  woman,  Davis  23. 
By  liankrnptey.  Davis  23;   note  284. 
By  war.  note  2S4. 
Efifeet  of,  Gunter  2S~i  and  note:    Denman  305. 

Upon  right  of  agent  to  deal  with  the  principal,  Dennison  542;    note 
543;    Bartholomew  544  and  note. 

TESTIMONY, 

Of  agent,  see  Evidence. 

THHID  PERSON,   see  Liability   of, 

Deals  with  agent  at  peril,  note  288;    Cummins  291;    note  202;    Mussey 
205;     Moores   208;    Gates  313;    Bank   43(5;     Schmidt  822. 
When  authority  written.  Cummins  201;    Claflin  338;    note  339;    see 

also  Estoppel;    Innocent  Party;    Secret  Instructions. 
TMien  agent  has  apparent  authority,  Griggs  300;    Gillman  320;    Picli- 

ering  310. 
Agent  not  acting  for  benefit  of  principal,   Dowden  730. 

TORT,  see  Liability  of  Principal;    Liability  of  Agent. 
Ratification   of.    Lewis   116. 

Liability  of  princijml  for  frauds  of  agent,  Moores  299. 
For  torts  in  general.    Simpson  407. 

Of  agent  in  trover.  Salem  578;    Cochran  672;    see  Actions. 
For   misfeasance,   frauds,   etc.,   Cochran  072. 

TRESPASS,   See  Actions,  Form  of. 

TRIAL. 

Province  of  court  and  jury,  note  288;    South  850;    note  857. 

In  determining   ratification.  Kelley  112;    note  8,53. 
Written  authority  for  court,  Claflin  338;    Anderson  650;    note  851;    Wil- 
cox S.53. 
Usually   mixed  law  and  fact,  Dunwoody  .341;    Wilcox  852. 
If  any  evidence,  then  for  jurj',  Peerless  362;    Dickinson  827;    Still  840; 
Tebbetts  847. 
If  none,  then  for  court.  Gates  316. 
If  reasonable  minds  could   differ,  Booth  848. 
If  only  one  conclusion,   note  851. 
Extent  of  authority  for  jury.  Grand  Rapids  296. 

TROVER,  see  Actions,  Form  of. 

TRUSTEE, 

Distinguished  from  agent,  Taylor   10  and  note. 
Dealing   with   trust  property,  Everhart  516;    Rich  527. 

TRUST   FUND, 

Rit'ht   to    follow,    .see    Liability   of  Agent   for  Accounting;    Liability  of 
Third   Person  to    Principal. 

UNAUTHORIZED    ACTS   OR    CONTRACTS,   see   Liability   of    Principal    to 
Third  Person;    of  Agent  to  Third  Person;    Scope  of  Authority. 


INDEX  879 

[The  flgrures  refer  to  pages] 

DNDISCIiOSED  PRINCIPAL,,  see  Liability  of  Principal;    of  Agent;    Ratifi- 
cation. 
UNINCORPORATED   SOCIETIES,   see  Clubs. 

USAGE   AND  CUSTOM,   see  Autliority :    Written  Autliorlty;    Delegation  of 
Authority;    Ratification. 
To  compensate  the  agent,  note  (50»i;    nute  ((09. 
Extent  of  effect  on  agent's  authority.  Gates  315. 
As  affecting  written  authority.  Cawthorn  311. 
Proof  must  be  clear.  McCullough  .397. 
Knowledge  of  principal.  Bur<hard  2S7. 

Incidents  of  legality,  Farnsworth  317;    Gates  315:   note  318;  Leach  3SS. 
Usage  contrary  to  instructions.  Barksdale  31S;   Leach  3SS;    Hall  549. 
To  good   morals.  Turnbull   521;    note  523;    Hall  549. 
To  reason,  Bank  501. 
To  give  warranty,  see  Authority  to  Sell. 
As  to  mode  of  remittance  of  funds,  Cartwell  593;   Warwlcke  544. 

WAGES,  see  Compensation  of  Agent;    Terminatioti  of  Authority. 

WAR.  .  r  . 

Terminates  agency,  see  Termination  by  Operation  of  l.a\\. 

WAKRANTIES.  see  Authority   to  Sell. 

WARRANTY    OF    AUTHORITY.   Hall    <!.-»;   and   cases   following;     note   004; 

see  also  Liability   of  Agent   to  Third   Person. 

WIFE,  see  Married  Woman. 

Of  principal,  see  Creation  of  Agency;    Authority   of   Agent;     Evidence. 
Agency  at ;   see  Termination  of  Agency. 

WITNESS, 

Agent  as,  see  Evidence. 

WRITING, 

Contracts  in.  see  Ratification;    Execution. 
When  retiuired  by  statute  of  frauds,  see  Written  Authority. 
WRITTEN  AUTHORITY,  see  Power  of  Attorney;    Authority;    Construction 

of  Authority:    Trial.  ,     ,„  ,       .    hi     t    ii 

When  required  by  statute  of  frauds,  Worrall  (13;    Khrniantiaut,  114;   Judd 

i:',2.   Maclean  174;    Carsteiis  4(Ki. 

Affected   by   usage  and   custom.   Cawthorn  311. 

Parol   evidence   as  lo.   see   Evidence. 

Expanded  by  Implied.  ClafUn  .33S;    Dunwoody  3.39;    note  34(»;    .Mt.   Mor- 
ris .S32. 
WRONGFT'L  DIS<'HAR(;E. 

Of  agent,  see  Termination  of  Agency. 

YEARLY   HIRING, 

Effect  of.  Hoover   228;    \N'^llare  608. 


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